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TMI Blog2014 (4) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... Briefly stated, the impugned addition of Rs.20,27,250/- on account of long term capital gain arising out of relinquishment of tenancy right was made by the AO on the ground that the assessee was having tenancy right in the premises which was developed by Unique Estate Develop Co. Ltd. at Chandiwali and in lieu of the relinquishment of the tenancy right, the assessee got ownership right in Flat No. 705. The AO thereby adopted the stamp value of Rs.20,63,250/- as the sale consideration and allowed the deduction of Rs.36,000/- paid to the developer as per the agreement which is the cost of the acquisition. Accordingly, the AO treated the difference of Rs.20,63,250/- as long term capital gain and brought the same to tax. According to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards the improvement of the title which cannot be subjected to tax under the head 'capital gain'. It is the case of the revenue that the assessee got the new flat for a reduced price which is far below the market value of the property only by way of relinquishment of tenancy right which is liable to be taxed under the head capital gains. 4.1 It is pertinent to mention that clause (O) of the agreement dated 11.05.2005 between the assessee and the developer states that the purchaser (assessee) is a monthly tenant of Flat No. 705 in the building paying a rent of Rs.300/- per month in terms of the agreement dated 28th November 1997 between Unique (lessor) and assessee. Para 10 of the said agreement states that the assessee shall pay to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isition of property back on ownership basis on payment of premium are contained in a single document, just by differently wording that the assessee got the reversionary right by paying small amount for improvement in the title to the ownership cannot support the contention of the assessee that he has acquired only lease hold interest as the reversionary right. Therefore, the working by the AO that Rs.20,27,250/- as the long term capital gain earned by the assessee on relinquishment of tenancy right is sustainable. 4.3 The contention on the basis of the decision of the Tribunal in the case of ITO Vs. M/s Hajra I Memon in ITA No. 3848/Mum/2010 relied by the assessee to support the proposition that the tenancy right got converted into ownersh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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