Whether when the title of the assessee on the impugned land is not clear, income arising from transfer of such land is to be treated as capital gain or income from other sources?

Bachhraj Factories Pvt Ltd Vs ITO (ITAT Mumbai)- in regard to 14 bighas, the assessee was found to be a trespasser. The law does not recognize the rights of a trespasser. Ordinarily, it is said that the possession is the nine point of ownership. The possessor has got right over the property and his right cannot be challenged by any one except the true owner. Undoubtedly, for some time, the assessee was the possessor of the land and building. But from the facts culled out from the records, it cannot be concluded that the possessory rights of the assessee bear any legal recognition. Unless such rights are protected by law to associate the word ‘right’ with the said type of possession will be a misnomer, since right is a legally protected interest. 

IN THE INCOME TAX APPELLATE TRIBUNAL

MUMBAI BENCH ‘B’ MUMBAI

M/s. Bachhraj Factories Pvt. Ltd., Vs. ITO

ITA No. 55/Mum/2009

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