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Cadell Weaving Mill Co. (P.) Ltd. vs Assistant Commissioner Of Income Tax. on 15 September, 1995
cites
Section 10 in The Income Tax Act, 1961 [Entire Act]
The Income Tax Act, 1961
Section 48 in The Income Tax Act, 1961 [Entire Act]
Section 5 in The Income Tax Act, 1961 [Entire Act]
Section 49 in The Income Tax Act, 1961 [Entire Act]
The Transfer Of Property Act, 1882
Commissioner Of Income-Tax vs Gulab Chand on 4 March, 1991
In fact the argument that s. 10(3) of the IT Act, 1961 does not apply to capital receipts was advance but was rejected by the Honble Allahabad High Court in the illustrious case of CIT v. Gulab Chand (supra) :
Commissioner Of Income Tax, Bangalore ... vs B. C. Srinivasa Setty, Etc. Etc on 19 February, 1981
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 a 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 s. 45 of the IT Act. Thus to our minds the pivotal argument advanced by the 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 capital receipt and because such a statutory tenancy bears no purchase value, the ratio of the Honble Supreme Court decision in B. C. Srinivasa Setty (supra) 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 constitute capital gains, does not appear to be either 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.