ITO - 16(1)(2), MUMBAI V. KAMAL CO.OP.HSG. SOCIETY LTD., MUMBAI

ITA 6551/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0592 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 07-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Keywords: Capital asset; Cost of acquisition; Capital receipt
• Section: 2(14)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA , ACCOUNTANT MEMBER ITA NO.6551/MUM/2013(A.Y. 2010-11) THE ITO 16(1) (2), MATRU MANDIR, MUMBAI 400007 VS. KAMAL CO-OP.HSG. SCTY. LTD., 69, WALKESHWAR RD., MUMBAI 400006 PAN:AAAAK0570C APPELLANT RESPONDENT APPELLANT BY MS. S. PADMAJA RESPONDENT BY SHRI JITENDRA JAIN DATE OF HEARING 31/03/2015 DATE OF PRONOUNCEMENT 22 /4/ 2015 ORDER PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD.CIT(A)-27 DATED 26/8/2013 FOR ASSESSME NT YEAR 2010-11. GROUNDS OF APPEAL READ AS UNDER: 1. THE LD. CIT (A) ERRED IN DELETING THE ADDITION S UNDER THE HEAD INCOME FROM OTHER SOURCES ON ACCOUNT OF COMPENSATION RECEI VED IN SETTLEMENT OF EXPLOITATION OF CAPITAL ASSET IN LIEU OF- RIGHT- NE GATIVE COVENANT WHERE- IN RIGHT OF ASSESSEE SOCIETY HAS NOT BEEN RELINQUISHED . 2. THE LD. CIT (A) FAILED TO APPRECIATE LANDMARK HO N'BLE ALLAHABAD HIGH COURT JUDGEMENT IN CASE OF CIT(A) V/S GULABCHAND ( 1991) 192 ITR 495 (ALL) WHEREIN IT CATEGORICALLY HELD THAT / BECAUSE RECEIPT IS CASUAL AND NON- RECURRING IN NATURE WHICH WAS ACCIDENTAL, FORTUITOU S, UNANTICIPATED AND UNFORESEEN AND THERE WAS NO EXPECTATION OF BEING RE PEATED IS NOT A CAPITAL GAIN CHARGEABLE UNDER THE HEAD CAPITAL GAINS; NEITH ER IT IS A RECEIPT ARISING ITA NO.6551/MUM/2013(A.Y. 2010-11) 2 FROM BUSINESS OR PROFESSION AND THUS TAXABLE AS INC OME FROM OTHER SOURCES. 2. THE ISSUE INVOLVE IN THE PRESENT APPEAL IS REGA RDING ASSESSABILITY OR OTHERWISE OF A SUM OF RS.10.54 CRORES RECEIVED BY T HE ASSESSEE SOCIETY FROM RUPA INVESTMENT PRIVATE LTD. (RIPL) IN PURSUANCE O F CONSENT DECREE AROSE FROM APPEAL NO.1864 OF 2009 FILED BY THE ASSESSEE AGAINS T RIPL BEFORE HONBLE BOMBAY HIGH COURT. RIPL WAS IN THE PROCESS OF CONS TRUCTION OF PART OF THE PLOT ( OF LARGER PROPERTY I.E. PLOT NO.69 SITUATED AT WA LKESHWAR ROAD), WHICH WAS IN FRONT OF FLATS OF THE ASSESSEE SOCIETY. 2.1 THE PLOTS OF LAND OF BOTH THE ASSESSEE SOCIETY AND ALSO OF RIPL ORIGINALLY FORMED A PART OF LARGER PROPERTY BELONG TO KURWA FA MILY. ON 10/07/1930, A PARTITION WAS EFFECTED AMONGST MEMBERS OF KURWA FAM ILY AND ACCORDING TO PARTITION DEED FIVE PLOTS OF LARGER PROPERTY WERE A LLOTTED AS UNDER: S.NO. PLOT NO. ALLOTTED TO (I) (A) HYDERALIA ESMAILJI KURWA (II) (B) SHUJUDDIN ESMAILJI KURWA (III) (C) AMINUDDIN ESMAILJI KURWA (IV) (D) ABDEIA ESMAILJI KURWA (V) (E) NOORUDEEN ESMAILJEE KURWA 2.2 PLOT (A) & (B) WERE SEA FACING & PLOTS (C),(D) (E) WERE ON THE BACK SIDE OF PLOT (A) & (B). ON ACCOUNT OF FURTHER TRANSFERS PL OT (E) CAME INTO THE OWNERSHIP OF THE ASSESSEE SOCIETY BY AN INDENTURE DATED 9 TH SEPTEMBER, 1968. SOMETIME IN 1994 ASSESSEE SOCIETY CAME TO KNOW THA T RIPL[ BEING OWNER /DEVELOPER OF PLOT(A)] IS IN THE PROCESS OF CONSTRU CTION OF PLOT (A) WHICH EXCEEDS THE EXISTING HEIGHT OF THE BUILDING EARLIER SITUATE D AT PLOT(A). AS ACCORDING TO TERMS OF AFOREMENTIONED PARTITION, WHICH WAS BIND ING ON SUCCESSORS, THE ITA NO.6551/MUM/2013(A.Y. 2010-11) 3 HEIGHTS OF SEA FACING PLOTS COULD NOT BE INCREASED BY THEIR OWNERS FROM THE EXISTING HEIGHT, THEREFORE, THE ASSESSEE OBJECTED T O SUCH MOVE OF RIPL AND SEQUENCE OF THE DISPUTE BETWEEN ASSESSEE SOCIETY AN D RIPL HAS BEEN DESCRIBED IN DETAIL IN THE ORDER PASSED BY AO AND LD. CIT(A). FOR THE SAKE OF BREVITY ALL THE FACTS RELATING TO THE DISPUTE ARE NOT MENTIONED HERE AS THE SAME WOULD BE REPETITION ONLY, HOWEVER, MAIN HAPPENINGS ARE AS FO LLOWS: (1) ON 12/9/1994 RIPL ADDRESSED A LETTER TO THE ASS ESSEE REQUESTING THAT IT MAY BE RELIEVED FROM THE COVENANT REGARDING RESTRI CTION OF HEIGHT OF THE BUILDING. (2) ON 30/09/1994 VIDE LETTER DATED 30/9/94 IT WAS INFORMED BY THE ASSESSEE TO RIPL THAT ITS MANAGING COMMITTEE HAD TAKEN A DEC ISION NOT TO GIVE UP THE BENEFIT OF RESTRICTIVE COVENANT IN FAVOUR OF ANYO NE. (3) IN APRIL 1995 ASSESSEE FILED SUIT IN BOMBAY HI GH COURT. (4) ON 10/5/1995, HIGH COURT ISSUED AD-INTERIM ORD ER DIRECTING JOINT MEASUREMENT OF THE STRUCTURE BEING CONSTRUCTED BY RIPL. A JOINT REPORT WAS SUBMITTED. THE CONSTRUCTION WAS MEASURED 26.81 FEE T ABOVE THE GROUND LEVEL. ACCORDING TO ASSESSEE SUCH HEIGHT WAS IN VIOLATION OF NEGATIVE COVENANT MENTIONED IN THE DEED OF PARTITION (5) ON 25/7/1996 HIGH COURT PASSED AN ORDER RESTRA INING RIPL FROM THE PROCEEDING WITH THE CONSTRUCTION. (6) ON 4/7/1997 THE ASSESSEE CAME TO KNOW THAT SAN CTIONED PLANS WAS AMENDED AND THAT THE CONSTRUCTION OF THE DISPUTED B UILDING WAS COMPLETED AND SUBSEQUENTLY OCCUPIED. (7) ON 6/7/1997 ASSESSEE TOOK OUT CONTEMPT NOTICE IN THE HIGH COURT OF MOTION AGAINST RIPL FOR BREACH OF COURTS RESTRAIN ORDER. (8) ON 9/1/2002 CONTEMPT PETITION WAS FILED AND ON 21/2/2004 THE HIGH COURT MADE THE CONTEMPT NOTICE ABSOLUTE BY AN EX PA RTE ORDER. THE HIGH COURT DIRECTED THE IMPRISONMENT OF THE DIRECTORS OF RIPL AND ORDERED THE REMOVAL OF DISPUTED STRUCTURE. (9) ON 24/4/2004 RIPL FILED A CIVIL APPLICATION AP PEAL FOR SETTING ASIDE EX PARTE ORDER. ITA NO.6551/MUM/2013(A.Y. 2010-11) 4 (10) ON 9/10/2006 AN ORDER WAS PASSED BY HIGH COUR T GRANTING EXPEDITIOUS HEARING OF THE MAIN SUIT. (11) ON 26/6/2009 HIGH COURT REFERRED THE MATTER B ACK TO BOMBAY CITY CIVIL COURT. (12) ON 31/10/2009 CIVIL COURT DISPOSED THE SUIT A ND FINDING GIVEN BY THE COURT WERE AS UNDER :- I) RESTRICTIVE COVENANT DEFINITELY EXISTED IN THE DEED OF PARTITION AND BINDS THE ASSESSEE AS WELL AS RIPL BEING SUCCESSORS -IN TITLE TO THE ORIGINAL COVENANTEE AND THE COVENANT. II) ACCORDING TO ASSESSEE HEIGHT OF THE ORIGINAL ST RUCTURE WAS 22 FT. AND ACCORDING TO RIPL IT WAS 26.81 FT. HOWEVER, ASSESSE E FELL SHORT IN PROVING WHAT WAS THE ACTUAL ORIGINAL HEIGHT OF THE STRUCTUR E BY SUFFICIENT DOCUMENTARY EVIDENCE AND THUS ISSUE WAS RULED IN FA VOUR OF RIPL. (13) AGAINST THE AFOREMEMTIONED ORDER OF CIVIL COU RT ASSESSEE FILED APPEAL NO.1864/2009 BEFORE HIGH COURT. (14) ON 15/1/2010 CONSENT TERMS WERE ARRIVED AT BE TWEEN THE ASSESSEE AND RIPL WHICH WERE APPROVED BY HIGH COURT VIDE DECREE PASSED ON 18/1/2010. THE MAIN TERMS WHICH ARE RELEVANT FOR THE PURPOSE O F DETERMINING THE ISSUE ARE AS UNDER :- (A) BOTH THE PARTIES HAVE AGREED THAT THE TERMS AN D CONDITIONS CONTAINED IN THE PARTITION DEED DATED 10TH JULY 1930 ARE VALI D, SUBSISTING AND BINDING ON THE PARTIES. IT IS ACCEPTED THAT THIS DE ED OF PARTITION CONTAINS THE RESTRICTIVE COVENANT -'AND THE HYDERALLY ESMAILJI K UNOA AND SHUJAUDDIN ESMAILJI KURWA FOR THEMSELVES THEIR HEIRS, EXECUTOR S, ADMINISTRATORS AND ASSIGNS COVENANT AND BIND NOT TO BUILD ANY HOUSE ST RUCTURE HIGHER THAN THE ONE EXISTING ON PLOT (A) IN PLAN NO. 1 IN ORDER THAT THE AMENITIES AND CONVENIENCES OF THE PLOTS (C) AND (D) AND (E) IN PL AN NO. 1 BE NOT IN ANY WAY IMPAIRED.' IN SHORT, THE ASSESSEE SOCIETY HAS NOT RELINQUISHED ITS BASIC RIGHT TO THE BENEFIT OF THE RESTRICTIVE COVENANT. (B) BOTH THE PARTIES MAINTAIN THEIR STANDS REGARDIN G THE HEIGHT OF THE DISPUTED STRUCTURE. WHEREAS ACCORDING TO RIPL, THE STRUCTURE WAS IN ACCORDANCE WITH THE ORDER OF THE CIVIL COURT DATED 31ST OCTOBER, 2009, THE ASSESSEE SOCIETY SAYS THAT THIS STRUCTURE IS NOT IN ACCORDANCE WITH THE RESTRICTIVE COVENANT SPECIFIED IN THE PARTITION DEE D. ITA NO.6551/MUM/2013(A.Y. 2010-11) 5 (C) RIPL SHALL PAY TO THE ASSESSEE SOCIETY A SUM OF RS. 10,54,11,111/- TO THE ASSESSEE SOCIETY AS COMPENSATION FOR VIOLATION OF COVENANT TO WITHDRAW ITS OBJECTIONS TO THE EXTENT SPECIFIED IN THE CONSENT TERMS. (D) THE PARTIES HAVE AGREED THAT THE HEIGHT OF THE STRUCTURE SHOULD BE MAINTAINED AS PER THE PLANS ANNEXED TO THE CONSEN T TERMS AS AGREED. (E) THE CONSENT TERMS WILL BE BINDING ON THE SUCCES SORS OF THE ASSESSEE SOCIETY AND RIPL. (F) WITH THESE CONSENT TERMS, THE EXISTING DISPUTE WOULD BE TREATED HAS RESOLVED. 2.3 ON THE ABOVE FACTS THE ASSESSEE IN ITS RETURN O F INCOME CLAIMED THAT THE RECEIPT OF RS.10.54 CRORES IS NOT LIABLE TO BE INCL UDED IN ITS INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO REQUIRED TH E ASSESSEE TO EXPLAIN AS TO WHY THE SAID RECEIPT HAS BEEN TREATED AS NON-TAXABL E. IN RESPONSE ASSESSEE HAS FILED REPLY VIDE LETTER DATED 20/12/2012 WHICH IS REPRODUCED IN THE ASSESSMENT ORDER AND ALL THE FACTS WHICH ARE MENTIO NED ABOVE ARE PART OF THE SAID REPLY OF THE ASSESSEE AND HAVE NOT BEEN DISPUT ED BY THE AO. THE SUM AND SUBSTANCE OF THE REPLY OF THE ASSESSEE IS AS UNDER :- 1. ACCORDING TO WELL ESTABLISHED LAW ALL RECEIPTS ARE NOT INCOME (MEHBOOB PRODUCTION PVT. LTD. VS. CIT 106 ITR 758 ,(BOM)) 2. THERE IS FUNDAMENTAL DIFFERENCE BETWEEN RECEIPTS WH ICH ARE CAPITAL IN NATURE AND THOSE THAT ARE REVENUE IN NATURE. 3. ACCORDING TO GENERAL RULE ONLY REVENUE RECEIPTS C AN BE TAXED AS INCOME AND NOT CAPITAL RECEIPT. EXCEPTION TO SUCH RULE IS THE ONLY WHEN THERE IS SPECIFIC PROVISION IN THE ACT, ENABLING SUCH TAXATI ON OF A PARTICULAR CAPITAL RECEIPT. 4. THE AMOUNT RECEIVED BY THE ASSESSEE IS IN RESPECT O F RESTRICTIVE COVENANT (ELSEWHERE IN THE ORDER ALSO MENTIONED AS NEGATIVE CONVENANT) WHICH IS DEFINED IN SEC.40 OF THE TRANSFER OF PROPERTY ACT, 1882. ITA NO.6551/MUM/2013(A.Y. 2010-11) 6 5. FROM THE FACTS OF THE CASE, IT WOULD BE EVIDENT THA T THE NATURE OF RIGHT, AS CREATED BY THE RESTRICTIVE COVENANT, MERELY TOUCHED THE OWNERSHIP RIGHT OF RIPL WITHOUT CREATING ANY INTEREST THEREIN. IT I S MERE RIGHT TO RESTRAIN RIPL FROM CONSTRUCTING ANY OBSTRUCTIVE STRUCTURE BE YOND THE PERMISSIBLE HEIGHT FOR MORE BENEFICIAL ENJOYMENT OF THE ASSESSEES OWN PLOT AND BUILDING THEREON. 6. THE ASSESSEE IN THE SUIT FILED AGAINST RIPL CLAIME D THAT DISPUTED STRUCTURE CONSTRUCTED BY RIPL IMPAIRED THE RIGHT OF THE ASSESSEE FOR MORE BENEFICIAL ENJOYMENT OF ITS OWN PROPERTY. THER EFORE, THE TREATMENT OF THE IMPUGNED AMOUNT SHOULD BE CONFINED TO SUCH R IGHT AND DE HORS THE BASIC PROPERTY RIGHTS. IT IS COMPENSATION FOR I NFRINGEMENT OF RIGHT AND NOT AMOUNTING TO TRANSFER. 7. SINCE THE IMMOVABLE PROPERTY ITSELF IS CAPITAL IN THE HANDS OF THE ASSESSEE, THE RIGHT TO A MORE ENJOYMENT OF THIS P ROPERTY IS CAPITAL IN NATURE. 8. AS PER TERMS OF CONSENT, ASSESSEE DID NOT DEPART F ROM ITS RIGHT WHICH IS SUBSISTING. THEREFORE, THERE IS NO TRANSFER AND I N ABSENCE OF TRANSFER THE RECEIPT CANNOT BE TAXED UNDER CAPITAL GAIN. 2.4 UPON RECEIPT OF AFOREMENTIONED REPLY, THE AO AGAIN ISSUED SHOW CAUSE NOTICE DATED 8/1/2013 TO THE ASSESSEE ASKING AS TO: 1) WHY THE RECEIPT OF RS.10.54 CRORES SHOULD NOT BE TA XED AS REVENUE RECEIPT NOT COVERED BY THE PRINCIPLE OF MUTUALITY. 2) WHY THE RECEIPT OF RS.10.54 SHOULD NOT BE TAXED UND ER THE HEAD CAPITAL GAINS TAKING THE COST AS NIL WITHOUT REFERENCE TO THE ABOVE PROPOSAL. 2.5 AGAIN ASSESSEE FILED LETTER DATED 20/1/2013 WHICH IS ALSO REPRODUCED IN THE ASSESSMENT ORDER. ITA NO.6551/MUM/2013(A.Y. 2010-11) 7 2.6 IN REPLY TO FIRST QUERY IT WAS MENTIONED THAT M ERELY BECAUSE A RECEIPT IS NOT GOVERNED BY THE PRINCIPLE OF MUTUALITY; IT DOES NOT MEAN THAT THE SAME IS TAXABLE. 2.7 IN REGARD TO SECOND QUERY IT WAS SUBMITTED THAT ELABORATE SUBMISSIONS HAVE ALREADY BEEN MADE TO SAY THAT THOUGH THE RECEI PT IS CAPITAL IN NATURE BUT NO CAPITAL GAIN WAS LEVIABLE AS THERE WAS NO TRANS FER INVOLVED. WITHOUT PREJUDICE IT WAS SUBMITTED THAT SINCE COST OF ACQ UISITION CANNOT BE ASCERTAINED, CAPITAL GAIN CANNOT BE COMPUTED RELYI NG ON DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. B.. SRI NIVAS SHETTY (128 ITR 294)(SC). IT WAS ALSO SUBMITTED THAT AS IMPUGNED TRANSACTION DOE S NOT FIND PLACE IN AMENDED SEC.55(2), THE SAME ALSO CANNOT BE APPLIED TO IMPOSE CAPITAL GAIN ON IMPUGNED TRANSACTION. 2.8 THE AO DID NOT ACCEPT THE ABOVE SUBMISSIONS OF THE ASSESSEE ON THE FOLLOWING GROUNDS:- (1) THE ASSESSEE BEING SUCCESSOR OF ORIGINAL OWNER OF PLOT (E) HAS ACQUIRED RIGHT TO OBJECT ANY CONSTRUCTION HIGHER THAN EXISTING ON PLOT (A). (2) THE AMOUNT OF RS.10.54 CRORES HAS BEEN RECEIVE D BY THE ASSESSEE AS COMPENSATION FOR WITHDRAWING ITS OBJECTION TO THE E XTENT SPECIFIED IN THE CONSENT TERM. (3) FROM READING OF CONSENT TERMS FOLLOWING CONCLU SIONS CAN BE DRAWN: (I) CLAUSE (B) SHOWS THAT BOTH THE PARTIES HAVE REL AXED THEIR RESPECTIVE STAND. CLAUSE (C) SAYS THAT ASSESSEE IS WITHDRAWIN G ITS OBJECTION TO THE EXTENT SPECIFIED IN CONSENT TERMS. (II) EVEN AFTER WITHDRAWING THE OBJECTIONS AS ABOV E, THE ASSESSEE RETAINED ITS RIGHT OF NEGATIVE COVENANT WHICH IS A CAPITAL A SSET FOR FUTURE EXPLOITATION. IN OTHER WORDS IT WAS A COMPENSATION WITHOUT LOSING THE CAPITAL ASSET. (III) IN SHORT THE ASSESSEE SOCIETY HAS NOT RELINQ UISHED THE BASIC RIGHT TO BENEFIT OF THE NEGATIVE COVENANT. ITA NO.6551/MUM/2013(A.Y. 2010-11) 8 (4) THE ASSESSEE HAS EXPLOITED THE CAPITAL ASSET A ND HAS EARNED A SUM OF RS.10.54 CRORES, THEREFORE, THE SAME IS LIABLE TO BE ASSESSED AS INCOME FROM OTHER SOURCES. (5) THE RIGHT DERIVED BY THE ASSESSEE IS NOTHING B UT A CAPITAL ASSET. (6) RECEIPT FROM EXPLOITATION OF A CAPITAL ASSET IS REVENUE IN NATURE, WHEREAS A RECEIPT FROM TRANSFER OR EXTINGUISHMENT OF CAPITA L ASSET WOULD BE CAPITAL RECEIPT. (7) AS PER DECISION OF HONBLE SUPREME COURT IN THE CASE OF KARAM CHAND THAPAR & BROS, 80 ITR 167, IF THERE IS DESTRUCTION OF THE SOURCE OF INCOME WHILE TERMINATING A CONTRACT THEN THE AMOUNT RECEIV ED WOULD BE CAPITAL RECEIPT. IN THE PRESENT CASE SOME INFRINGEMENT OF NEGATIVE C OVENANT DID NOT RESULT IN ANY LOSS OF SOURCE OF INCOME, THEREFORE, IT CANNOT BE TREATED AS CAPITAL RECEIPT. (8) DEFINITION OF CAPITAL ASSET PROVIDED IN SECTION 2(14) IS VAST ENOUGH AND WILL COVER EVERY POSSIBLE INTEREST WHICH A PERSON CAN HOLD AND ENJOY EXCEPT THOSE SPECIFICALLY EXCLUDED UNDER SECTION2(14). (9) THE EXPRESSION INCOME ACCORDING TO DICTIONARY MEANING IS A THING THAT COMES IN. IT DOES NOT MERELY INCLUDE WHAT IS RECOV ERED OR WHAT COMES IN BY EXPLOITING THE USE OF A PROPERTY BUT ALSO WHAT ON E SERVES BY USING IT ONESELF(SIC). THEREFORE, THE AMOUNT RECEIVED BY TH E ASSESSEE IS INCOME. (10) ACCORDING TO DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF MALABAR INDUSTRIAL COMPANY LTD., VS. CIT, 198 ITR 6 11(KER) DAMAGES AND COMPENSATION RECEIVED FOR LOSS OF AGRICULTURAL INCO ME WAS HELD TO BE CHARGEABLE TO TAX AS INCOME FROM OTHER SOURCES. IN THE PRESEN T CASE THE AMOUNT RECEIVED BY THE ASSESSEE IS IN THE NATURE OF DAMAGES FOR BRE ACH OF NEGATIVE COVENANT, HENCE, TAXABLE AS INCOME FROM OTHER SOURCES. ITA NO.6551/MUM/2013(A.Y. 2010-11) 9 11. ACCORDING TO THE DECISION OF HONBLE PATNA HIG H COURT IN THE CASE OF CIT VS. BOKARO STEEL LTD., 170 ITR 522 THE DEFINITION O F INCOME IN SECTION 2(14) IS NOT EXHAUSTIVE AND INCLUDE ALSO SUCH THINGS AS WO RD SIGNIFIES ACCORDING TO ITS NATURAL IMPORTANCE. 2.9 ON THE BASIS OF ABOVE POINTS, THE AO HAS CONCLU DED THAT IT IS ESTABLISHED BEYOND DOUBT THAT THE COMPENSATION RECEIVED BY THE ASSESSEE IS NOTHING BUT EXPLOITATION OF CAPITAL ASSET BUT RIGHT OF NEGATIV E COVENANT PERPETUALLY BELONGED TO THE ASSESSEE AND AS SUCH THE SAME IS TA XABLE AS INCOME FROM OTHER SOURCES. 3. AGGRIEVED, ASSESSE FILED AN APPEAL BEFORE LD. CI T(A) CHALLENGING THE ABOVE ACTION OF THE AO. APART FROM REITERATING THE SUBMI SSIONS MADE BEFORE AO, THE SUBMISSIONS OF THE ASSESSEE BEFORE LD. CIT(A) WERE AS FOLLOWS: (1) IN CASE OF INFRINGEMENT OF NEGATIVE COVENANT, T HE ONLY REMEDY AVAILABLE TO THE ASSESSEE WILL BE TO FILE A SUIT FOR SPECIFIC PE RFORMANCE FOR ENFORCING THE COVENANT AND IF THAT IS NOT AVAILABLE, THEN TO REME DY BY WAY OF DAMAGES. (2) ACCORDING TO SECTION-40 OF TRANSFER OF PROPERTY ACT, THE RIGHT OF NEGATIVE COVENANT WOULD NOT CONSTITUTE PROPERTY AS ASSESSEE DID NOT DERIVE ANY RIGHT IN THE COVENANTERS PLOT/PROPERTY. (3) THERE IS INHERENT DIFFERENCE BETWEEN THE TERMS( 1) RIGHT AND (2) PROPERTY. PROPERTY IS UNDERSTOOD AS A BUNDLE OF RIGHTS AS A GAINST RIGHT WHICH IS ENJOYMENT TO THE EXCLUSION OF OTHERS. (4) DAMAGES PER-SE DO NOT BECOME INCOME MERELY BEC AUSE THEY ARE MONEYS RECEIVED OR RECEIVABLE TO AN ASSESSEE. IT IS ONLY WHEN THE DAMAGES ARE COMPENSATION FOR LOSS OF INCOMES THAT THE SAME MAY ASSUME THE CHARACTER OF INCOME ON THE PRINCIPLE THAT WHAT REPLACES INCOME S HOULD LOGICALLY BE INCOME. (5) IN THE PRESENT CASE DAMAGES ARE COMPENSATION RECEIVED FOR IMPARTMENT OF THE RIGHT OF THE ASSESSEE TO ENJOY THE CONVENIEN CES AND AMENITIES ASSOCIATED WITH THE PLOT AND BUILDING OF THE ASSESSEE AND NOT FOR THE LOSS OF INCOME. THUS, COMPENSATION CANNOT ACQUIRE THE NATURE OF REVENUE R ECEIPT. ITA NO.6551/MUM/2013(A.Y. 2010-11) 10 (6) ONE OF THE MOST SIGNIFICANT CHARACTERISTICS OF THE PROPERTY IS TRANSFERABILITY. THAT A MERE RIGHT TO SUE IS NOT PROPERTY, THEREFORE, NOT A CAPITAL ASSET AS HAS BEEN HELD BY HONBLE BOMBAY HI GH COURT IN THE CASE OF CITVS. ABHASBHOY A. DEHGAMWAL(SUPRA), WHEREIN THE DECISION RELIED IN CASE OF CIT VS. TATA SERVICES LTD. (SUPRA) HAS BEEN DIS TINGUISHED. 3.1 THUS, IT WAS PLEADED THAT AO HAS COMMITTED AN E RROR IN BRINGING TO TAX THE COMPENSATION OF RS.10.54 CRORE AS INCOME FROM O THER SOURCES. 3.2 LD. CIT(A) AFTER CONSIDERING THE AFORESAID SUB MISSION HAS DELETED THE ADDITION. HIS CONCLUSIONS ARE SUMMARIZED AS BELOW . (I) IN THE FACTS OF THE CASE THE ONLY QUESTION FOR CONSIDERATION WOULD BE WHETHER THE COMPENSATION RECEIVED BY THE ASSESSEE WAS IN THE NATURE OF PROPERTY OR LOSS OF INCOME OWING TO WHICH THE SAME COULD BE BROUGHT TO TAX AS PER DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. TATA SONS (SUPRA) RELIED UPON BY AO TO SAY THAT THE RIGHT OF SPECIFIC PERFORMANCE IS PROPERTY AND CAPITAL ASSET. (II) IN THE FACTS OF THE PRESENT CASE, THE COMPENSA TION RECEIVED BY THE ASSESSEE IS FOR WITHDRAWAL OF A SUIT WITHIN THE CON SENT TERMS AND APPROVED BY HONBLE HIGH COURT. THE ASSESSEE DID NOT RELINQUIS H ITS RIGHT EMANATING FROM NEGATIVE COVENANT. THE ASSESSEE ALSO DID NOT TRANS FER ANY OF ITS CAPITAL ASSETS, THEREFORE, IT CANNOT BE SAID THAT THERE WAS AN EXPL OITATION OF THE ASSET. IT IS ALSO NOT EVEN A CASE WHERE RIGHT TO MORE BENEFICIA L ENJOYMENT IS PARTED WITH/SOLD/WAIVED/RELINQUISHED BY THE ASSESSEE. THE REFORE, THERE WAS NO QUESTION OF TRANSFER OF ANY ASSET. (III) IN THE PRESENT CASE THE COMPENSATION IS FOR N ON-ECONOMIC DAMAGE I.E. DISTRESS OF INCONVENIENCE SUFFERED, THEREFORE, RELI ANCE HAS WRONGLY BEEN PLACED BY AO ON THE FOLLOWING DECISIONS. ITA NO.6551/MUM/2013(A.Y. 2010-11) 11 (I) KARAMCHAND THAPAR & BROS (SUPRA) (II) BHAGWAN DAS JAIN VS. GOI, 128 ITR 315 (SC) (III) MALABAR INDUSTRIAL COMPANY LTD. VS. CIT(SUPR A) (IV) BOKARO STEEL LTD. (SUPRA) (IV) ACCORDING TO THE HONBLE SUPREME COURT IN THE CASE OF CHARI & CHARI LTD. 57 ITR 400(SC) AND RAI BAHADUR JAIRAM VALJI (1959) SUPPL. (1) SCR 110,113 FOR DETERMINING THE QUESTION THAT WHETHER A RECEIPT IS CAPITAL OR REVENUE, IT IS NOT POSSIBLE TO LAY DOWN ANY SINGLE TEST AS INFALLIBLE OR SINGLE CRITERIA AS DECISIVE, WHICH MUST ULTIMATELY DEPE ND ON THE FACTS OF THE PARTICULAR CASE AND AUTHORITIES BEARING ON THE QUE STIONS ARE VALUABLE ONLY AS INDICATING THE MATTERS THAT TO HAVE TO BE TAKEN INT O ACCOUNT IN REACHING A DECISION. (V) ACCORDING TO THE FACTS OF THE CASE, THE MOST AP PROPRIATE CASE APPLICABLE WOULD BE THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ABHASBHOY A. DEHGAMWALLA (SUPRA) AS THE RIGHT WHICH REMAINED WITH THE NEGATIVE COVENANT WAS ONLY TO SEEK DAMAGES AND THE SAME BEI NG NOT IN THE NATURE OF PROPERTY OR CAPITAL ASSET COULD NOT BE TERMED AS I NCOME AND HENCE THE QUESTION OF EXPLOITATION OF THE SAME WOULD NOT ARIS E. (VI) THE COMPENSATION RECEIVED BY THE ASSESSEE FOR ASSIGNING A CONTRACT HAVING A RIGHT TO SPECIFIC PERFORMANCE IN FACT, I S BY WAY OF DAMAGES FOR BREACH OF CONTRACT AFTER ITS RIGHT TO SPECIFIC PERF ORMANCE WAS DEFEATED. SUCH DAMAGES DO NOT INVOLVE CAPITAL GAINS AS THE RIGHT T O SUE FOR DAMAGES IS NOT A CAPITAL ASSET. IT WAS A CAPITAL RECEIPT AS PER DEC ISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ABHASBHOY A. DEHGAMWALLA (SUP RA). 3.3 THUS, LD. CIT(A) HAS DECIDED THE ABOVE ISSUE IN FAVOUR OF THE ASSESSEE. THE DEPARTMENT IS AGGRIEVED AND HAS FILED AFOREMENT IONED GROUNDS OF APPEAL. ITA NO.6551/MUM/2013(A.Y. 2010-11) 12 4. LD.CIT-DR READING FROM THE ASSESSMENT ORDER NARR ATED THE FACTS, WHICH HAVE ALREADY BEEN DESCRIBED IN DETAIL IN THE ABOVE PART OF THIS ORDER, THEREFORE, FOR THE SAKE OF BREVITY AND ALSO IN VIEW OF THE FAC T THAT THERE IS NO DISPUTE SO AS IT RELATES TO FACTS, THE SAME ARE NOT MENTIONED AGA IN. THEREAFTER, LD. CIT-DR ONE BY ONE DISCUSSED THE CASE LAW RELIED UPON BY AO . 4.1 LD. CIT-DR FIRST MENTION THE DECISION IN THE CA SE OF CIT VS. TATA SERVICES LTD. (SUPRA). REFERRING TO THE SAID DECISION IT W AS SUBMITTED BY HER THAT DEFINITION OF CAPITAL ASSET PROVIDED IN SEC. 2(1 4) IS VAST AND INCLUDES PROPERTY OF ANY KIND HELD BY THE ASSESSEE, WHETHER OR NOT CONNECTED WITH THE BUSINESS OF THE ASSESSEE. THEREFORE, SHE PLEADED T HAT THE NEGATIVE COVENANT RIGHT HELD BY THE ASSESSEE WAS IN THE NATURE OF CAP ITAL ASSET. SHE PLEADED THAT AS PER DEFINITION OF TRANSFER GIVEN IN SEC.2(47), THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASSET OR EXTINGUISHMENT OF RIGHT THEREIN WOULD CONSTITUTE TRANSFER. THUS, SHE SUBMITTED THAT N EGATIVE COVENANT BEING IN THE NATURE OF PROPERTY PROVIDED THE ASSESSEE WITH A RIG HT TO SPECIFIC PERFORMANCE OF THE NEGATIVE COVENANT. SUCH RIGHT WAS EXPLOITED BY THE ASSESSEE, THEREFORE, THE GAIN BY THE ASSESSEE FROM EXPLOITATION OF THE RIGHT HAS GIVEN RISE TO TAXABLE INCOME. SHE PLEADED THAT AO HAS PROVIDED THE ASSES SEE WITH OPPORTUNITY TO EXPLAIN THAT WHY THE IMPUGNED RECEIPT MAY NOT BE CO NSIDERED TO BE REVENUE RECEIPT. THE ASSESSEE COULD NOT SATISFACTORILY EXP LAIN, THEREFORE, AO WAS RIGHT IN BRINGING THE SAID AMOUNT TO TAX AND LD. CIT(A) H AS WRONGLY DELETED THE ADDITION. 4.2 THE NEXT DECISION RELIED UPON BY HER IS KARAMCH AND THAPAR AND BROS.VS. CIT(SUPRA). READING FROM THE HEAD NOTES SHE PLEADE D THAT IN THE SAID CASE AMOUNT RECEIVED BY THE ASSESSEE ON TERMINATION OF M ANAGING AGENCY WAS HELD TO BE CAPITAL RECEIPT. SHE SUBMITTED THAT THOUGH T HE ISSUE IN THAT CASE WAS DECIDED AGAINST THE REVENUE BUT PRINCIPLE LAID DO WN IN THE SAID CASE IS THAT IF THERE IS DESTRUCTION OF SOURCE OF INCOME WHILE TERM INATING A CONTRACT, THEN THE AMOUNT RECEIVED WILL BE CAPITAL IN NATURE AND IF TH ERE IS NO DESTRUCTION OF THE ITA NO.6551/MUM/2013(A.Y. 2010-11) 13 SOURCE OF INCOME THEN THE RECEIPT WOULD REVENUE IN NATURE. SHE PLEADED THAT SINCE THERE IS NO DESTRUCTION OF ASSET, THEREFORE, THE RECEIPT WAS OF REVENUE IN NATURE. 4.3 LD. CIT-DR FURTHER RELIED ON THE DECISION IN TH E CASE OF BHAGWAN DASS JAIN VS. UNION OF INDIA .128 ITR 315 (SC). READING FROM HELD PORTION SHE SUBMITTED THAT EVEN IN ITS ORDINARY ECONOMIC SENSE, THE EXPRESSION INCOME INCLUDES NOT MERELY WHAT IS RECEIVED OR WHAT COMES IN BY EXPLOITING THE USE OF A PROPERTY BUT ALSO WHAT ONE SERVES BY USING IT ONE SELF. 4.4 MALABAR INDUSTRIAL COMPANY LTD. VS. CIT (SUPRA) SHE SUBMITTED THAT IN THAT CASE AMOUNT RECEIVED BY THE ASSESSEE FOR EXTEN SION OF TIME FOR PAYMENT OF SALE CONSIDERATION OF AGRICULTURAL LAND HAS BEEN HE LD TO BE ASSESSABLE AS INCOME FROM OTHER SOURCES AS AGAINST THE CLAIM OF THE ASSESSEE THAT THE SAME SHOULD BE CONSIDERED TO BE AS AGRICULTURAL INCOME . 4.5 CIT VS. BOKARO STEEL LTD., 34 TAXMAN 374 (PAT). THE DEFINITION OF INCOME PROVIDED IN SEC.2(24) IS AN EXPRESSION OF ELASTIC AMBIT AND IS MORE GENERAL TERM THAN PROFIT OR GAIN. A RECEIPT MA Y BE TAXABLE AS INCOME, ALTHOUGH IT MAY CONTAIN NO ELEMENT OF PROFIT OR GAI N. RELYING ON THE AFOREMENTIONED DECISION IT WAS SUBMITTED BY LD. CIT -DR THAT AO WAS RIGHT IN TREATING THE IMPUGNED RECEIPT AS REVENUE RECEIPT AN D BRINGING THE SAME TO TAX AS INCOME OF THE ASSESSEE. 4.6 LD. CIT-DR FURTHER SUBMITTED THAT LD. CIT(A) HA S COMMITTED AN ERROR IN GRANTING THE RELIEF TO THE ASSESSEE. SHE SUBMITTED THAT SUCH RELIEF HAS BEEN GIVEN CONTRARY TO THE VIEW ADOPTED BY THE AO AS THE CASE LAW RELIED UPON BY LD. CIT(A) ARE NOT APPLICABLE TO THE FACTS OF THE ASE SSEES CASE. SHE DISTINGUISHED THE DECISION RELIED UPON BY LD. CIT(A) IN THE CASES OF: (I) CIT VS. ABHASBHOY A. DEHGAMWAL(SUPRA),(II) CIT VS. BEST AND COMPANY (PRIVATE) LTD. (SUPRA)(III) CIT VS. CHARI & CHARI L TD. (SUPRA) &(IV) CIT VS. RAI ITA NO.6551/MUM/2013(A.Y. 2010-11) 14 BAHADUR JAIRAM VALJI (SUPRA). SHE SUBMITTED THAT THESE DECISIONS HAVE BEEN RENDERED ON DIFFERENT FACTS OF EACH CASE AND RELYIN G ON THESE DECISIONS RELIEF CANNOT BE GIVEN TO THE ASSESSEE. 4.7 LD. CIT-DR FURTHER RELIED UPON THE DECISION IN THE CASE OF VINOD V. CHHAPIA, 31 TAXMANN.COM 415 (MUMBAI TRIBUNAL). IN THE SAID CASE ASSESSEE WAS LANDLORD. OLD TENANT OF THE ASSESSEE TRANSFER RED TENANCY RIGHT IN FAVOUR OF NEW TENANT & GIVEN CONSIDERATION TO ASSESSEE AS WEL L AS OLD TENANT. THE RECEIPT BY THE ASSESSEE WAS CONSIDERED TO BE ASSESSABLE AS INCOME FROM OTHER SOURCES. 4.8 IN THIS MANNER, LD. CIT-DR COMPLETED HER ARGU MENT. IT MAY BE POINTED OUT HERE THAT AS IN THE GROUNDS OF APPEAL FILED BY THE DEPARTMENT THERE IS REFERENCE OF THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. GULABCHAND , 60 TAXMAN 7, THEREFORE, LD. CIT-DR WAS REQUIRED TO EXPLAIN THAT FOR WHICH LEGAL PROPOSITION RELIANCE HAS BEE N PLACED ON SAID DECISION AND ON WHICH PARA OF THE SAID DECISION SHE WOULD LIKE TO PLACE RELIANCE. SHE SUBMITTED THAT THE SAID CASE IS NOT RELEVANT FOR TH E PRESENT CASE AND SHE SUBMITTED THAT SHE IS NOT PLACING RELIANCE ON THE SAID DECISION. 5. ON THE OTHER HAND, LD. AR OF THE ASSESSEE HAS RE LIED UPON THE ORDER PASSED BY LD. CIT(A) AND SUBMISSION MADE BEFORE HIM . IN SHORT LD. AR SUBMITTED THAT AS SUCCESSOR TO THE ORIGINAL OWNER O F THE PLOT (E), THE ASSESSEE ACQUIRED THE RIGHT OF NEGATIVE COVENANT ACCORDING TO WHICH ASSESSEE HAS A RIGHT TO PREVENT THE OWNER OF PLOT(A) FOR RAISING T HE HEIGHT OF BUILDING SITUATED IN PLOT (A) FROM THE HEIGHT OF OLD STRUCTURES ON PL OT (A). HE SUBMITTED THAT SUCH NEGATIVE COVENANT RIGHT DOES NOT PROVIDE ANY RIGHT TO THE ASSESSEE IN THE PLOT(A). THE ONLY RIGHT WHICH COULD BE EXERCISED B Y THE ASSESSEE IS TO PREVENT THE RAISING OF THE HEIGHT OF BUILDING BY THE OWNER OF PLOT (A) FROM A PARTICULAR LEVEL. TO EXERCISE SUCH RIGHT THE ONLY REMEDY AVAI LABLE WITH THE ASSESSEE WAS TO FILE A CIVIL SUIT TO RESTRAIN THE OWNER OF PLOT (A ) FOR DOING SO. EXERCISING SUCH ITA NO.6551/MUM/2013(A.Y. 2010-11) 15 RIGHT TO SUE, A SUIT WAS FILED BY THE ASSESSEE IN T HE HIGH COURT AND FINALLY WHEN THE MATTER WAS RESTORED TO THE CIVIL COURT, THE CIV IL COURT HAS RULED IN FAVOUR OF THE OWNER OF THE PLOT (A). THOUGH THE RIGHT OF NEGATIVE COVENANT OF THE ASSESSEE WAS RECOGNIZED, BUT THE MATTER WAS DECID ED AGAINST THE ASSESSEE FOR THE REASON THAT ASSESSEE SOCIETY COULD NOT PROVE WI TH THE SUFFICIENT DOCUMENTARY EVIDENCE THAT WHAT WAS THE ACTUAL ORIGI NAL HEIGHT OF THE OLD STRUCTURE. THUS, IT WAS HELD BY THE CIVIL COURT T HAT THE HEIGHT OF THE BUILDING CONSTRUCTED BY RIPL WAS NOT EXCEEDING THE ACTUAL OR IGINAL HEIGHT OF THE STRUCTURE. NOT SATISFIED WITH THE SAID ORDER OF CI VIL COURT ASSESSEE FILED THE APPEAL BEFORE HONBLE BOMBAY HIGH COURT AND IN THE PROCESS A COMPROMISE WAS ARRIVED AND CONSENT TERMS WERE SIGNED ACCORDIN G TO WHICH IMPUGNED AMOUNT HAS BEEN RECEIVED. 5.1 IT WAS SUBMITTED THAT NO DOUBT THAT THE DEFINI TION OF INCOME AS PROVIDED IN SECTION 2(24) IS INCLUSIVE, VAST NOT EXHAUSTIV E BUT THE CHARACTER OF RECEIPT MUST BE IN THE NATURE OF INCOME AND IF THE CHARAC TER OF RECEIPT IS NOT INCOME THEN IT SHOULD BE SPECIFICALLY INCLUDED IN THE DEFINITION OF INCOME BY THE ACT. HE SUBMITTED THAT TO ASCERTAIN WHETHER OR NOT THE IMPUGNED RECEIPT CAN BE ASSESSED AS INCOME OF THE ASSESSEE, THE FIR ST QUESTION TO BE DETERMINED WOULD BE THE NATURE OF THE RECEIPT THAT WHETHER TH E SAME IS CAPITAL OR REVENUE IN NATURE. IT WAS SUBMITTED THAT EVEN CAPITAL RECE IPT CAN BE CONSIDERED TO BE INCOME ONLY IN ACCORDANCE WITH THE PROVISIONS OF TH E INCOME TAX ACT AND UNLESS SO SPECIFIED IN THE ACT ITSELF, THE SAME C ANNOT BE CONSIDERED TO BE INCOME ASSESSABLE UNDER THE ACT. THERE IS CLEAR D EFINITION BETWEEN CAPITAL RECEIPT WHICH ARE NOT TAXABLE AND THE CAPITAL RECE IPT WHICH ARE TAXABLE UNDER THE SPECIFIC PROVISION OF THE ACT. HE SUBMITTED TH AT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE IMPUGNED RECEIPT BY T HE ASSESSEE CANNOT BE CHARACTERIZED AS REVENUE IN NATURE FOR THE SIMPLE R EASON THAT IT IS ONLY A COMPENSATION RECEIVED BY THE ASSESSEE FOR INFRINGEM ENT OF THE RIGHT OF THE ASSESSEE OF NEGATIVE COVENANT. TO SUPPORT HIS CONT ENTION LD. AR RELIED UPON THE FOLLOWING DECISIONS: ITA NO.6551/MUM/2013(A.Y. 2010-11) 16 (I) CIT VS. ABHASBHOY A. DEHGAMWALL & ORS.(SUPRA) TO CONTEND THAT RIGHT TO SUE FOR DAMAGES FOR BREACH OF CONTRACT CANNOT BE BR OUGHT TO TAX AS CAPITAL GAIN. (II) BHARAT FORGE CO. LTD. VS. CIT (SUPRA) TO CON TEND THAT THERE BEING NO EXTINGUISHMENT OF ANY RIGHT IN THE CAPITAL ASSET BY TRANSFER WHEN THE ASSESSEE RECEIVED COMPENSATION FOR BREACH OF CONTRACT, SUCH COMPENSATION CANNOT BE CONSIDERED AS CAPITAL GAIN. (III) CIT VS. J. DALMIYA ,149 ITR 215 (DEL), WHEREI N IT HAS BEEN HELD THAT RIGHT TO CLAIM DAMAGES BEING A MERE RIGHT TO SUE, SAME IS NO T TRANSFERABLE AND THERE BEING NO TRANSFER, DAMAGES AWARDED BY ARBITRATOR C ANNOT BE SUBJECTED TO CAPITAL GAIN TAX. (IV) CADDLE WEAVING COMPANY VS. CIT, 249 ITR 265(BO M), WHEREIN IT HAS BEEN HELD THAT SEC.2(24) DEFINES THE WORD INCOME. THE DEFINITION IS AN INCLUSIVE DEFINITION. HOWEVER, IT IS WELL SETTLED THAT CAPIT AL RECEIPTS DO NOT COME WITHIN THE AMBIT OF INCOME TAX ACT EXCEPT TO THE EXTENT O F ANY CAPITAL RECEIPT BEING EXPRESSLY SOUGHT TO BE COVERED BY THE ACT OF THE PA RLIAMENT AS IN THE CASE OF SECTION 2(24)(VI). IN FACT SURRENDER VALUE RECEIV ED BY THE ASSESSEE HAS ACCRUED ON TRANSFER OF THE CAPITAL ASSET BUT DOES NOT CHARG EABLE UNDER SECTION 45 FOR WANT OF COST OF ACQUISITION. HOWEVER, FROM THAT, O NE CANNOT BRING SUCH A RECEIPT UNDER SECTION 10(3) BECAUSE SECTION 10(3) R EFERS TO TYPES OF INCOME WHICH DO NOT FORM PART OF TOTAL INCOME. IN OTHER W ORDS, RECEIPTS HAS TO BE INCOME BEFORE IT COMES WITHIN THE PURVIEW OF SECTIO N 10(3) OF THE ACT. SECTION 10(3) OF THE ACT DOES NOT APPLY TO A CAPITAL RECEIP T. LD. AR SUBMITTED THAT IN THE PRESENT CASE THE IMPU GNED RECEIPT NEITHER FALL WITHIN THE AMBIT OF CAPITAL RECEIPT AS NO TRAN SFER OF ASSET IS INVOLVED, NOR THE SAID RECEIPT FALL WITHIN THE AMBIT OF INCOME AS THE CHARACTER OF THE RECEIPT IS NOT INCOME EARNED OR RECEIVED BY THE ASSESSEE. REL YING UPON THIS DECISION IT WAS SUBMITTED THAT THE IMPUGNED RECEIPT EVEN CANNOT BE ASSESSED AS INCOME FROM OTHER SOURCES. ITA NO.6551/MUM/2013(A.Y. 2010-11) 17 (V) NIYATI B. YODH VS. ACIT, 4 SOT 491. IN THE S AID CASE LD. AR INVITED OUT ATTENTION TO THE FOLLOWING OBSERVATIONS OF THE TRIB UNAL. 12. THE QUESTION BEFORE US IS AS TO WHETHER THE IMP UGNED SUM CONSTITUTES INCOME FROM OTHER SOURCES , AS IS THE C ASE OF REVENUE BEFORE US, OR NOT. SECTION 56(1) OF THE INCOME-TAX ACT, 1961 L AYS DOWN THAT INCOME OF EVERY KIND WHICH IS NOT TO BE EXCLUDED FROM THE TOT AL INCOME UNDER THIS ACT SHALL BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD IN COME FROM OTHER SOURCES , IF IT IS NOT CHARGEABLE TO INCOME-TAX UND ER ANY OF THE HEADS SPECIFIED IN SECTION 14, ITEMS A TO E. IT WOULD, TH US, FOLLOW THAT ONLY SUCH RECEIPTS AS ARE IN THE NATURE OF INCOME CAN BE COVE RED BY THE SCOPE OF EXPRESSION INCOME FROM OTHER SOURCES . IN THE PRESE NT CONTEXT, IT IS ALSO USEFUL TO EXAMINE WHETHER A CAPITAL RECEIPT CAN BE SUBJECTED TO TAX AS AN INCOME FROM OTHER SOURCES OR NOT. 13. SECTION 2(24), WHICH DEFINES THE EXPRESSION INC OME , GIVES ONLY AN INCLUSIVE DEFINITION. IN OTHER WORDS, THIS SECTION ONLY SETS OUT THE NATURE OF RECEIPTS WHICH ARE SPECIFICALLY, AND WITHOUT PREJUD ICE TO THE GENERALITY OF CONNOTATIONS OF THAT EXPRESSION, INCLUDIBLE IN THE SCOPE OF INCOME . SECTION 2(24)(VI) LAYS DOWN THAT INCOME INCLUDES ANY CAPIT AL GAINS CHARGEABLE TO TAX UNDER SECTION 45 OF THE ACT. A PLAIN READING OF THIS PROVISION MAKES IT AMPLY CLEAR THAT ONLY SUCH CAPITAL GAINS, AS MAY BE CHARGEABLE TO TAX UNDER SECTION 45, ARE TO BE INCLUDIBLE IN THE SCOPE OF INCOME , SO FAR AS THE PROVISION OF SECTION 2(24)(VI) ARE CONCERNED. THE Q UESTION THEN ARISES WHETHER CAPITAL RECEIPTS, NOT COVERED BY THE SCOPE OF SECTION 2(24)(VI), CAN ALSO BE INCLUDED IN INCOME OR NOT. 14. DEALING WITH THE CONNOTATION OF THE EXPRESSION INCOME IN THE CONTEXT OF CAPITAL RECEIPTS NOT CHARGEABLE TO TAX UNDER SECTIO N 45, A CO-ORDINATE BENCH OF THIS TRIBUNAL, IN THE CASE OF SHAW WALLACE & CO. LTD. V. DY. CIT [2002] 80 ITD 156 (CAL.) AND TO WHICH ONE OF US WAS A PART Y, HAD, INTER ALIA, OBSERVED AS FOLLOWS : HON BLE SUPREME COURT HAS, IN THE CASE OF PADAMAR AJE R. KADAMBANDE V. CIT [1992] 195 ITR 877(SC) , OBSERVED THAT, WE H OLD THAT THE AMOUNTS RECEIVED BY THE ASSESSEE DURING THE FINANCIAL YEARS IN QUESTION HAVE TO BE REGARDED AS CAPITAL RECEIPTS AND, THEREFORE, ARE NO T INCOME WITHIN MEANING ITA NO.6551/MUM/2013(A.Y. 2010-11) 18 OF SECTION 2(24) OF THE INCOME-TAX ACT. THIS CLEARL Y IMPLIES, AS IS THE SETTLED LAW, THAT A CAPITAL RECEIPT, IN PRINCIPLE, IS OUTSI DE THE SCOPE OF INCOME CHARGEABLE TO TAX AND A RECEIPT CANNOT BE TAXED AS INCOME UNLESS IT IS IN THE NATURE OF A REVENUE RECEIPT OR IS SPECIFICALLY BROUGHT WITHIN AMBIT OF INCOME BY WAY OF SPECIFIC PROVISIONS OF THE INCOME- TAX ACT. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT THE RECEIPT IN QUESTION CANNOT BE BROUGHT TO TAX UNLESS THE SAME IS HELD TO BE A REVE NUE RECEIPT IN NATURE OR UNLESS, IN CASE IT IS HELD TO BE A CAPITAL RECEIPT, THERE ARE SPECIFIC PROVISIONS TO ARTIFICIALLY TREAT THIS CAPITAL RECEIPT AS INCOM E. IT IS NOT THE CASE OF THE REVENUE THAT THERE ARE ANY SPECIFIC PROVISIONS TO A RTIFICIALLY TREAT THIS RECEIPT AS AN INCOME AND, THEREFORE, TAXABILITY OF THIS RECEIPT SOLELY HINGES ON THE NATURE OF RECEIPT I.E., WHETHER THE RECEIPT IS CAPITAL RECEIPT OR REVENUE RECEIPT. THE ABOVE OBSERVATIONS ARE RELEVANT IN THE CONTEXT BEFORE US INASMUCH AS WE ARE IN SEISIN OF A SITUATION WHERE THE REVENUE H AS COME OUT WITH A CATEGORICAL FINDING TO THE EFFECT THAT THE IMPUGNED RECEIPT IS NOT EXIGIBLE TO TAX AS A CAPITAL GAIN. IT IS ALSO NOT REVENUE S CAS E THAT THE IMPUGNED RECEIPT, EVEN IF THAT BE A CAPITAL RECEIPT, IS EXIG IBLE TO TAX BY WAY OF ARTIFICIALLY BRINGING THE SAME WITHIN THE AMBIT OF INCOME UNDER SECTION 2(24). THE VERY FOUNDATION OF EVEN THIS REASSESSMEN T PROCEEDING IS THAT THE IMPUGNED RECEIPT IS NOT ACCEPTED TO BE A CAPITAL RE CEIPT, AND IS, BY IMPLICATION, SOUGHT TO BE TREATED AS A REVENUE RECE IPT, THAT THAT A RECEIPT IN THE NATURE OF 'INCOME FROM OTHER SOURCES' INHERENTL Y IS. IN OUR CONSIDERED VIEW, UNLESS A PARTICULAR CAPITAL RECEIPT IS LIABLE TO BE TAXED AS 'INCOME' BY VIRTUE OF SPECIFIC DEEMING PROVISION UNDER S. 2(24) (VI), THE CAPITAL RECEIPTS ARE OUTSIDE THE AMBIT OF 'INCOME'. THE TAXABILITY O F THIS RECEIPT AS AN 'INCOME FROM OTHER SOURCE', THEREFORE, HINGES ON TH E IMPUGNED RECEIPT BEING HELD TO BE A RECEIPT OF REVENUE NATURE. 15. IT IS UNDOUBTEDLY THE SETTLED LEGAL POSITION TH AT THE EXPRESSION 'INCOME' IS TO BE CONSTRUED AS OF WIDEST AMPLITUDE SO AS THI S EXPRESSION MAY BE GIVEN ITS NATURAL AND GRAMMATICAL MEANING, BUT THEN HOWSOEVER LIBERAL OR NARROW BE THE INTERPRETATION OF EXPRESSION 'INCOME' , IT CANNOT ALTER CHARACTER OF A RECEIPT, I.E., CONVERT A CAPITAL REC EIPT INTO A REVENUE RECEIPT OR VICE VERSA. THERE IS NO WARRANT FOR INFERENCE THAT EVEN THE MOST LIBERAL INTERPRETATION OF 'INCOME' CAN NULLIFY OR BLUR THE ALL-IMPORTANT DISTINCTION BETWEEN CAPITAL RECEIPT OR REVENUE RECEIPT. WE MAY, IN THIS REGARD, ALSO ITA NO.6551/MUM/2013(A.Y. 2010-11) 19 REFER TO THE FOLLOWING OBSERVATIONS BY THE HON'BLE JURISDICTIONAL HIGH COURT, IN THE CASE OF CADELL WEAVING MILLS CO. (P) LTD. (S UPRA) : 'IT IS WELL-SETTLED THAT ALL RECEIPTS ARE NOT TAXAB LE UNDER THE IT ACT. SEC. 2(24) DEFINES INCOME. IT IS NO DOUBT AN INCLUSIVE D EFINITION. HOWEVER, A CAPITAL RECEIPT IS NOT INCOME UNDER S. 2(24) UNLESS IT IS CHARGEABLE TO TAX AS CAPITAL GAINS UNDER S. 45. IT IS FOR THIS REASON TH AT UNDER S. 2(24)(VI) THAT THE LEGISLATURE HAS EXPRESSLY STATED, INTER ALIA, T HAT INCOME SHALL INCLUDE ANY CAPITAL GAINS CHARGEABLE UNDER S. 45. UNDER S. 2(24)(VI), THE LEGISLATURE HAS NOT INCLUDED ALL CAPITAL GAINS AS INCOME. IT IS ONLY CAPITAL GAINS CHARGEABLE UNDER S. 45 WHICH HAS BEEN TREATED AS IN COME UNDER S. 2(24). IF THE ARGUMENT OF THE DEPARTMENT IS ACCEPTED THEN ALL CAPITAL GAINS WHETHER CHARGEABLE UNDER S. 45 OR NOT, WOULD COME WITHIN TH E DEFINITION OF THE WORD 'INCOME' UNDER S. 2(24). FURTHER, UNDER S. 2(2 4) (VI), THE LEGISLATURE HAS NOT STOPPED WITH THE WORDS 'ANY CAPITAL GAINS'. ON THE CONTRARY, THE LEGISLATURE HAS ADVISEDLY STATED THAT ONLY CAPITAL GAINS WHICH ARE CHARGEABLE UNDER S. 45 COULD BE TREATED AS INCOME. IN OTHER WORDS, CAPITAL GAINS NOT CHARGEABLE TO TAX UNDER S. 45 FALLS OUTSI DE THE DEFINITION OF THE WORD 'INCOME' IN S. 2(24).' IN THIS VIEW OF THE MATTER, A CAPITAL RECEIPT IS OU TSIDE THE SCOPE OF NORMAL CONNOTATIONS OF EXPRESSION 'INCOME'. AS IS HELD B Y THE HON'BLE JURISDICTIONAL HIGH COURT, ONLY SUCH CAPITAL RECEIP TS CAN BE BROUGHT TO TAX AS ARE CHARGEABLE TO TAX UNDER S. 45. THAT ADMITTED LY IS NOT THE REVENUE'S CASE HERE. (VI) CIT VS. BARIUM CHEMICALS LTD. [1987] 168 ITR 164 (AP) REFERENCE WAS MADE TO THE FOLLOWING OBSERVATIONS. 50. FROM THE FOREGOING DECISIONAL LAW, IT IS REASO NABLY CLEAR THAT IN ORDER TO DECIDE WHETHER OR NOT A PAYMENT IS A REVENUE REC EIPT, ITS TRUE NATURE AND SUBSTANCE MUST BE LOOKED INTO. THE FORM IN WHIC H IT IS EXPRESSED IT NOT DECISIVE. HOW THE ASSESSEE TREATED THE PAYMENT IS N OT CONCLUSIVE OF ITS NATURE. IF THE ASSESS HIMSELF HAS TREATED THE PAYME NT IN HIS ACCOUNT BOOKS AS COMPENSATION OR CONSIDERATION RECEIVED FOR LOSS OF EARNINGS OR PROFITS, IT IS A REVENUE RECEIPT. IF THE PAYMENT IS RECEIVED IN THE ORDINARY COURSE OF THE BUSINESS OF THE ASSESSEE FOR LOSS OF STOCK-IN-T RADE, IT IS A REVENUE RECEIPT. IF, ON THE OTHER HAND, THE PAYMENT RECEIVE D IS TOWARDS COMPENSATION FOR EXTINCTION OR STERILISATION PARTLY OR FULLY OF A PROFIT EARNING SOURCE (CAPITAL ASSET), SUCH RECEIPT NOT BEING IN T HE ORDINARY COURSE OF THE ASSESSEE'S BUSINESS, IT MUST BE CONSTRUED AS A CAPI TAL RECEIPT. NEITHER ON THE FINDINGS OF THE TRIBUNAL, NOR ON AN EXAMINATION OF THE TERMS OF THE SETTLEMENT DATED FEBRUARY 22, 1967, CAN IT BE SAID THAT THE AMOUNT IN QUESTION REPRESENTED LOSS OF PROFITS. THE BUSINESS THE ASSESSEE CARRIED ON ITA NO.6551/MUM/2013(A.Y. 2010-11) 20 WAS IN BARIUM CHEMICALS. THE SETTLEMENT DATED FEBRU ARY 22, 1967, CONCLUDED BETWEEN THE ASSESEE AND THE ENGLISH COMPA NY CANNOT BE TREATED AS ONE IN THE ORDINARY COURSE OF THE BUSINE SS CARRIED ON BY THE ASSESSEE. INSTALLATION OF MACHINERY AND PARTS WAS N OT THE BUSINESS OF THE ASSESEE. IT WAS THE BUSINESS OF THE ENGLISH COMPANY . THERE HAS BEEN A STERILISATION OF CAPITAL ASSETS OF THE ASSESSEE IN THAT THE ENGLISH COMPANY FAILED TO ERECT THE MACHINERY AND PLANT ACCORDING T O THE ORIGINAL STIPULATIONS. IT HAD ABANDONED THE WORK IN THE MIDD LE. THE OPTIMUM CAPACITY OF THE MACHINERY INSTALLED WAS NOT EVEN 30 PER CENT OF THE INSTALLED CAPACITY. THE AMOUNT PAID WAS TOWARDS DAM AGES IN ORDER TO COMPENSATE THE ASSESSEE FOR NOT FULFILLING THE TERM S OF THE CONTRACT. THE STERILISATION OF ASSETS NEED NOT BE IN TO IN ORDER TO MAKE A PAYMENT A CAPITAL RECEIPT (VIDE VAZIR SULTAN AND SONS ; GODRE J & COMPANY [1957] 37 ITR 381 (SC) AND KARAM CHAND THAPAR ). THE PLANT AN D MACHINERY COULD NOT BY ANY STRETCH OF REASONING BE CONSTRUED AS STO CK-IN-TRADE OF THE ASSESSEE. THEY ARE ONLY CAPITAL ASSETS. THE AGREEME NTS BETWEEN THE ASSESSEE AND THE ENGLISH COMPANY WERE NOT TRADING C ONTRACTS FOR GENERATION OF REVENUE PROFITS, BUT THEY WERE ONLY D ESIGNED TO BRING INTO BEING AN APPARATUS FOR AN INCOME YIELDING SOURCE. 51. HAVING REGARD TO ALL THESE CIRCUMSTANCES, THE O NLY CONCLUSION WE REACH ON THIS ASPECT IS THAT THE SUM OF RS. 47,20,939 REC EIVED BY THE ASSESSEE DURING THE ASSESSMENT YEAR 1968-69 FROM M/S MITCHEL L LIMITED CONSTITUTES IN ITS ENTIRETY A CAPITAL RECEIPT AND SO NOT LIABLE TO TAX. AGREEING WITH THE VIEW OF THE TRIBUNAL, WE ANSWER QUESTION NO. 1 RAIS ED BY THE REVENUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 52. THE SECOND QUESTION RAISED BY THE REVENUE IS WH ETHER THE AMOUNT OF RS. 47,20,939 IS EXIGIBLE TO CAPITAL GAINS TAX IN T HE EVENT OF HOLDING THAT THE SAID AMOUNT CONSTITUTES A CAPITAL RECEIPT. THE EXPRESSION 'TRANSFER' DEFINED IN SECTION 2(47) OF THE ACT IS AS FOLLOWS 'TRANSFER', IN RELATION TO A CAPITAL ASSET, INCLUDE S THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASSET OR THE EXTINGUISHMENT O F ANY RIGHTS THEREIN OR THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW.' 53. NONE OF THE INGREDIENTS MENTIONED IN SECTION 2( 47) IS PRESENT IN THE TRANSACTION IN QUESTION. THERE WAS NEITHER SALE NOR EXCHANGE NOR RELINQUISHMENT OF ANY ASSET OR EXTINGUISHMENT NOF A NY RIGHTS IN RESPECT OF THE AMOUNT OF RS. 47,20,939 RECEIVED BY THE ASSESSE E FROM THE ENGLISH COMPANY. THAT AMOUNT WAS PAID BY THE ENGLISH COMPAN Y AS DAMAGES FOR THEIR FAILURE TO FULFILL THEIR OBLIGATIONS UNDER TH E AGREEMENTS CONCLUDED WITH THE ASSESSEE. UNLESS THE TRANSACTION FALLS WITHIN A NY OF THE CATEGORIES SPECIFIED IN THE AFORESAID DEFINITION CLAUSE, THE A MOUNT CANNOT BE BROUGHT TO TAX UNDER SECTION 45 OF THE INCOME-TAX ACT AS CA PITAL GAINS. AS THERE WAS NO TRANSFER OF ANY CAPITAL ASSET AS ENVISAGED U NDER SECTION 45, ITA NO.6551/MUM/2013(A.Y. 2010-11) 21 AGREEING WITH THE VIEW TAKEN BY THE TRIBUNAL, WE AN SWER THE QUESTION IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 5.2 RELYING UPON THE AFOREMENTIONED DECISIONS AND C ONTENTIONS RAISED BEFORE LD. CIT(A), IT IS THE CASE OF LD.AR THAT LD. CIT(A) DID NOT COMMIT ANY ERROR IN GRANTING THE IMPUGNED RELIEF TO THE ASSESSEE AND HI S ORDER SHOULD BE UPHELD. 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE BEEN CAREFULLY CONSIDERED. WE HAVE ALSO CAREFULLY GONE THROUGH THE ORDER PASSED BY THE AO AND CIT(A). FACTS AS MENTIONED IN THE ABOVE PART OF THIS ORDER ARE EXPLAINED IN THE ORDER PASSED BY AO AND CIT(A). NO DISPUTE HAS B EEN RAISED BY EITHER PARTY TO SAY THAT THERE IS DIFFERENCE IN THE FACTS AS EXI STED AND AS NARRATED IN THESE ORDER. ON THE ABOVE FACTS, THE QUESTIONS WHICH IS T O BE DECIDED IN THE PRESENT APPEAL IS ABOUT THE ASSESSIBILITY OR OTHERWISE OF T HE IMPUGNED AMOUNT AS INCOME OF THE ASSESSEE . 6.1 ACCORDING TO THE FACTS OF THE CASE, THE ASSESS EE, BEING OWNER OF THE PLOT (E), ENJOY THE RIGHT OF NEGATIVE COVENANT ENTERED I NTO BETWEEN THE ASSESSEE SOCIETY AND OWNER OF PLOT (A) AMONGST OTHERS. SU CH RIGHT IS ENJOYED BY THE ASSESSEE BY VIRTUE OF BEING SUCCESSOR OF ERSTWHILE OWNER OF PLOT (E) AND IN THE SIMILAR MANNER OWNER OF PLOT (A) BEING SUCCESSOR OF ERSTWHILE OWNER OF PLOT (A) IS BOUND BY THE TERMS OF PARTITION DEED ENTERED INTO A MONGST THE ERSTWHILE OWNERS OF LARGER PROPERTY COMPRISING OF PLOT (E) AN D (A). ACCORDING TO RIGHT OF NEGATIVE COVENANT ASSESSEE BEING OWNER OF PLOT (E) HAS RIGHT TO RESTRAIN THE OWNER OF PLOT (A) FROM RAISING HEIGHT OF BUILDING FROM THE EXISTING STRUCTURE OF BUILDING SITUATED ON THE SAME PLOT SO THAT RIGHT OF THE ASSESSEE TO HAVE BETTER VIEW OF SEA IS NOT OBSTRUCTED. 6.2 THE ABOVE RIGHT OF THE ASSESSEE HAS BEEN RECO GNIZED AS EXISTING EVEN BY THE COURT OF LAW AND TO THAT EXTENT THERE IS NO DIS PUTE. THE DISPUTE WHICH PREVAILED IN THE LITIGATION INITIATED BY THE ASSESS EE RESTS UPON THE CONCLUSION ITA NO.6551/MUM/2013(A.Y. 2010-11) 22 THAT ACCORDING TO THE ASSESSEE THE HEIGHT OF THE ER STWHILE BUILDING SITUATED AT PLOT NO.(A) WAS 22 FT. AGAINST THE CONTRARY CLAIM O F THE DEVELOPER AND OWNER OF THE PLOT NO.(A) THAT THE HEIGHT EARLIER WAS 26.81 FT. 6.3 THERE WERE SEVERAL ROUNDS OF LITIGATION, THE HI STORY OF WHICH HAS BEEN MENTIONED IN THE EARLIER PART OF THIS ORDER. ULTIMA TELY IN THE CIVIL COURT VIDE ORDER DATED 31/10/2009 HAS HELD THAT ASSESSEE C OULD NOT PROVE WITH THE HELP OF EVIDENCE THAT THERE WAS VIOLATION OF NEGATI VE COVENANT. IT IS FOR THAT REASON THE SUIT OF THE ASSESSEE WAS DISMISSED. 6.4 NOT SATISFIED WITH THE ABOVE ORDER ASSESSEE HAD FILED AN APPEAL IN THE HIGH COURT. DURING THE PENDENCY OF THE ABOVE APPEAL THE CONSENT TERMS HAVE BEEN ARRIVED AT BETWEEN ASSESSEE AND OWNER OF PL OT (A) AND IMPUGNED COMPENSATION IS RECEIVED BY THE ASSESSEE WHICH HAS BEEN CLAIMED AS EXEMPTED FROM LEVY OF TAXES ON THE GROUND THAT THE SAID RECE IPT IS CAPITAL IN NATURE. THE DEPARTMENT DID NOT ACCEPT SUCH CLAIM OF THE ASSESSE E AND FOR THE REASON DISCUSSED ABOVE AO HAS BROUGHT THE SAID AMOUNT TO T AX BY HOLDING THAT THE IMPUGNED AMOUNT IS REVENUE RECEIPT AND ASSESSABLE AS INCOME FROM OTHER SOURCES. LD. CIT(A) FOR THE REASONS DISCUSSED ABOV E HAS HELD THAT THE SAID RECEIPT COULD NOT BE ASSESSED TO TAX BEING AMOUNT R ECEIVED ON ACCOUNT OF RIGHT TO SUE WHICH CANNOT BE HELD TO BE OF PROPERTY IN NATURE AND FOR HOLDING SO RELIANCE HAS BEEN PLACED MAINLY ON THE DECISION IN THE CASE OF CIT VS. ABHASBHOY A. DEHGAMWAL(SUPRA) ITA NO.6551/MUM/2013(A.Y. 2010-11) 23 6.5 ON THE ABOVE FACTS, TO DECIDE THE ISSUE IN PRES ENT APPEAL, WE ARE OF THE OPINION THAT IT WILL BE RELEVANT TO FIRST DETERM INE THE CHARACTER OF THE RECEIPT THAT , WHETHER THE SAME IS CAPITAL OR REVENUE . TO DETERMINE THIS ISSUE, IT WILL BE RELEVANT TO MENTION THAT RIGHT FROM THE BEGINNIN G IT HAS BEEN THE CONTENTION OF THE ASSESSEE THAT NEGATIVE COVENANT DID NOT CREA TE RIGHT OF THE ASSESSEE OVER THE PROPERTY OF THE OWNER OF PLOT (A) AS THE RIGHT ENJOYED BY THE ASSESSEE WAS LIMITED TO PUT A RESTRAIN OVER THE OWNER OF PLO T (A) FOR NOT RAISING THE HEIGHT OF THE BUILDING FROM THE OLD STRUCTURE AS IT EXISTE D PRIOR TO NEW CONSTRUCTION. IT IS NOT THE CASE OF THE REVENUE THAT SUCH CONTENTION OF THE ASSESSEE IS NOT CORRECT. THUS, THE RIGHT OF THE ASSESSEE IS LIMITED TO RESTRAINING THE OWNER OF PLOT (A) FOR NOT RAISING THE HEIGHT OF THE BUILDIN G. IN CASE OWNER OF PLOT (A) RAISES THE HEIGHT OF ITS BUILDING ABOVE THE HEIGHT OF OLD STRUCTURE THEN THE REMEDY AVAILABLE TO THE ASSESSEE IS TO FILE A SUIT FOR SPECIFIC PERFORMANCE AS PER THE TERM OF NEGATIVE COVENANT. 6.6 ACCORDING TO THE FACTS OF THE CASE ASSESSEE HAD FILED SUIT RESTRAINING THE OWNER OF PLOT (A) TO RAISE THE HEIGHT OF BUILDING F ROM A SPECIFIC LEVEL. AFTER LONG PERIOD OF DISPUTE CIVIL COURT DECIDED THE ISSUE AGA INST THE ASSESSEE WHEN ASSESSEE LOST ITS RIGHT FOR SPECIFIC PERFORMANCE A ND IT WAS HELD THAT ASSESSEE COULD NOT PROVE THAT THE HEIGHT OF THE BUILDING CON STRUCTED ON PLOT (A) WAS IN FACT HIGHER THAN THE OLD STRUCTURE EXISTING ON THE SAID PLOT. IT IS ONLY DURING THE COURSE OF APPEAL PENDING BEFORE HONBLE HIGH CO URT CONSENT TERMS HAVE BEEN ARRIVED AT WHICH IS IN LIEU OF ENDING THE DIS PUTE BETWEEN ASSESSEE AND OWNER OF PLOT (A) AS PER CONSENT TERMS. THE RIGHT OF THE ASSESSEE OF NEGATIVE COVENANT IS STILL SUBSISTING AND HAS NOT BEEN FOREG ONE BY THE ASSESSEE. THUS THE COMPENSATION RECEIVED BY THE ASSESSEE IS NOT F OR TRANSFER OF ANY PROPERTY, THEREFORE, THE RECEIPT OF THE ASSESSEE CANNOT BE RE GARDED AS REVENUE RECEIPT BUT IT WOULD BE CAPITAL IN NATURE. WHILE HOLDING THAT THE RECEIPT BY THE ASSESSEE IS IN THE NATURE OF REVENUE THE AO HAS RELIED UPON T HE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KARAMCHAND THAPAR & BR OS. (SUPRA) AND IN ITA NO.6551/MUM/2013(A.Y. 2010-11) 24 PARA 4.3.8 OF THE ASSESSMENT ORDER LD. AO HAS O BSERVED THAT INFRINGEMENT OF NEGATIVE COVENANT IS NOT THE LOSS OF SOURCE OF INC OME, THEREFORE, IMPUGNED RECEIPT CANNOT BE TREATED AS CAPITAL RECEIPT AS IT HAS BEEN HELD BY HONBLE SUPREME COURT IN THE CASE OF KARAMCHAND THAPAR & BR OS.(SUPRA) THAT IF THERE IS A DESTRUCTION OF SOURCE OF INCOME WHILE TERMINAT ING A CONTRACT, THEN THE AMOUNT RECEIVED ON SUCH TERMINATION IS CAPITAL RECE IPT, BUT IF THERE IS NO DESTRUCTION OF THE SOURCE OF INCOME, THEN SUCH RECE IPT IS A REVENUE RECEIPT. IN OUR CONSIDERED OPINION THE RELIANCE PLACED BY THE A O ON THE SAID DECISION IS MISPLACED AS WHAT HAS BEEN LAID DOWN BY THE HONBLE SUPREME COURT IN THE SAID CASE RELATES TO DESTRUCTION OF SOURCE OF INC OME. BUT IN THE PRESENT CASE NEGATIVE COVENANT CANNOT BE HELD TO BE A SOURCE OF INCOME FOR THE ASSESSEE AS IT DOES NOT PROVIDE ANY INCOME TO THE ASSESSEE BUT ASS ESSEE IS ONLY ENJOYING THE RIGHT OF UNRESTRICTIVE SEA VIEW. IN THE SAID CASE THE QUESTION WAS REGARDING TERMINATION OF ONE OF THE MANAGING AGENCIES WHICH WAS A SOURCE OF INCOME TO THE ASSESSEE. IT IS ONLY WHEN THERE IS NO DESTRUC TION OF SOURCE OF INCOME, THEN THE RECEIPT CAN BE CONSIDERED TO BE A REVENUE RECEI PT. THEREFORE, RELYING UPON THE SAID DECISION IT WILL BE INCORRECT TO HOLD THA T BECAUSE THERE IS NO DESTRUCTION OF SOURCE OF INCOME THE RECEIPT IS REVE NUE RECEIPT AS THE RIGHT OF NEGATIVE COVENANT CANNOT BE SAID TO BE SOURCE OF IN COME TO THE ASSESSEE. 6.7 IT IS ALSO THE CASE OF THE AO THAT COMPENSATIO N RECEIVED BY THE ASSESSEE IS FOR THE EXPLOITATION OF CAPITAL ASSET, THEREFOR E, REVENUE IN NATURE AND THUS, FALL WITHIN THE AMBIT OF SECTION 2(24) OF THE ACT, THE SCOPE OF WHICH IS WIDE. IT HAS ALREADY BEEN HELD THAT THE NATURE OF RECEIPT, F ROM ITS CHARACTERISTICS CANNOT BE DESCRIBED AS REVENUE RECEIPT. THEREFORE, IT HAS TO BE EXAMINED THAT WHETHER DESPITE THE IMPUGNED RECEIPT NOT BEING IN THE NATU RE OF REVENUE CAN STILL FALL WITHIN THE CATEGORY OF INCOME AS DEFINED IN SECTION 2(24) OF THE ACT. IN THIS RESPECT REFERENCE CAN BE MADE TO THE DECISION OF H ONBLE BOMBAY HIGH COURT IN THE CASE OF MEHABOOD PRODUCTIONS LTD. VS. CIT(SU PRA). THEIR LORDSHIPS OF HONBLE BOMBAY HIGH COURT AFTER EXAMINING SEVERAL JUDICIAL PRONOUCEMENTS HAVE OBSERVED AS UNDER: ITA NO.6551/MUM/2013(A.Y. 2010-11) 25 THUS, IT IS CLEAR THAT ALL RECEIPTS BY THE ASSESS EE WOULD NOT NECESSARILY BE DEEMED TO BE INCOME OF THE ASSESSEE AND THE QUESTIO N AS TO WHETHER ANY PARTICULAR RECEIPT IS INCOME OR NOT WILL HAVE TO BE DETERMINED DEPENDING UPON THE NATURE OF THE RECEIPTS AND THE TRUE SCOPE AND EFFEC T OF THE RELEVANT TAXING PROVISION. 6.8 IN THIS REGARD REFERENCE ALSO CAN BE MADE TO T HE DECISIONS OF CO-ORDINATE BENCH IN THE CASE OF NIYATI B. YODH VS. ACIT (SUPR A), WHICH WAS REFERRED BY THE LD. AR AND RELEVANT PORTION HAS ALREADY BEEN REPR ODUCED IN THE ABOVE PART OF THIS ORDER IN PARA 5.1. AFTER EXAMINING THE DEFINIT ION OF INCOME AND REFERRING TO THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF PADMARAJ R. KADAMBANDE VS. CIT (SUPRA) IT IS HELD THAT IT IS A SETTLED LAW, THAT A CAPITAL RECEIPT, IN PRINCIPLE, IS OUTSIDE THE SCOPE OF INC OME CHARGEABLE TO TAX AND A RECEIPT CANNOT BE TAXED AS INCOME UNLESS IT IS IN T HE NATURE OF REVENUE RECEIPT OR IS SPECIFICALLY BROUGHT WITHIN THE AMBIT OF IN COME BY WAY OF SPECIFIC PROVISIONS OF THE I.T. ACT. FROM THE ABOVE IT IS C LEAR THAT EVEN IF THE RECEIPT IS IN THE CAPITAL NATURE, THEN ALSO EACH AND EVERY CAPITA L RECEIPT CANNOT BE BROUGHT TO TAX UNLESS IT IS SPECIFICALLY BROUGHT WITHIN THE DEFINITION OF INCOME GIVEN IN SECTION 2(24) OF THE ACT AND THIS DECISION HAS ALSO BEEN APPLIED IN THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CADDEL WEAVING COMPANY LTD. VS. CIT(SUPRA) AND THE RELEVANT OBSERVATIONS OF THEIR L ORDSHIPS FROM THE SAID DECISION READ AS UNDER: IT IS WELL SETTLED THAT ALL RECEIPTS ARE NOT TAXAB LE UNDER THE IT ACT. SEC. 2(24) DEFINES INCOME. IT IS NO DOUBT AN INCLUSIVE DEFINI TION. HOWEVER, A CAPITAL RECEIPT IS NOT INCOME UNDER S. 2(24) UNLESS IT IS CHARGEABL E TO TAX AS CAPITAL GAINS UNDER S. 45. IT IS FOR THIS REASON THAT UNDER S. 2(24)(V I) THAT THE LEGISLATURE HAS EXPRESSLY STATED, INTER ALIA, THAT INCOME SHALL INCLUDE ANY C APITAL GAINS CHARGEABLE UNDER S. 45. UNDER S. 2(24)(VI), THE LEGISLATURE HAS NOT IN CLUDED ALL CAPITAL GAINS AS INCOME. IT IS ONLY CAPITAL GAINS CHARGEABLE UNDER S. 45 WHICH HAS BEEN TREATED AS INCOME UNDER S. 2(24). IF THE ARGUMENT OF THE DEP ARTMENT IS ACCEPTED THEN ALL CAPITAL GAINS WHETHER CHARGEABLE UNDER S. 45 OR NOT , WOULD COME WITHIN THE DEFINITION OF THE WORD INCOME UNDER S. 2(24). FU RTHER, UNDER S. 2(24)(VI), THE LEGISLATURE HAS NOT STOPPED WITH THE WORDS ANY CA PITAL GAINS. ON THE CONTRARY, THE LEGISLATURE HAS ADVISEDLY STATED THAT ONLY CAPI TAL GAINS WHICH ARE CHARGEABLE TO TAX UNDER S.45 FALLS OUTSIDE THE DEFINITION OF T HE WORD INCOME IN S. 2(24). IT IS TRUE THAT S. 2(24) IS AN INCLUSIVE DEFINITION. HOW EVER, IN THIS CASE, WE ARE REQUIRED TO ASCERTAIN THE SCOPE OF S.2(24)(VI) AND FOR THAT PURPOSE WE HAVE TO READ THE SUB- SECTION STRICTLY. WE CANNOT WIDEN THE SCOPE OF SUB -SECTION BY SAYING THAT THE DEFINITION AS A WHOLE IS INCLUSIVE AND NOT EXHAUST IVE. IN THE PRESENT CASE, THE ITA NO.6551/MUM/2013(A.Y. 2010-11) 26 WORDS CHARGEABLE UNDER S. 45ARE VERY IMPORTANT. THEY ARE NOT BEING READ BY THE DEPARTMENT. THESE WORDS CANNOT BE OMITTED. IN FACT, THE PRIOR HISTORY SHOWS THAT CAPITAL GAINS WERE NOT CHARGEABLE BEFORE 1946. THEY WERE NOT CHARGEABLE BETWEEN 1948 AND 1956. THEREFORE, WHENEVER AN AMOU NT WHICH IS OTHERWISE A CAPITAL RECEIPT IS TO BE CHARGED TO TAX, S.2(24) S PECIFICALLY SO PROVIDES. 6.9 THUS, FROM THE ABOVE DECISION IT IS VERY CLEAR THAT EVEN ALL CAPITAL RECEIPT WOULD NOT BE CHARGEABLE UNDER THE ACT UNLES S THE SAME IS CHARGEABLE TO TAX AS CAPITAL GAIN IN SECTION 45 OF THE ACT. TH EREFORE, IT IS NECESSARY TO EXAMINE THAT WHETHER EVEN IF THE IMPUGNED RECEIPT I S NOT REVENUE IN NATURE AND IT IS CAPITAL IN NATURE THEN ALSO CAN IT BE CHA RGEABLE TO TAX UNDER INCOME TAX ACT UNDER THE HEAD CAPITAL GAIN. ACCORDING T O DEPARTMENT, THE ASSESSEE BY WAY OF NEGATIVE COVENANT HAS ACQUIRED THE RIGHT OF SPECIFIC PERFORMANCE WHICH FALLS WITHIN THE AMBIT OF CAPITAL ASSET. ACC ORDING TO FACTS OF THE CASE THE ASSESSEE HAS RIGHT FOR SPECIFIC PERFORMANCE BUT THE SAME CAME TO AN END BY THE CIVIL COURT BY WHICH THE SUIT FILED BY THE ASSESSE E WAS DISMISSED ON 31/10/2009, WHEN THE RIGHT OF SPECIFIC PERFORMANCE WAS DENIED TO THE ASSESSEE ON THE GROUND THAT ASSESSEE COULD NOT PROVE WITH T HE HELP OF EVIDENCE THAT THERE WAS VIOLATION OF NEGATIVE COVENANT AND THEREA FTER THE RIGHT OF THE ASSESSEE WAS LIMITED ONLY JUST TO FILE FURTHER APPEAL WHICH WAS FILED BY THE ASSESSEE AND THAT IS IN RESPECT OF THE RIGHT OF THE ASSESSEE TO SUE. AS PER DECISION OF HONBLE BOMBAY HIGH COURT ABBASBHOY A. DEHGAMWALLA & ORS(SU PRA), RIGHT TO SUE IS NOT AN ACTIONABLE CLAIM, THEREFORE, DAMAGES RECEIVE D ON CONSENT DECREE WOULD NOT AMOUNT TO CONSIDERATION FOR TRANSFER OF CAPITAL ASSET. THE ASSESSEE ALSO DID NOT DEPART FROM ITS RIGHT TO OBJECT THE OWNER O F PLOT(A) FROM RAISING HEIGHT OF NEW CONSTRUCTION FROM THE HEIGHT OF THE OLD STRUCT URE AND SUCH RIGHT IS BEING ENJOYED BY THE ASSESSEE EVEN AFTER RECEIPT OF THE D AMAGES. THUS, IN THE PRESENT CASE, EVEN IF THE RECEIPT IS CAPITAL IN NATURE BUT IT CANNOT BE BROUGHT TO TAX IN ABSENCE OF ELEMENT OF TRANSFER. THEREFORE, THE IMPUGNED RECEIPT CANNOT BE EVEN TAXED UNDER THE HEAD CAPITAL GAIN. 6.10 IT IS ALSO THE CASE OF THE AO THAT SINCE ASSES SEE HAS EXPLOITED THE CAPITAL ASSET, THEREFORE, IT HAS EARNED A SUM OF RS.10.54 CRORES WHICH IS LIABLE TO BE ITA NO.6551/MUM/2013(A.Y. 2010-11) 27 ASSESSED AS INCOME FROM OTHER SOURCES. FOR THIS PU RPOSE RELIANCE WAS PLACED BY THE AR ON THE DECISION OF HONBLE BOMBAY HIGH CO URT IN THE CASE OF CADDLE WEAVING COMPANY LTD. (SUPRA), IN WHICH REFERRING TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNITED COMMERCIAL BANK LTD. VS. CIT, 32 ITR 688, IT WAS OBSERVED THAT INCOME WHICH FALLS UNDE R ONE SPECIFIC HEAD CANNOT BE BROUGHT TO TAX UNDER ANY OTHER HEAD. IF, FOR AN Y REASON, THE COMPUTATION MACHINERY FAILS, IT IS NOT OPEN TO THE DEPARTMENT T O APPLY THE RESIDUARY CLAUSE. 6.11 THUS, ACCORDING TO THE AFOREMENTIONED RATIO IF THE INCOME FALLS UNDER ONE SPECIFIC HEAD, THE SAME CANNOT BE BROUGHT TO TAX UN DER ANY OTHER HEAD PARTICULARLY WHERE COMPUTATION MACHINERY FAILS IN R ESPECT OF THE HEAD WHICH IS APPLICABLE. ACCORDING TO THE FACTS OF THE PRESENT CASE THE NATURE OF RECEIPT ITSELF IS NOT THE REVENUE AND IS NOT FALLING WITHIN THE DEFINITION OF INCOME, THEREFORE, CANNOT BE ASSESSED AS INCOME FRM OTHER SOURCES DESPITE IT MAY BE CLASSIFIED AS CAPITAL RECEIPT. THEREFORE, UNDER TH E FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED RECEIPT CANNOT BE ASSESSE D AS INCOME FROM OTHER SOURCES. THE RELEVANT OBSERVATION OF THEIR LORDSH IPS FROM THE DECISION OF CADDLE WEAVING COMPANY LTD. VS. CIT (SUPRA) ARE RE PRODUCED BELOW: IT IS ESSENTIAL ALSO TO BEAR IN MIND THAT INCOME W HICH FALLS UNDER ONE SPECIFIED HEAD COULD NOT BE BROUGHT TO TAX UNDER ANY OTHER HE AD. IN THE PRESENT MATTER, THE DEPARTMENT DID APPLY S.45. THEY DID APPLY THE HEAD VIZ. CAPITAL GAINS. HOWEVER, WHEN IT CAME TO COMPUTATION, THE DEPARTMEN T FOUND THAT COST OF ACQUISITION CANNOT BE COMPUTED. HENCE, IT IS NOW S OUGHT TO BE ARGUED THAT SUCH CAPITAL GAINS WOULD CONSTITUTE INCOME FROM OTHER S OURCES UNDER S. 56. IN THE CASE OF UNITED COMMERCIAL BANK VS. CIT (1957) 32 I TR 688(SC): TC 13R 1016, IT HAS BEEN HELD THAT INCOME WHICH FALLS UNDER ONE SPE CIFIC HEAD COULD NOT BE BROUGHT TO TAX UNDER ANY OTHER HEAD. IF FOR ANY RE ASON, THE COMPUTATION MACHINERY FAILS, IT IS NOT OPEN TO THE DEPARTMENT T O APPLY THE RESIDUARY CLAUSE. 6.12 NOW FOR THE SAKE OF COMPLETENESS WE MAY DIS CUSS THE DECISION RELIED UPON BY AO AND BY LD. CIT-DR. (I) CIT VS. TATA SERVICES LTD., 122 ITR 594(BOM) (W RONGLY MENTIONED IN ASSESSMENT ORDER IN PARA4.3.9 AS CIT VS. TATA SONS LTD.). IN THE SAID CASE IT WAS HELD BY HONBLE HIGH COURT THAT IN LIEU OF RIGH T TO OBTAIN A CONVEYANCE THE ITA NO.6551/MUM/2013(A.Y. 2010-11) 28 RECEIPT OF RS.5.00 LACS WHICH FALLS WITHIN THE DEF INITION OF TERM PROPERTY USED IN SECTION 2(14) OF THE ACT AND THUS WAS A CAPITAL ASSET. THUS, IN THAT CASE THE RIGHT TO OBTAIN CONVEYANCE WAS ASSIGNED BY THE ASSE SSEE IN FAVOUR OF THIRD PARTY IN LIEU OF WHICH A CONSIDERATION WAS RECEIVED . THE FACTS OF THAT CASE ARE TOTALLY DIFFERENT FROM THE FACTS OF THE PRESENT C ASE. IN THE PRESENT CASE ASSESSEE DID NOT RECEIVE ANY PAYMENT IN LIEU OF TRA NSFER OF CAPITAL ASSET AS THERE WAS NO TRANSFER AS SUCH. (II) KARAMCHAND THAPPAR & BROS. PVT. LTD. VS. CIT ( SUPRA)- THE FACTS OF THIS CASE HAVE ALREADY BEEN DISTINGUISHED IN THE ABOVE P ART OF THIS ORDER IN PARA NO.6.6. (III) BHAGWAN DAS JAIN VS. UNION OF INDIA (SUPRA) IN THE SAID CASE IT HAS BEEN HELD BY HONBLE SUPREME COURT THAT THE WORD INCO ME EVEN IN ITS ORDINARY ECONOMIC SENSE INCLUDES NOT MERELY WHAT IS RECEIVED OR WHAT COMES IN BY EXPLOITING THE USE OF A PROPERTY BUT ALSO WHAT ON E SAVES BY USING IT ONESELF. IT HAS ALREADY BEEN DISCUSSED THAT THE AMOUNT RECEIVED BY THE ASSESSEE IS NOT IN CONSIDERATION OF EXPLOITING THE USE OF PROPERTY AS THE RIGHT OF NEGATIVE COVENANT WAS NOT EXPLOITED BY THE ASSESSEE TO RECEIVE THE IM PUGNED AMOUNT. THEREFORE, THIS CASE IS ALSO DISTINGUISHABLE. (IV) MALABAR INDUSTRIAL COMPANY LTD (SUPRA) IN TH E SAID CASE THE AMOUNT INVOLVED WAS FOR EXTENSION OF TIME FOR PAYMENT OF S ALE CONSIDERATION OF RUBBER PLANTATION WHICH CLAIMED AN AGRICULTURAL INCOME. THE TRIBUNAL FOUND THAT ASSESSEE HAD STOPPED AGRICULTURAL OPERATION AND REC EIPT DID NOT RELATE TO ANY AGRICULTURAL OPERATION AND ON THESE FACTS IT WAS H ELD THAT INCOME WAS RIGHTLY TAXED AS INCOME FROM OTHER SOURCES. THE FACTS OF T HE SAID CASE DO NOT MATCH WITH THE FACTS OF THE PRESENT CASE AS THE IMPUGNED AMOUNT DOES NOT RELATE TO SALE CONSIDERATION OF ANY CAPITAL ASSET AND IT IS ONLY COMPENSATION RECEIVED AS DAMAGES. ITA NO.6551/MUM/2013(A.Y. 2010-11) 29 (V) CIT VS. BOKARO STEEL LTD. (SUPRA)- THE FACTS OF THE SAID CASE ARE ALSO TOTALLY DIFFERENT AS THE ASSESSEE COMPANY IN THAT CASE WAS SET UP TO CONSTRUCT AND OWN IRON & STEEL WORKS. DURING THE YEAR WHILE CON STRUCTION OF THE FACTORY WAS IN PROGRESS AND BUSINESS WAS NOT STARTED, THE ASSES SEE RECEIVED CERTAIN AMOUNT BY WAY OF RENT FROM PROPERTY LET OUT TO CONT RACTORS, EMPLOYEES ETC. THE AO TAXED THOSE AMOUNT UNDER SECTION 22 AND OTH ER RECEIPTS AS INCOME FROM OTHER SOURCES. THEREFORE, THIS DECISION IS ALSO NOT RELEVANT TO DECIDE THE PRESENT APPEAL AND, THEREFORE, INAPPLICABLE. (VI) VINOD V. CHHAPIA (SUPRA) IN THE SAID CASE AS SESSEE WAS LAND LORD AND OLD TENANT OF THE ASSESSEE TRANSFERRED TENANCY RIGH T IN FAVOUR OF NEW TENANT AND FOR THAT CONSIDERATION WAS GIVEN TO ASSESSEE AS WELL AS TO OLD TENANT. THE RECEIPT BY THE ASSESSEE WAS CONSIDERED AS INCOME FR OM OTHER SOURCES. THIS DECISION ALSO WOULD NOT BE APPLICABLE TO THE FACTS OF THE PRESENT CASE, AS IN THE SAID CASE THE ASSESSEE WAS OWNER OF THE PROPERTY A ND RECEIVED CONSIDERATION FOR USER OF THIS PROPERTY BY THE TENANT. IN THE PR ESENT CASE THE PROPERTY DID NOT BELONG TO ASSESSEE BUT ONLY IT WAS RECEIVED BY THE ASSESSEE AS DAMAGES IN LIEU OF ITS RIGHTS OF NEGATIVE COVENANT. 7. IN VIEW OF THE ABOVE DISCUSSIONS, WE ARE OF THE OPINION THAT LD. CIT(A) DID NOT COMMIT ANY ERROR IN GRANTING THE RELIEF TO THE ASSESSEE AND WE DECLINE TO INTERFERE IN THE ORDER PASSED BY LD. CIT(A). T HE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 /04/2015 22/04/2015 SD/- SD/- ( /RAJENDRA ) ( . . / I.P. BANSAL ) /ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; $% DATED 22/04/2015 ITA NO.6551/MUM/2013(A.Y. 2010-11) 30 / COPY OF THE ORDER FORWARDED TO : 1. & '( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. +, ( & ) / THE CIT(A)- 4. +, / CIT 5. -. ),%/0 , &1 &/0 , / DR, ITAT, MUMBAI 6. 2 / GUARD FILE. / BY ORDER, * -, ), //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . % . ./ VM , SR. PS