9911796707
TMI Blog2005 (3) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 33), XII Block, Kumarapark West Extension, Bangalore from late Dr. B.V. Iyengar, owner of the premises. The period of lease was 20 years. The rent was Rs. 800 per month with an increase of Rs. 150 per month at the end of every three years and first increase was from 28th Jan., 1977. A new lease deed dt. 8th Dec., 1979 was executed extending the duration of lease of fifty years from 1st Dec., 1979 and the lessee was allowed permission to construct first floor on the premises leased out at their own cost. It was also mutually agreed the lessor shall not increase the rent and lessee will pay enhanced corporation tax and wealth-tax if the corporation or wealth-tax levied or enhanced. A new clause No.3 was entered in the above agreement that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared longterm capital gain of Rs. 1.32 lakhs after reducing indexed cost of construction on first floor of nursing home. 3.1 The AO held that the assessee received amount of surrender of leasehold right. The amount was not received in lieu of surrendering the pre-emptive right to purchase the property and since the amount spent was on construction and not for acquisition of any leasehold right, no amount is deductible. Learned CIT(A) held that as per lease deed the assessee is not entitled for any compensation of investment in the leased premises. The agreement with the purchase of property mentions that the amount is paid for surrender of tenancy right and no other right. He accordingly confirmed the action of AO. The assessee is in furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ender of tenancy rights. 5. We have carefully considered the relevant facts and arguments advanced. It is true that there is a change in the lease agreement entered in 1976 than the agreement entered in 1979. The material difference is that the period of lease is increased from twenty years to fifty years. Clause 2(g) of the original lease deed as well as the new lease deed provided thus: "The lessees shall not be entitled for any compensation when the building is vacated either on the expiry of the lease or otherwise for any additions or alterations done by them. The additions or alteration, if made, shall only be for the convenience of the nursing home and not because the lessor wants or wishes to make certain additions or alterations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... structure taken on lease, for which no compensation is payable to the second party on termination of lease or on earlier vacation of the schedule premises. Whereas the said late Dr. B.V. Iyengar has also committed in the said lease agreement with the second party that in case of the sale of the schedule property, the first offer of sale shall be given to the second party and if the second party herein wished to buy the schedule property at any time during the subsistence of lease, the second party has to pay only 60 (sixty) per cent of the fair market value of the same, so that the nursing home is not disturbed. Whereas the said Mrs. Vanitha Iyengar sold the schedule premises by four sale deeds to the first party on 19th April, 1996 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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