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This appeal by the assessee is directed against the order dated 10.3.2011 of Commissioner of Income Tax(Appeals) for the assessment year 2007-08.

2. The assessee has raised the following grounds:

"1. (a) On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) has erred in confirming the action of the ACIT in taxing u/s 48 r.w.s. 55(2)(a) of the I.T. Act two sums one of ` 4,55,46,575/- and another of ` 5.00 lakhs received by the appellant for surrendering the possessary rights of premises situated at Mathuradas Mills Estate by incorrectly treating the said rights as tenancy rights as also sub tenancy rights.

Ground No. 1(a) to (c) is regarding assessment u/s 48 r.w.s 55(2)(a) of Income Tax Act of the amount received by the assessee for surrendering the rights in the premises in question. The assessee was in occupation of the premises on the ground floor, 1st floor and 2nd floor situated in the Mathuradas Mills Compound premises estate, Lower Parel, Mumbai. The premises was owned by Trustees of the Trust settled by M/s Karunashankar Punjaram. The said Trust leased the said premises to M/s Munshaw Investment Corporation, a partnership firm on monthly rent. M/s Munshaw Investment Corporation, further given this premises to the assessee's proprietorship concerned M/s Amersey Industries & Exports vide agreement dated 14.8.1969 for a monthly license fee of ` 14,050/-. The assessee surrendered its rights in the said premises in favour of M/s Piramid Retail Pvt. Ltd. vide agreement dated 7.2.2006 for compensation of ` 4,55,46,575/-. Further, during the year under consideration the assessee received additional sum of ` 5 lacs from Mr. Manek Davar for the P N Amersey HUF .

rights surrendered in respect of another premises situated at Mathuradas Mills Estate, Lower Parel, Mumbai.

3. Before the authorities below, the assessee contended that the assessee has possessory rights over the impugned property by virtue of the agreements between the parties and such rights cannot be equated with tenancy rights. Further, the assessee has submitted that since it has only surrendered its licence to use the said premises and the cost of acquisition of such licences being nil, the amount received by the assessee on surrendering of licence/possessory rights is not taxable. The AO held that the possessory rights in the property possess by the assessee are nothing but sub-tenancy rights available to the assessee having regard to the terms and conditions of the agreement entered into between the parties. The AO was of the view that the rights termed as possessory rights having been acquired by a validly executed tenancy agreement and also surrendered by way of agreement namely 'the deed of surrender of tenancy' and therefore, the impugned rights are nothing but tenancy rights covered u/s 2(14) r.w.s 55(2)(a) of the Act. Accordingly, the AO brought the said amount received by the assessee on surrendering of the rights of the property to tax under the head 'capital gain'. On appeal, the CIT(A) confirmed the action of the AO by following the order of his predecessor for the assessment year 2005-06, wherein an identical issue was involved.