Calcutta H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that there was no cost of acquisition of tenancy right when there cannot be a contract of tenancy in law without consideration of either premium or rent or both ?

Counsel Appeared

H.M. Dhar & R.C. Prasad, for the Revenue : J.P. Khaitan, for the Assessee

BHAGABATI PRASAD BANERJEE ,J.:

The Tribunal has referred the following question of law to this Court under s. 256(1) of the IT Act, 1961. “Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that there was no cost of acquisition of tenancy right when there cannot be a contract of tenancy in law without consideration of either premium or rent or both ?”

The assessment year involved is 1976-77 for which the relevant period of account ended on April 7, 1976. The Tribunal, following the decision of the Supreme Court in the case of CIT vs. B. C. Srinivasa Setty (1981) 21 CTR (SC) 138 : (1981) 128 ITR 294 (SC), decided the question in favour of the assessee. Following the said decision of the Supreme Court, a similar view was taken by the Kerala High Court in the case CIT vs. Merchandisers (P.) Ltd. (1990) 182 ITR 107(Ker). The Andhra Pradesh High Court in the case of CIT vs. Markapakula Agamma (1987) 165 ITR 386(AP), took the same view following the decision of the Supreme Court referred to above. The Delhi High Court in the case of Bawa Shiv Charan Singh vs. CIT (1985) 47 CTR (Del) 12 : (1984) 149 ITR 29(Del) took a similar view, following the decision of the Supreme Court mentioned above. We respectfully agree with the views expressed by the above different High Courts. In that view of the matter, this question of law is answered in the affirmative and in favour of the assessee.

There will be no order as to costs.

SUHAS CHANDRA SEN ,J. :

I agree.

[Citation: 192 ITR 533]