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TMI Blog2016 (5) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and in law, the Ld. CIT(A) erred in directing the Assessing Officer to assess premium of Rs. 1,15,50,OOO /- received by the appellant company on transfer of tenancy right of the shops from one tenant to another as capital gains and allowed deduction u/s 54EC of the Act. 2. "On the facts and circumstances of the case and in law, the impugned order of the Ld.CIT(A) is contrary to law and consequently merits to be set aside and that of the Assessing Officer be restored." 2. During the course of hearing arguments were made by Sm. Bharti Singh on behalf of the department and Shri S.S. Bansal, on behalf of the assessee. 3. The only effective issue raised by the revenue is that premium received by the assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shops. Even after the transfer of tenancy rights, the assessee continued to remain owner of these shops. It was further held by the Assessing Officer that undisputedly, the transfer of tenancy rights resulted into capital gain. But the resultant gain could not be taxed as capital gain in the hands of the assessee. Since as per Assessing Officer, the resultant capital gains would be taxable in the hands of outgoing tenants, but the amount received by the assessee as premium should be taxable in the hands of assessee as "income from other sources" and not as "capital gains". Resultantly, the Assessing Officer also disallowed the deduction claimed by the assessee u/s 54EC. Being aggrieved, assessee filed appeal before ld.CIT(A) wherein detaile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred their possessory rights of the rented shops to the new tenants with the consent of the appellant. In lieu of giving such consent for such transfer of possessory rights, the appellant received premium of Rs. 1,15,50,000/- from the old tenants. 2.14 The question for consideration is as to whether such premium received at Rs. 1,15,50,OOO/- was assessable in the hands of the appellant under the head "Capital Gains" as shown by the appellant or under the head "Income from Other Sources" as held by the Assessing Officer. The consequential question is as to whether the receipt of premium of Rs. 1,15,50,000/- was on account of transfer of certain capital asset or receipt without transfer of capital asset. In case the said premium was receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was also a capita! asset in the hands of the appellant company. This was more or less similar to "Tenancy Riqht" which is capital asset. Thus, on transfer of such capital asset i.e. giving consent to change in (he possession of rented premises from old tenant to a new tenant, the premium received Assessing Officer is, therefore, directed to assess such premium as Capital Gains and allow deduction u/s 54EC of the Act. These grounds of appeal are, therefore, allowed." 6. We have gone through the findings of ld.CIT(A). We agree with the observations of the ld.CIT(A) that during the course of time the assessee acquired bundle of rights with respect to the impugned shops. These rights include inter-alia, rights of possession in tenancy. As p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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