1982 (6) TMI 109

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..... two sale deeds dated 30-12-1975 and 18-3-1976, the assessee conveyed 14 cents out of that for a total consideration of Rs. 61,000. In the assessment for the assessment year 1976-77, the ITO computed the capital gains arising out of the transfers at Rs. 21,422. In the previous year for the assessment year 1977-78 the assessee transferred another plot of 6 cents for a consideration of Rs. 33,000. The capital gains arising out of the transfer was computed at Rs. 16,039 in the assessment for the assessment year 1977-78. The ITO rejected the claim of the assessee that no capital gains, chargeable under the Income-tax Act, 1961 ('the Act'), arose on the transfer of these assets. The cost of acquisition to the assessee was found to be 'nil' while .....

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..... 128 ITR 294, no capital gains tax is exigible in the instant case. 5. The departmental representative relying on the orders of the lower authorities pointed out that the asset transferred by the assessee is land and not an intangible right as in the case of goodwill. It is a capital asset in the acquisition of which cost is conceivable and, therefore, tax on capital gains is leviable under the provisions of the Act. Leasehold right as well as jenmom right are stated to be property, the acquisition of which may cost something in terms of money. It is stated that in computing the capital gains the value of the improvements has been deducted and since the assessee has not made any payment for the acquisition of the asset, the cost of acquisi .....

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..... set belonged to him absolutely, and what he had conveyed was the full proprietary right as owner of the land. The right to claim assignment of landlord's right did not then exist as a separate asset and did not form the subject-matter of the transfer. The tenancy right also did not subsist as a distinct right. The only asset transferred is the land, which is an immovable property. Under the scheme of the Kerala Land Reforms Act, payment of purchase price by the cultivating tenant on the assignment to him of the land owner's right is contemplated. It is by mutual agreement that the assessee appears to have obtained under the said Act the assignment without liability to pay the purchase price. The assessee cannot, therefore, claim that the la .....

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