TMI Blog2018 (4) TMI 1415X X X X Extracts X X X X X X X X Extracts X X X X ..... le asset and therefore what Official Liquidator has transferred was the lease right held by the lessee company. The Official Liquidator has sold the land on “ as is where is and whatever there is basis”. The law is very clear on this issue- “no one can transfer a better title then what it has”. The purchaser would have got a lease held right over the said plot of land and to get the ownership right 3.11 crores was paid to the assessee and vide agreement dated 04.09.2009 deed of confirmation and release was executed for release of ownership rights of the land under reference. J.K. Kashyap [2008 (3) TMI 10 - HIGH COURT OF DELHI] has decided a similar issue holding that consideration received for relinquishing the rights in property attracted provisions of section 45(1) making it liable to capital gains tax. Addition for scheme for gratuity - Held that:- From a bare reading of Section 36(1)(v) of the Act, it is manifest that the real intention behind the provision is that the employer should not have any control over the funds of the irrevocable trust created exclusively for the benefit of the employees – deduction allowed since the conditions stipulated in Section 36(1)(v) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dexed cost of acquisition 86,43,956 Less: Expenses incurred in connection with the transfer 1,48,530 Long term capital gains on property-I 2,23,07,514 5. The assessee was asked to furnish the details and on perusal of the same, the A.O. noticed that the assessee was the owner of a plot of land which was given on a long term lease of 98 years to M/s. Star Steel Limited (SSL). The A.O. further noticed that SSL who had the possession of the land, created a charge on the said plot of land as security for availing various credit facilities from banks, financial institutions, etc. SSL suffered heavy losses in its business and was referred to the BIFR. It was subsequently recommended for the winding up of SSL. The Official Liquidator was appointed. In accordance with the directions/order of the Hon'ble High Court of Gujarat, the Official Liquidator went through the necessary procedures to effect the sale of said plot of land for which leasehold rights were held by SSL. In respect to the public notices issued by the Official Liquidator, M/s. Silver Heights Builders Pvt. Ltd. offered to purchase the said plot of land which was accepted by the Hon'ble High Court of Gujarat and accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ownership remained with the assessee. 12. When the Official Liquidator appointed by the Hon'ble High Court of Gujarat sold the land held by SSL on lease, the assessee filed application before the Hon'ble High Court for recovery of possession of land in question. The Hon'ble High Court of Gujarat held that lease right are intangible asset and therefore what Official Liquidator has transferred was the lease right held by the lessee company. Moreover, the Official Liquidator has sold the land on " as is where is and whatever there is basis". The law is very clear on this issue- "no one can transfer a better title then what it has". The purchaser would have got a lease held right over the said plot of land and to get the ownership right ₹ 3.11 crores was paid to the assessee and vide agreement dated 04.09.2009 deed of confirmation and release was executed for release of ownership rights of the land under reference. 13. On identical set of facts, the Hon'ble High Court of Delhi in the case of Simka Hotels & Resorts 30 taxmann.com 265 had the occasion to consider the following facts and held as under:- Facts • The assessee entered into a memorandum of understanding (MoU) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently allotted a plot. [Para 12] Income from relinquishment of right in a property has to be assessed as capital gain • The decision in J.K. Kashyap v. Asstt. CIT [2008] 302 ITR 255/171 Taxman 390 (Delhi) is an authority for the proposition that even when an assessee becomes entitled to an undefined and undivided share in a property, through an agreement, which he later relinquishes, the gain has to be assessed as income from capital gain, and not as income from other sources. [Para 13] • The High Court agreed with the above reasoning. That apart, in the present case, the assessee had acquired right to a specific plot; furthermore, the interest was in the nature of an actionable claim, which could be asserted in legal proceeding. The tax authorities had issued a no objection certificate in respect of the transaction. In these circumstances, the reporting of the amount received as capital gains was correct. Moreover, Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC) is an authority for the proposition that as long as the assessee makes a full and true disclosure of the income, the fact that it might claim that as falling under one head which is ultimately not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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