TMI Blog1998 (6) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... n of this Court : Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the capital receipt in respect of mesne profits is subject to tax, as a capital receipt ? 2. The relevant facts, as stated by the Tribunal in its order dated 4-2-1992, are that as per the lease deed dated 15-8-1960, one Achuthan Pillai, the managing partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand over vacant possession of the disputed property to the assessee-firm and pay mesne profits at the rate of 22,070 per month and interest at the rate of 6 per cent per annum from the date of filing the suit till recovery of the amount from Voltas Ltd. 3. It is such mesne profit which was brought to tax by the Assessing Officer as revenue receipt. On appeal, the order of the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 68 ITR 503 that capital gains is income derived from property. The assessee has thought fit to disclose property income for the previous year ended June 1982. It follows that capital gains will also have to be assessed for the same period, especially as the transfer of the capital asset took place during the relevant previous year, i.e., on 18-3-1981. We, therefore, find that the capital gains wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l gains , and shall be deemed to be the income of the previous year in which the transfer took place. From the facts as found by the Tribunal, we are of the view that there was no transfer of any capital asset in favour of Voltas Ltd. After the lease was executed in favour of Achuthan Pillai, he constructed the building, which was leased out to Voltas Ltd. by the former, who later assigned his rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly fortified by a decision of this Court in CIT v. Mrs. Annamma Alexander [1991] 191 ITR 551 in which a Division Bench held that the fact that mesne profits are estimated with reference to the profits which the person in wrongful possession of such property actually received or would have ordinarily received for the purpose of computation or determination of the compensation will not in any way re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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