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The Commissioner of Income Tax Versus M/s. Magnum Trading Corpn.

Deduction of consideration paid for surrender of tenancy rights - genuine transaction - whether the said amount cannot be taken into account while arriving at the costs of the capital asset while computing the capital gains on sale of 2/3rd of its property? - ITAT allowed the claim - Held that:- We find that the impugned order of the Tribunal has rendered a finding of fact that the Revenue had itself accepted the transaction with regard to the recipient of the the amounts as surrender of tenancy .....

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llant Mr. Kushal Amin Patel i/b. S. K. Srivastav & Co., for the Respondent ORDER P. C. This Appeal under Section 260A of the Income Tax Act, 1961 (the Act), challenges the order dated 7th June, 2013 passed by the Income Tax Appellate Tribunal (the Tribunal. The impugned order is a common order for the Assessment Years 200405 and 200607. This Appeal relates to Assessment Year 200405. 2 The Revenue urges only the following question of law for our consideration: Whether the Tribunal was justifi .....

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Assessment Year, the Assessing Officer noticed that while computing the capital gains under Section 45(2) of the Act, the Respondent had claimed a deduction of ₹ 4.25 Crores paid to the tenant for the surrender of tenancy rights of its property. The Assessing Officer held that the payment was not genuine and, therefore, disallowed the entire payment of ₹ 4.25 Crores made to M/s. Magnum Ferromental Pvt. Ltd., while computing the cost of the property to arrive at capital gains under S .....

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for the surrender of tenancy rights in the previous year relevant to Assessment Year 199495. The Revenue sought to tax the amount in the hands of M/s. Magnum Ferromental Pvt. Ltd. This being the consideration received for surrender of tenancy rights. In fact, in the case of M/s. Magnum Ferromental Pvt. Ltd., the Assessment Order dated 18th March, 1997 passed under Section 143(3) of the Act as well as the CIT(A) had held that the amount received on account of the surrender of its tenancy right, .....

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