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TMI Blog1989 (8) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ng question of law under section 256(2) of the Income-tax Act, 1961, to this court : "Whether the Tribunal is right, on the facts and the circumstances of the case, in interpreting that the composite and lump sum amount Of Rs. 2,71,110 received by the lessee from the lessor is not liable to capital gains, though a part of this lump sum amount relates to consideration for premature surrender of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of a substantial portion of Tagore Villa including the portion of land leased out to the lessee free from encumbrance. Thereupon, the lessor and the lessee agreed to terminate the lease on terms mutually agreed upon by them. In the meantime, the assessee had spent Rs. 1,17,563 on improvement of the lands, but no building was, however, constructed thereon by the lessee. The property was pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the claim of the estimated cost of acquisition of the leasehold interest claimed at Rs. 3,31,388 on the ground that the assessee had only leasehold interest and not freehold interest in the property under consideration and the lessor had reversionary interest in the property. Further, he has also stated that there was no actual cost to the assessee in terms of money for the acquisition of leaseh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 45. Therefore, on the facts and in the circumstances of the case and in view of the ratio decidendi of the Supreme Court cited supra, we hold that the assessment of short-term capital gains was not justified in law ". There cannot be any dispute that the leasehold interest is an interest in land. The assessee had acquired the leasehold right for 99 years. This valuable right was acquired by vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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