9911796707
TMI Blog1989 (2) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... and was dealing in stoves, petromax and incandescent light as sole proprietor. During the assessment year under consideration, the assessee sold his business to M/s Precious Sales Company. The stock was valued at Rs. 28,000 and furniture and fixtures at Rs. 2,000. Besides this, the assessee received a sum of Rs. 1,20,000 from the purchaser, which was claimed to be on account of sale of goodwill of business as per agreement entered into between the parties. The assessee claimed that this amount being an amount representing sale of goodwill, it is not assessable as capital gains in view of Supreme Court decision in the case of CIT vs. B.C. Srinivasa Setty (1981) 21 CTR (SC) 138 : (1981) 128 ITR 294 (SC). The alternative claim of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g and the Bombay High Court held that the assessee was not the owner of the factory sheds and he had to remove the fittings at the time of handing it over to the lessee and therefore the premises received in consideration cannot be said to bring in any asset or benefit of enduring nature to the assessee and therefore, no capital gain arises. He also submitted that the Delhi High Court in the case of Bawa Shiv Charan Singh vs. CIT (1984) 149 ITR 29 (Del), where a similar question arose before the Delhi High Court, it was held that no capital gain arises on account of surrender of tenancy rights. Reliance was also placed on the decision of the Andhra Pradesh High Court in the case of CIT vs. Marhapakula Agamma (1987) 165 ITR 385 (AP). 5. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alternative claim of the assessee is that this amount was received by the assessee for surrender of the tenancy rights. The CIT(A) has not agreed with the contention of the assessee. We have gone through the decision of the Bombay High Court on this point in the case of Mrs. Shirinbai P. Pundole where it was held amount received for surrender of tenancy rights is not liable to tax. In the case of Nila Products Ltd., again, the Bombay High Court held that surrender of tenancy rights in respect of factory sheds in exchange of ownership of flats in new building cannot be taxed. Similarly, the Delhi High Court in the case of Bawa Shiv Charan Singh held similar view. In the case of Markapakula Agamma the Andhra Pradesh High Court held that where ..... X X X X Extracts X X X X X X X X Extracts X X X X
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