TMI Blog2018 (4) TMI 1415X X X X Extracts X X X X X X X X Extracts X X X X ..... al Liquidator has sold the land on “ as is where is and whatever there is basis”. The law is very clear on this issue- “no one can transfer a better title then what it has”. The purchaser would have got a lease held right over the said plot of land and to get the ownership right ₹ 3.11 crores was paid to the assessee and vide agreement dated 04.09.2009 deed of confirmation and release was executed for release of ownership rights of the land under reference. J.K. Kashyap [2008 (3) TMI 10 - HIGH COURT OF DELHI] has decided a similar issue holding that consideration received for relinquishing the rights in property attracted provisions of section 45(1) making it liable to capital gains tax. Addition for scheme for gratuity - Held that:- From a bare reading of Section 36(1)(v) of the Act, it is manifest that the real intention behind the provision is that the employer should not have any control over the funds of the irrevocable trust created exclusively for the benefit of the employees – deduction allowed since the conditions stipulated in Section 36(1)(v) of the Act were satisfied. See Textool Company Ltd case [2009 (9) TMI 66 - SUPREME COURT] - ITA. No. 1876/AHD/2014 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cquisition 13,67,715 Cost Inflation index for F.Y. 2009-10 632 Cost Inflation index for F.Y. 2009-10 100 Less: Indexed cost of acquisition 86,43,956 Less: Expenses incurred in connection with the transfer 1,48,530 Long term capital gains on property-I 2,23,07,514 5. The assessee was asked to furnish the details and on perusal of the same, the A.O. noticed that the assessee was the owner of a plot of land which was given on a long term lease of 98 years to M/s. Star Steel Limited (SSL). The A.O. further noticed that SSL who had the possession of the land, created a charge on the said plot of land as security for availing various credit facilities from banks, financial institutions, etc. SSL suffered heavy losses in its business and was referred to the BIFR. It was subsequently recommended for the winding up of SSL. The Official Liquidato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that by the lease deed dated 11.07.1972 lease of the land in question was granted to SSL. The contention of the A.O. that transfer of land for such a long period is nothing but actual transfer of the said land cannot be accepted because by giving of lease, the said plot of land, the assessee has not lost its ownership right over the said plot of land. In our considered opinion, the land which had been leased out to SSL did not seize to belong to the assessee. The ownership remained with the assessee. 12. When the Official Liquidator appointed by the Hon ble High Court of Gujarat sold the land held by SSL on lease, the assessee filed application before the Hon ble High Court for recovery of possession of land in question. The Hon ble High Court of Gujarat held that lease right are intangible asset and therefore what Official Liquidator has transferred was the lease right held by the lessee company. Moreover, the Official Liquidator has sold the land on as is where is and whatever there is basis . The law is very clear on this issue- no one can transfer a better title then what it has . The purchaser would have got a lease held right over the said plot of land and to get the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reassessment proceedings under section 148? Held Factual aspects of case In the present case, the undeniable facts are that the assessee paid ₹ 68 lakhs, at the time of entering into the MoU, i.e., the agreement for sale. The transaction was reported to the revenue; a no objection certificate was issued. No doubt, the MoU did not assign a particular defined plot of land. A supplementary deed was later entered into, and the assessee was consequently allotted a plot. [Para 12] Income from relinquishment of right in a property has to be assessed as capital gain The decision in J.K. Kashyap v. Asstt. CIT [2008] 302 ITR 255/171 Taxman 390 (Delhi) is an authority for the proposition that even when an assessee becomes entitled to an undefined and undivided share in a property, through an agreement, which he later relinquishes, the gain has to be assessed as income from capital gain, and not as income from other sources. [Para 13] The High Court agreed with the above reasoning. That apart, in the present case, the assessee had acquired right to a specific plot; furthermore, the interest was in the nature of an actionable claim, which could be asser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. (See : Shree Sajjan Mills Ltd. v. CIT [19851 156 ITR 585/23 Taxman 37 (SO. From a bare reading of Sectin 36(l)(v) of the Act, it is manifest that the real intention behind the provision is that the employer should not have any control over the funds of the irrevocable trust created exclusively for the benefit of the employees. In the instant case, it is evident from the findings recorded by the Commissioner and affirmed by the Tribunal that the assessee had absolutely no control over the fund created by the LIC for the benefit of the employees of the assessee and further all the contribution made by the assessee in the said fund ultimately came back to the Textool Employees Gratuity Fund, approved by the Commissioner with effect from the following previous year. Thus, the conditions stipulated in Section 36(l)(v) of the Act were satisfied. Having regard to the facts found by the Commissioner and affirmed by the Tribunal, no fault can be found with the opinion expressed by the High Court, warranting our interference. 9. Resultantly, the appeal is dismissed with no order as to coasts. 18. Respectfully following the afore-stated ratio laid down by the Hon ble Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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