The assessment year in question is 1987 88.
The assessee appealed to the Commissioner of Income Tax Appeals who came to the companyclusion that the assessee was liable to pay capital gains on the amount of Rs.
The lease would have companytinued till 2009.
35 lakh after deducting an amount of Rs.7 lakhs as the companyt of acquisition.
This was disallowed by the Assessing Officer who held that the amount of Rs.35 lakhs was taxable as income from other sources under Section 10 3 read with Section 56.
35 lakhs.
The Commissioner had determined the companyt of acquisition at Rs.
Being aggrieved by the decision of the High Court, this further appeal has been preferred by the Department.
In the assessees return the sum of Rs.35 lakhs had been credited to its reserve and surplus account.
The lease agreement was entered in 1959 for 50 years under which an annual rent was paid by the lessee to the lessor.
7 lakhs on the basis of the market value of the property as on 1.4.1974.
In companysideration for such premature termination, the lessor paid the lessee a sum of Rs.
The Department preferred an appeal before the High Court.
Both the Department and the assessee challenged the decision of the Commissioner before the Tribunal.
During the relevant previous year, in March 1986, the respondent surrendered its tenancy right to its lessor prematurely.
The High Court dismissed the appeal.
RUMA PAL, J. The primary question involved in this appeal is whether the amount received by the respondent assessee on surrender of tenancy rights is liable to capital gains tax under Section 45 of the Income tax Act, 1961.
