9911796707
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Issues involved:
The judgment addresses questions of law arising from the assessment year 1985-86, including the justification of Income-tax Appellate Tribunal's decisions regarding the applicability of certain legal precedents and the taxability of amounts received for surrender of tenancy rights. Question 1 & 2: The High Court found that the questions related to the Tribunal's expressions in its judgment rather than actual legal issues. The Tribunal's decisions were clarified, indicating that the Supreme Court's decision in CIT/CEPT v. Shamsher Printing Press did not apply to the case, and the tenancy right was not akin to goodwill. Therefore, these questions did not involve any legal issues requiring examination by the court. Question 3 & 4: The material facts revealed that the assessee received a sum for surrendering tenancy rights, which the Assessing Officer initially treated as unexplained income. However, the Assistant Commissioner (Appeals) accepted that the amount was for surrendering tenancy rights and not taxable. The Appellate Tribunal also upheld this view, rejecting the Revenue's contention that it should be considered a revenue receipt. The High Court examined relevant legal precedents and concluded that the receipt for surrendering tenancy rights was a capital receipt, not taxable as capital gain or business income. The court relied on a Karnataka High Court decision and rejected the Revenue's arguments, answering question 3 in the negative and question 4 in the affirmative, in favor of the assessee. This judgment clarifies the tax treatment of amounts received for surrendering tenancy rights, emphasizing the distinction between capital and revenue receipts based on legal precedents and the specific circumstances of the case.
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