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TMI Blog2014 (4) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... is a capital asset, the surrender of the tenancy right is a transfer and a consideration received is a capital receipt within the meaning of section 45 – thus, the contentions of the revenue is accepted that the assessee had acquired the new flat in lieu of the surrender of tenancy right in addition to the payment of the consideration and the difference in value that is Government value of the flat purchased by the assessee which is determined as the fair market value of the flat minus the consideration paid by the assessee is to be equated with the consideration received by the assessee for the relinquishment of the tenancy right in the erstwhile flat possessed by the assessee and the same is liable to be taxed as long term capital gain – ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the building developed by NEST Developers is in the same right as his tenancy right which is not transfer of tenancy right. The tenancy right is treated as capital asset only when such a tenancy right is transferred or surrendered for consideration. Since the assessee got only an alternative accommodation, the same cannot be treated as surrender of tenancy right because in such an incident the person acquiring the tenancy right for a consideration gets a right to sell the property acquired by him. Since the assessee got the alternate accommodation and did not transfer any asset as he only gets an improvement in his right, by paying certain premium, such premium can be treated as improvement in his right of tenancy. However, the AO did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid reversionary right interest in the said flat being a sum 120 times the monthly rent so as to acquire the ownership rights in the said flat on what is known as ownership basis. A combined reading of both the clauses indicates that the assessee has paid a consideration of Rs.36,000/- for the alleged conversion of the title in the new flat from lease hold interest to ownership. However, it is noted that the AO has brought on record that the Government value of the said flat is Rs.20,63,250/- being the fair market value of the property. 4.2 Considering the fact that the fair market value is far below the consideration paid for acquisition of the flat/improvising the title on ownership basis, the said facts result in the presumption that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable to the case of the assessee for the reason that in the said case the assessee was possessing adverse possession/tenant of the land and there has been a litigation between co-owners of the land and the occupiers. Subsequently in the litigation between them, a consent decree arrived at between them in a full and final settlement and hence it is not the case of any transfer of relinquishment of tenancy right. On the other hand, in the case of CIT Vs. D.P. Sandu Bors. Chembur P. Ltd. 273 ITR (1), the Hon ble Apex Court has held that it is well settled that the tenancy right is a capital asset, the surrender of the tenancy right is a transfer and a consideration received therefore, is a capital receipt within the meaning of section 45. Al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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