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Commissioner of Income-tax, Bombay Vs. Shirinbai P. Pundole - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Judge
Reported in[1981]129ITR448(Bom)
ActsIncome Tax Act, 1961 - Sections 2(14), 2(47) and 45
AppellantCommissioner of Income-tax, Bombay
RespondentShirinbai P. Pundole
Appellant AdvocateR.J. Joshi, Adv.
Respondent AdvocateS. Dastur, Adv.
Excerpt:
- .....facts and in the circumstances of the case, the tribunal was justified in law in holding that the assessee's tenancy of the flat in rutty engineer house taken on lease in 1964 did not constitute a 'capital asset' within the meaning of section 2(14) of the i. t. ac 2. if the answer to question no. 1 is in the negative, whether the tribunal was justified in law in holding that the surrender of the tenancy right to m/s. jolly and maker pvt. ltd, in exchange for an ownership flat in the ruling 'il palazzo' did not constitute 'transfer' under section 2(47) of the income-tax ac 3. whether the tribunal was justified in law in holding that the transfer referred to in question no. 2 did not attract capital gain under section 45 of the income-tax ac ?' 2. the assessee was a tenant occupying a.....
Judgment:

Kania, J.

1. The is an application under s. 256 (2) of the I. T. Act, 1961 (hereinafter referred to as the said 'Act'), for directing the Income-tax Appeallate Tribunal to state a case and to refer to this court for determination the following questions :

'1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee's tenancy of the flat in Rutty Engineer House taken on lease in 1964 did not constitute a 'capital asset' within the meaning of section 2(14) of the I. T. Ac

2. If the answer to question No. 1 is in the negative, whether the Tribunal was justified in law in holding that the surrender of the tenancy right to M/s. Jolly and Maker Pvt. Ltd, in exchange for an ownership flat in the ruling 'IL PALAZZO' did not constitute 'transfer' under section 2(47) of the Income-tax Ac

3. Whether the Tribunal was justified in law in holding that the transfer referred to in question No. 2 did not attract capital gain under section 45 of the Income-tax Ac ?'

2. The assessee was a tenant occupying a flat in a building known as Rutty Engineer House under a lease taken some time in 1964. Reading the order of the AAC and the judgment of the Tribunal it appears clear that this tenancy was terminated by a notice to quit given some time in 1965 and the assesse thereafter occupied the said flat as statutory tenant. The building in which the said flat was situated was sold to Jolly and Maker (P.) Ltd. who served on the assessee a notice to quit purporting to be under s. 13(1)(hh) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947. The validity of this notice was disputed by the assessee but that would not make any difference to the fact that the assessee was a statutory tenant of the said flat. Ultimately, pursuant to an arrangement arrived at between the said Jolly and Maker (P.) Ltd. and the assessee, the assessee handed over vacant possession of the said flat and was given alternate accomodation in the shape of an ownership flat of a lesser area in the building 'IL PALAZZO' situated at Ridge Road, Bombay-400006. The question is whether this transaction attracts any liability to tax as a capital gain under the provisions of section 45 of the said Act.

3. We find that the facts in this case are in all material regards similar to the facts in the case of CIT v. Jehmi Jal Cooper (Income-tax Application No. 59 of 1977). In that case, the commissioner had made a similar application under s. 256(2) of the said Act to this court for directing the Tribunal to state a case and to refer the question set out in that application to this court for determination. The said application was summarily rejected by a Division Bench of this court on 20th June, 1977. The Commissioner applied for special leave to appeal against this decision to the Supreme Court of India and even that application was rejected by Supreme Court on 20th November, 1978. In these circumstances, we see no reason to direct the Tribunal to state a case and refer the aforestated questions as applied for by the Commissioner.

4. In the result, the application is dismissed and the rule is discharged with costs.


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