COMMISSIONER OF INCOME TAX MADURAI Vs. SUJATHA JEWELLERS

JUDGEMENT

(1.) REVENUE is the appellant in this appeal, which stands admitted on the following question of law:

(2.) THE following facts are not in dispute:

(3.) ON the above noted admitted facts, the question that was raised before the Deputy Commissioner of Income Tax was, whether transfer of leasehold rights in the land by the assessee in favour of the sub-lessee would amount to transfer of a capital asset at the hands of the assessee and if so, the consideration paid by the sub-lessee to the assessee would part-take the character of capital gains and assessable to tax as such? The Assessing Officer held that transfer of lease by the assessee would amount to transfer of a capital asset; the consideration received by the assessee under that transaction would part-take the character of capital gains and therefore liable to tax. The assessee went up in appeal before the Commissioner of Income Tax, who, by his order dated 25. 09. 1989 in I. T. A. No. 43/1989-90, found that there was no transfer of capital asset by the assessee when he sub-leased the property in favour of a third party and therefore no capital gain is involved at the hands of the assessee in respect of the transfer effected by him as indicated earlier. Revenue went up in appeal before the Income Tax Appellate Tribunal in I. T. A. No. 4462/mds/1989 and the Appellate Tribunal agreed with the findings of the Commissioner of Income Tax. The assessment year concerned in this case is 1986-87.