TMI Blog2016 (5) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2(14) capital asset means property of any kind held by an assessee, whether or not connected with his business or profession. A perusal of this definition shows that the legislature has intended to define the term capital asset in the widest possible manner. This definition has been curtailed to the extent of exclusions given in section 2(14) itself which include stock-in-trade and personal effects. The impugned asset does not clearly fall in the aforesaid exclusions given in section 2(14). The bundle of rights acquired by the assessee is undoubtedly valuable in terms of money - The said tenancy rights shall form part of a capital asset in the hands of the assessee and, therefore, any gains arising there from would be assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy rights of the shops from one tenant to another should be treated as income from other sources and not as capital gains as claimed by the assessee and allowed by the ld.CIT(A) and has also agitated the action of the ld.CIT(A) in allowing deduction u/s 54EC of the Act. 4. During the course of hearing, the ld.DR vehemently relied upon the order of the Assessing Officer and, on the other hand, the Ld. Counsel of the assessee relied upon the detailed findings of the ld.CIT(A). 5. We have considered the orders of lower authorities and facts brought before us. The basic issue involved herein is about the characterization of the nature of amount of premium received by the assessee on account of transfer of tenancy rights from one tenant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed. It was inter-alia submitted by the assessee that in earlier and subsequent years also similar amount was received from other properties which was offered to tax under the head capital gains and the same was accepted by the incometax department. It was further submitted by the assessee that tenancy right was undoubtedly capital asset under the law and, therefore, any gain arising from the transfer of the same has to be assessed under the head capital gains . The ld. CIT(A) considered the submissions of the assessee and accepted the same and allowed the claim of the assessee by holding that the impugned income was to be assessed under the head Income from capital gains . Relevant observations of ld.CIT(A) are reproduced below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of transfer of capital asset, the resultant income is required to be assessed as Capital Gains. 2.15 As explained above, the appellant was owner of the shops. Such shops were capital asset in the hands of the company. However, there was no transfer of ownership of the said shops. Thus, even after change of tenants, the appellant remained as owner of the asset i.e. the shops. In the facts and circumstances, the question is as to whether what was the capital asset transferred by the appellant giving rise to earning premium of ₹ 1,15,50,000/- consequently giving rise to capital gains. It has been discussed and explained in the decisions of Courts and Tribunals that a Right is a bundle of benefits embedded in some asset or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per section 2(14) capital asset means property of any kind held by an assessee, whether or not connected with his business or profession. A perusal of this definition shows that the legislature has intended to define the term capital asset in the widest possible manner. This definition has been curtailed to the extent of exclusions given in section 2(14) itself which include stock-in-trade and personal effects. The impugned asset does not clearly fall in the aforesaid exclusions given in section 2(14). The bundle of rights acquired by the assessee is undoubtedly valuable in terms of money. In our view, the said tenancy rights shall form part of a capital asset in the hands of the assessee and, therefore, any gains arising there from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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