Case Law Details
Yogini Mohit Sahita Vs ITO (ITAT Mumbai)
The issue under consideration is whether amount received on surrender of such tenancy/sub-tenancy rights would be taxable as capital gains?
In the instant case, Smt. Saraswati Vithaldas Sahita occupied the said flat at 2nd floor of the building known as Gangasagar on license basis. This is crystal clear from the ‘Consent Term’ before the Hon’ble Court of Small Causes at Mumbai, quoted at length earlier. After demise of Mrs. Saraswati Vithaldas Sahita, her son Shri Vidyut Sahita occupied the said flat with his family. The said building Gangasagar was purchased by M/s H.M. Enterprises. For vacating the premises, M/s H.M. Enterprises filed suit against the occupier of Gangasagar building. An out of Court settlement was made so that occupier could not interfere with possession of M/s H.M. Enterprises. The appellant being daughter-in-law of Smt. Saraswati Vithaldas Sahita received Rs.25,00,000/- for not interfering possessions of M/s H.M. Enterprises. The Assessing Officer treated the amount received as capital gain and demanded tax in respect of the same. On appeal, the first appellate authority sustained the order.
ITAT states that in the suit, the defendants declared and confirmed to the Court of Small Causes at Mumbai that they have not created any right, title or interest or parted with possession of the suit premises in favor of any other person. The Tribunal deleted the orders of the lower authorities based on the precedents wherein the compensation received in respect of surrender of occupancy/possessory rights were held as outside the ambit of the capital gain. Hence, ITAT are of the considered view that the ratio laid down in the various decisions is applicable to the instant case. Following the same, they set aside the order of the Ld. CIT(A).
FULL TEXT OF THE ITAT JUDGEMENT
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