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TMI Blog1981 (9) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... mises No. 49/22, Generalganj, Kanpur in favour of the other six partners. It was further decided that the latter partners shall pay an ex-gratia payment of Rs. 10,000 to the assessee and Rs. 5,000 to Shri Maruti Prasad through his father and natural guardian Shri Prabhat Kumar in lieu of their surrendering tenancy rights in the above premises. It was further decided that the assessee and minor Shri Maruti Prasad would have no right to claim any interest in the tenancy right in any manner whatsoever. It was also stated in the above clause of the deed that the amounts were duly paid to the assessee and Shri Prabhat Kumar. 2. The ITO was of the view that the tenancy rights were not of a capital nature and could not be disposed of as such. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entry dt. 21st Feb, 1979. He also supported his submission by referring to the decision of Allahabad High Court in Sterling Machine Tools vs. CIT (1980) 123 of ITR 181 (All). His second and main submission was that u/cl (iv) of s. 28 of IT Act, 1961 profits and gains of business or profession included the value of any benefit or perquisite whether convertible into money or not arising from business or the exercise of a profession. His submission was that the amount of Rs. 10,000 was in the nature of a benefit to the assessee arising from business and was, therefore, taxable as his income from business. His third submission was that, in any case, it was in the nature of a return of rents, and, therefore, liable to be taxed u/s 4(1) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the amount in the total income. Since the amount was not received from the landlord, the question of linking it with return of rent of ceasing any of liability thereto so as to attract the provisions of s. 41(1) of the Act also, therefore, does not arise. Sec. 28(iv) of the Act is also not applicable as that section contemplates the benefit arising from business. The assessee was carrying on business in cloth. The cloth business as such did not give rise to any receipt. The assessee did not carry on the business of surrendering tenancy rights. It cannot, therefore, be said that the receipt was from any business carried on by the assessee. We are, therefore, of the opinion that the amount of Rs. 10,000 cannot be assessed as the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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