9911796707
TMI Blog1995 (5) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in 1975 vide lease deed dt. 17th Dec., 1975, on a piece of land at Alwar. 3. The salient features of the lease deed, in brief, were as follows: (1) The lease was to be for ninety nine years. (2) The lease rent was to be Rs. 55.35 per year exclusive of local taxes which were to be borne by the lessee. (3) The lessee was to pay Rs. 26,114.80 towards development charges along with the rent for the first year. (4) The lessee was under an obligation to put up a shoddy yarn plant within a period of two years from the date of taking the possession. (5) The lessee had no right to sublet, underlet or sell its leasehold rights under the lease deed without the written consent of the lessor. (6) The lessee, however, could assign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(1) accepting the returned income of the assessee. 6. Subsequently, the Assessing Officer wrote a letter dt. 28th July, 1986, to the assessee informing him that Rs. 2,90,000 realised by RFC attracted capital gains tax and the assessee was asked to give explanation therefor. A notice dt. 11th Nov., 1987, was issued under s. 148 proposing to reassess the income. In reply to this notice, the assessee, vide its letter dt. 7th Dec., 1987 replied that the return originally filed be treated as return filed in response to the notice under s. 148. 7. The Assessing Officer, thereafter, reassessed the income on 9th March, 1990, computing the capital gains at Rs. 2,05,200 after granting deduction of Rs. 84,800 under s. 80T from the sale proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of assessment was also such that if no formal order or notice is received within a specified time, the acknowledgement was to serve as an assessment order. This is also evident from the letter of the assessee dt. 7th Dec., 1987 written to the Assessing Officer informing about the non-receipt of the original assessment order. Thus, the Assessing Officer, in fact had never formed any opinion about it and, hence, there was no question of changing the same. Our attention was drawn to the decision of the Supreme Court in the case of Indian Eastern Newspaper Society vs. CIT (1979) 12 CTR (SC) 190 : (1979) 119 ITR 996 (SC). However, a later decision of the Supreme Court in the case of A.L.A. Firm vs. CIT (1991) 93 CTR (SC) 133 : (1991) 189 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting principles and the Companies Act, 1956. Just as the taxability of an income does not depend on as to how it is accounted for in the books, so also leasehold land shown in the balance sheet does not make the holder of such land its owner. What the assessee held in reality and was dispossessed of was the leasehold right over that land, viz., to use the land for the purpose for which it was allotted to it at a specified rent. The assessee, therefore, merely possessed tenancy rights over the land which it relinquished in favour of RFC. 14. Having concluded that the assessee held tenancy right, the question arises about the taxability of gains arising from the transfer thereof. It is not in dispute that the tenancy right is a capital a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
