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15. Shri Y.P. Trivedi, learned advocate for the assessee, and all other learned counsel appearing for the interveners also contended that the receipt is not liable to tax since it is in the nature of capital gains. They contend that the compensation received by the statutory tenant towards the surrender of the statutory tenancy rights to the land which is a capital asset or receipt. It is also the contention that the statutory tenant has a transferable right to the tenanted premises and by surrender of that right to the landlord, he derives capital receipt and, therefore, the sum of Rs. 1.40 crores received by the assessee-tenant in this case is in the nature of capital receipt and hence not taxable under Section 10(3) of the Income-tax Act, 1961.

"11. The question whether a statutory tenant has a transferable interest or not would depend upon the terms of the contractual tenancy. Such terms would continue to be operative even after the contractual tenancy comes to an end and the tenant becomes a statutory tenant. But this again would be subject to contrary provision in the Bombay Rent Act. It would, therefore, be necessary to discuss in detail this aspect of trans-ferability of contractual tenancy and/or statutory tenancy.

12. Under Section 108(j) of the T. P. Act in the absence of a contract to the contrary the lessee has a right to transfer his tenancy rights absolutely or by way of sub-lease, etc. This right would continue to exist in favour of a statutory tenant, but all this would be subject to the provisions of the Bombay Rent Act, Section 15 of the Bombay Rent Act provides that notwithstanding anything contained in any law but subject to a contract to the contrary it shall not be lawful for the tenant to sublet his interest. Thus, it would be necessary to read this provision and Section 108(j) of the T. P. Act together. So read, it would be clear that a tenant, under the T. P. Act, can sublet his interest if there is no contract to the contrary. However, Section 15 (now Section 15(1)) of the Rent Act prohibits any sublease, assignment or transfer by a tenant of his interest if there is no contract to the contrary ; a breach thereof renders the tenant liable to eviction under Section 13(1)(e). Thus, under the Rent Act, sub-tenancy will be permissible not when the contract is silent but when the contract specifically permits a sub-lease. The net result is that the contractual tenants will be divided into two categories ;

36. In cases coming in category No. "A" mentioned above, a statutory tenant will have no other right except to remain in possession of the tenanted premises so long as he goes on paying monthly rent and permitted increases. He has no estate as such and his right is personal to himself and he cannot transfer his right to any other person. Having regard to the above, we will have to hold that such a person will not have any interest in the property which he can convey to others. It is trite law to state that no man can convey a better title than what he himself has. When a tenant had no interest and his right is only personal and cannot be transferred what can he surrender to his landlord ? When he does not possess any interest where is the question of any transfer of such interest and where is the question of such transfer being a transfer of a capital asset under Section 45 of the Income-tax Act ? Thus, to our minds, the pivotal argument advanced by learned counsel for the assessee that the surrender of statutory tenancy amounts to surrender of tenancy right and the tenancy right is always considered to be a capital asset, that the transfer of such capital asset yields a capital receipt and because such a statutory tenancy bears no purchase value, the ratio of the Supreme Court decision in B.C. Srinivasa Setty's case [1981] 128 ITR 294 comes to the aid of the assessee and for that reason, the surrender of tenancy right does not give rise to capital gains and, therefore, no part of Rs. 1.40 crores received by the assessee constitutes capital gains, does not appear to be either an acceptable or convincing argument. As already stated above, in the facts of this case, there is nothing for the statutory tenant to transfer. He can only relinquish what he had under law. But when there was no right at all to relinquish, there is no question of transfer or relinquishment or surrender of that right.

53. After going through the judgment, we cannot agree with the contention of the learned Departmental Representative that the facts of that case are quite similar to the facts on hand. First, we do not know whether the tenancy in the cited case was a contractual tenancy or a statutory tenancy. If it is a statutory tenancy, what is the statute, the provisions of which were considered by the learned Bench of the Allahabad High Court. We have already considered the right of a statutory tenant under the Bombay Rent Act to sub-let the premises or to further transfer his interest to a third party. Following the Full Bench decision of the Bombay High Court, on the subject, we hold that the right of further transferring the interest of the statutory tenant would have to be found out from the recitals of the original tenancy agreement. If any right to transfer the interest of the tenancy was created under the original tenancy agreement, the same would continue even after the expiry of the terms stipulated under the contractual tenancy and it continues even when the tenant remains as a statutory tenant. When no such right was created under the terms of the original tenancy then no right of transfer of the tenancy right could exist in the statutory tenant. After thoroughly reading Gulab Chand's case [1991] 192 ITR 495, we found that in the Allahabad case, a distinction was drawn between capital gains simpliciter and capital gains chargeable to tax under Section 45 of the Income-tax Act. According to the said decision, there may be receipts which are of the nature of capital receipts but at the same time which are not taxable under Section 45 of the Income-tax Act. There may also be receipts which are in the nature of capital receipts and which are also taxable under Section 45 of the Act. Under the clear provisions of Section 10(3) of the Income-tax Act, the latter category mentioned above only are exempt from tax as casual and non-recurring.