“relinquishment of right”

Capital GainsSection 2(47)Section 2(47)77 judgments

The decision most relied on for relinquishment of right is CIT v. Tata Services Ltd. (122 ITR 594), cited in 76 judgments on BharatTax.

Leading authorities on relinquishment of right

CIT v. Tata Services Ltd.

122 ITR 594 · 1980 · High Court

citing judgments

A right to purchase property under an agreement to sell is a capital asset as defined under Section 2(14) of the Income-tax Act. The relinquishment or extinguishment of such a right constitutes a transfer of a capital asset, the consideration for which is taxable as capital gains.

Champion Engineering Works Ltd. v. CIT (1971) 81 ITR 273 (Bom), CIT v. Bowrisankara Stemp Ferry Co.

165 ITR 63 · 1987 · High Court

citing judgments

The case is cited for the principle that when a payment is made for a non-compete agreement which is part of a larger business transfer, the characterisation of the payment depends on whether it is for the enduring benefit of the business or for the loss of potential profits.

CIT v. Grace Collis

248 ITR 323 · 2001 · Supreme Court

citing judgments

The term 'transfer' under Section 2(47) includes the relinquishment of a right to property that creates an interest in the property. However, the extinguishment of rights in shares, when occurring without a formal conveyance, does not attract capital gains.

Alembic Chemical Works (supra), Commissioner of Income Tax v. Madras Auto Services (supra) and CIT vs. HMT Limited

203 ITR 820 · 1993 · High Court

citing judgments

Expenditure incurred for the elimination of business competition, such as non-compete fees, is classified as either revenue or capital expenditure based on whether it creates an enduring benefit for the assessee's business.

Oberoi Hotel Private Limited v. Commissioner of Income Tax

236 ITR 903 · 1999 · Supreme Court

citing judgments

Compensation received for the loss of a capital asset or the loss of a source of income is classified as a capital receipt and is not liable to income tax.

CIT v. Vijay Flexible Containers

186 ITR 693 · 1990 · High Court

citing judgments

Income received from relinquishment of a right in property, such as compensation received due to breach of an agreement to purchase immovable property, is taxable as capital gains. The right acquired under a sale agreement is considered a right to property, not merely a right to sue.

Blaze & Central (P.) Ltd. v. Commissioner of Income-tax

120 ITR 33 · 1979 · High Court

citing judgments

Payments made to ward off business rivalry or acquire an existing business are capital in nature. This is especially true if the benefit obtained is for a specified period and involves the acquisition of business in a specified area.

Anarkali Sarabhai v. CIT

224 ITR 422 · 1997 · Supreme Court

citing judgments

Redemption of preference shares by a company constitutes a 'transfer' under Section 2(47) of the Income Tax Act, making it subject to capital gains tax under Section 45 for the shareholder.

Judgments citing relinquishment of right

Sh. Prem Singh Raja, Chamba vs. Pr. C.I.T. -1, Chandigarh

In the result, both the above appeals filed by the assessee are allowed

ITA 359/CHANDI/2022[2017-18]Status: DisposedITAT Chandigarh04 Jun 2025AY 2017-18

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. MANOJ KUMAR AGGARWAL (Accountant Member)

For Appellant: Shri Ajay Jain, CA and Shri Lovesh Bansal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR (Virtual Mode)

Section 263

Hemali Resorts Pvt. Ltd., which had acquired enforceable rights under the agreements. These payments were made in lieu of site development services and relinquishment of rights and were not received or receivable by the assessee. 3.3 The AR relied on the judgment in Sanjeev

Mr. Anil Bherumal Kalal, Mumbai vs. ITO -19(2)(1), Mumbai

In the result, substantial ground of appeal raised by assessee is allowed

ITA 1189/MUM/2025[2006-07]Status: DisposedITAT Mumbai21 Apr 2025AY 2006-07

Bench: Shri Pawan Singh(Physical Hearing) Mr. Anil Bherumal Kalal Ito – 19(2)(1), Mumbai A-602, Pooja Enclave, S T Braz Road, Kautilya Bhavan, Bkc, Vs. Behind Nanavati Hospital, Vile Parle Bandra (East), Mumbai – West, Mumbai-400056. 400051. Pan: Aabpk 3216 B (Appellant) (Respondent) Assessee By : Shri Subhash Chhajed, Ar Revenue By : Ms. Pradnya Gholap, Sr. Dr Date Of Hearing : 16.04.2025 Date Of Pronouncement : 16.04.2025 Order Under Section 254(1) Of Income Tax Act Per Pawan Singh: 1. This Appeal By Assessee Is Directed Against The Order Of Ld. Cit(A) Dated 30.12.2024 For A.Y. 2006-07. The Assessee Has Raised The Following Grounds Of Appeal: “Validity Of The Notice Under Section 143(2) Of The Act & The Assessment Thereunder: 1.A) On The Facts & In The Circumstances Of The Case & In Law, The Learned Commissioner Of Income Tax (Appeals) [Cit (A)] Erred In Upholding The Assessment For The Assessment Year 2006-07 Framed By The Learned Assessing Officer Without Complying With The Relevant Provisions Of The Law. B) It Is Respectfully Submitted That No Notice Under Section 143(2) Of The Act Was Served On The Appellant Within The Time Limits Prescribed Under Section 143(2) Of The Act. Accordingly, The Learned Assessing Officer Had No Jurisdiction To Proceed With Scrutiny Assessment Under Section 143(3) Of The Act. Thus, The Assessment Is Bad In Law & Deserves To Be Quashed & Struck Down As Null & Void. In View Of The Above, The Appellant Prays That The Assessment Be Set Aside As Bad In Law & Struck Down As Null & Void.

For Appellant: Shri Subhash Chhajed, ARFor Respondent: Ms. Pradnya Gholap, Sr. DR

Section 143(2)Section 143(3)Section 144Section 254(1)Section 54FSection 69

Corporation (builder) and the builder paid Rs. 25,00,000/- each to assessee as well as to his three brothers for relinquishment of right in the property. Such payment was received by way of cheque for surrendering their right. The assessee purchased a flat and paid a consideration against purchase

Himasagar Krishna Muthappagari, Tirupati vs. ITO., Ward-2(3), Tirupati

ITA 687/HYD/2024[2016-17]Status: DisposedITAT Hyderabad12 Mar 2025AY 2016-17

Bench: Us.

For Appellant: Shri M. Uday Teja, C.AFor Respondent: Ms. M. Narmada, CIT-DR

Section 143(3)Section 147Section 148Section 263

आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘बी’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad श्री मंजूनाथ

Assistant Commissioner of Income Tax Central Circle3-(4), Hyderabad vs. Aarthik Greentech Solutions Private Limited, Hyderabad

In the result, appeal filed by the Revenue is dismissed

ITA 32/HYD/2021[2014-15]Status: DisposedITAT Hyderabad21 Feb 2025AY 2014-15

Bench: Shri Manjunatha G. & Shri K.Narasimha Charyआ.अपी.सं /Ita No.32/Hyd/2021 (निर्धारण वर्ा/Assessment Year: 2014-15) Asst.Commissioner Of Vs. Aarthik Greentech Income Tax Solutions Pvt.Ltd. Central Circle-3(4) Hyderabad Hyderabad [Pan : Aalca6887D] आ.अपी.सं /Ita No.33/Hyd/2021 (निर्धारण वर्ा/Assessment Year: 2014-15) Asst.Commissioner Of Vs. Aarthik Infra Projects Income Tax Pvt.Ltd. Central Circle-3(4) Hyderabad Hyderabad [Pan : Aahca0719N] (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: Shri P.Murali Mohan Rao,Ar रधजस् व द्वधरध/Revenue By: Ms.M.Narmada, Cit-Dr सुिवधई की तधरीख/Date Of Hearing: 19/12/2024 घोर्णध की तधरीख/Date Of 21/02/2025 Pronouncement: आदेश / Order Per. Manjunatha G., A.M: These Appeals Filed By The Revenue Are Directed Against Order Dated 11.09.2020 Of The Commissioner Of Income Tax (Appeals) [“Ld.Cit(A)”]-11, Hyderabad Pertaining To A.Y.2014-15. Since, Facts Are Identical & Issues Are Common, For The Sake Of Aarthik Greentech Solutions Pvt. Ltd. & Aarthik Infra Projects Pvt.Ltd.

For Appellant: Shri P.Murali Mohan Rao,ARFor Respondent: Ms.M.Narmada, CIT-DR

Section 132Section 143(1)Section 153C

transferred to the assessee company and on subsequent cancellation of development agreement cum GPA vide document No.1187/2014 dated 06.03.2014, the assessee has relinquished its rights over the property in favour of the purchaser, M/s Asma Estates & Investments Pvt.Ltd. Therefore, the consideration paid in cash as recorded in the documents found ... drive seized from Jayanta Kumar Dutta is nothing but the consideration paid for relinquishment of rights over development agreement and therefore, opined that the amount of Rs.7,76,99,000/- received Aarthik Greentech Solutions Pvt. Ltd. and Aarthik Infra Projects Pvt.Ltd. by the assessee company in cash from Asma Estates

Vmd Enterprises P. Ltd., Chennai vs. ACIT, CC-1(3), Chennai

In the result, the appeal filed by the assessee is allowed

ITA 1123/CHNY/2024[2016-17]Status: DisposedITAT Chennai22 Jan 2025AY 2016-17

Bench: Shri George George K & Shri Jagadishआयकर अपील सं./Ita No.1123/Chny/2024 िनधा"रण वष" /Assessment Year: 2016-17

For Appellant: Shri Y. Sridhar, FCAFor Respondent: Shri R. Clement Ramesh Kumar, CIT

Section 153CSection 2(47)Section 28

hereinafter “the Act”) on 31.12.2018. :- 2 -: 2. The effective ground of appeal of assessee is against confirming the compensation received on relinquishment of right to acquire the property by cancelling the earlier purchase agreement as business income against the capital gain shown by the assessee. 3. The brief facts ... assessee entered into cancellation agreement with M/s. Hind Mercantile Corporation Ltd., on 24.11.2015 and received compensation of Rs.7,24,00,000/- towards the relinquishment of right to acquire the property in addition to the original advance amount of Rs.1,87,50,000/. The assessee in the return of income, offered

Murali Krishna Yenugula, Chennai vs. ITO, Ncw-22(1), Tambaram

In the result, appeal filed by the assessee is allowed

ITA 2347/CHNY/2024[2015-16]Status: DisposedITAT Chennai15 Jan 2025AY 2015-16

Bench: Shri Aby T. Varkey & Shri Amitabh Shukla

Section 143Section 143(1)Section 143(2)Section 143(3)Section 148Section 54Section 54F

Murali Krishna Yenugula :: 2 :: During the relevant FY 2014-15, the assessee received consideration of Rs.1.45 crores in lieu of relinquishment of rights, title and interest in respect of an immovable property (hereinafter referred to as ‘scheduled property’). The RoI was originally processed by the CPC u/s.143 ... Understanding (MoU) was drawn on 13.12.2014, and as a result of it, the assessee received Rs.1.45 Crores as consideration/compensation in lieu of relinquishment of rights, title and interest in respect of immovable/scheduled property; and pursuant thereto, the assessee admitted in his RoI, the income from the transaction as Long Term

Amartbhai Mandanbhai Desai, Ahmedabad vs. The Pr. CIT-3, Ahmedabad

In the result, the appeal of the assessee is dismissed

ITA 180/AHD/2022[2017-18]Status: DisposedITAT Ahmedabad08 Jan 2025AY 2017-18

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri S. N. Divetia & Shri Samir Vora, A.RsFor Respondent: Shri Prothviraj Meena, CIT-DR

Section 143(3)Section 263Section 54B

PCIT was of the view that this amount of Rs. 57.66 lakhs had not been spent for purchase of agricultural land but for relinquishment of rights of the “confirming parties”. The assessee submitted during the course of 263 proceedings that this amount of Rs. 57,66,666/- had been made

Gunvantbhai Narandas Patel, Ahmedabad vs. The Income Tax Officer, Ward-2, Gandhinagar

In the result, appeal of the assessee is partly allowed for statistical purpose

ITA 1459/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad17 Dec 2024AY 2013-14

Bench: Dr. Brr Kumar & Ms. Suchitra Kambleassessment Year: 2013-14

Section 143(2)Section 147Section 148Section 2(14)Section 68

Patel vs. ITO Page 2 of 5 3. The Learned CIT(A) has erred in not appreciating the facts and law that for relinquishment of right there is no need of any ownership of the land but possession is required which is holding by the appellant, which is handed over

Topzone Mercantile Company LLP, Mumbai vs. The Assistant Commissioner of Income Tax, Circle 21(3), Mumbai

Appeal of the appellant is allowed for statistical purposes

ITA 4294/MUM/2024[2016-17]Status: DisposedITAT Mumbai11 Dec 2024AY 2016-17

Bench: Smt. Kavitha Rajagopal (Jm) & Shri Omkareshwar Chidara (Am)

Section 250

cited appeal, the learned Assessing Officer (AO for short) made additions as follows while completing the assessment order :- a) Disallowance of payment towards relinquishment of rights by Piramal Enterprises Ltd. – Rs. 14 lakhs. b) Disallowance of management fees – Rs. 76,66,199/- c) Marketing support services

Bhanudas Vitthal Mhasurkar, Pune vs. The Income Tax Officer, Ward-2(5), Pune

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1264/PUN/2023[2016-17]Status: DisposedITAT Pune19 Nov 2024AY 2016-17

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2016-17

For Appellant: Shri Kishor B PhadkeFor Respondent: Shri Ramnath P Murkunde

Section 143(1)Section 143(2)Section 53ASection 54BSection 54F

revenue department. It was further submitted that the first payment received was on 03.06.2015 which is to be considered as the date of relinquishment of rights u/s 53A of the Transfer of Property Act, 1882. Further, public notice was already served by the purchaser on 11.05.2015 as mentioned in page

Kothari Sanjay Manilal, HUF, Ahmedabad vs. The DCIT, Circle-3(1)(1), Ahmedabad

In the result, the appeal filed by the assessee is partly allowed

ITA 698/AHD/2024[2018-19]Status: DisposedITAT Ahmedabad08 Nov 2024AY 2018-19

Bench: Shri T.R. Senthil Kumar & Shri Narendra Prasad Sinhaआयकर अपील सं./I.T.A. No. 698/Ahd/2024 ("नधा"रण वष" / Assessment Year : 2018-19)

For Appellant: & Shri Parin Shah, A.RFor Respondent: Date of Hearing

Section 143(3)Section 250Section 54FSection 57

determining the sale consideration of Rs. 12,31,77,000/= instead of consideration received of Rs. 6,16,49,843/= by virtue of relinquishment of right in land in favor of societies which were subsequently sold by societies. 5. The Ld. CIT (A) has grievously erred ... Rs.12,31,77,000/- by the AO as against the consideration of Rs.6,16,49,843/- only received by the assessee on relinquishment of right in land in favour of the societies. Shri S. N. Soparkar, Ld. Sr. Advocate appearing for the assessee explained that assessee was holding rights

Supreme High Spaces LLP, Mumbai vs. Nafac, Delhi

The Appeals are dismissed

ITA 4431/MUM/2023[2018-19]Status: DisposedITAT Mumbai07 Nov 2024AY 2018-19

Bench: Shri Narender Kumar Choudhry

Section 145(1)Section 14ASection 250

held to have been accrued on the date of debenture agreement due for payment at each year end. Relinquishment of right to receive interest on due date i.e. on 31.03.2018 may be an application of income without paying tax but cannot override accrual of income. Interest on debenture

Jaivir Singh, Faridabad vs. Income Tax Officer, Ward 1(3), Faridabad

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 1957/DEL/2024[2017-18]Status: DisposedITAT Delhi15 Oct 2024AY 2017-18

Bench: Shri Anubhav Sharma & Shri Brajesh Kumar Singh[Assessment Year: 2017-18]

Section 142(1)Section 144Section 69

plaintiffs 3 and 4 and defendant. It was, inter alia, mentioned therein that the defendant, in whose favour the plaintiffs 3 and 4 relinquished the rights, had paid Rs. 15,000/- each to the said plaintiffs. Dealing with the impact of Section 17 and 49 of the Registration Act this ... Court, inter alia, held: "16. Even though recitals in Ext. D-22 are to the effect of relinquishment of right in Items 1 and 2, Ext. D-22 could be taken as family arrangements/ settlements. There is no provision of law requiring family settlements to be reduced to writing

Charnesh Kapoor, United Kingdom vs. Assistant Commissioner of Income Tax, Circle 2(1)(2), International Taxation, New Delhi

In the result, the appeal of the assessee is dismissed

ITA 2085/DEL/2023[2016-2017]Status: DisposedITAT Delhi30 Aug 2024AY 2016-2017

Bench: Dr. B.R.R. Kumar & Shri Anubhav Sharmaassessment Year: 2016-17 Charnesh Kapoor, Vs Acit, 12, Jay Mews London United Circle-2(1)(2), Kingdom Sw72, International Taxation, United Kingdom, 72. New Delhi. Pan: Apkpk5291E (Appellant) (Respondent) Assessee By : Shri Saurav Rohtagi, Ca Revenue By : Shri Vijay B. Vasanta, Cit-Dr Date Of Hearing : 04.07.2024 Date Of Pronouncement : 30.08.2024

For Appellant: Shri Saurav Rohtagi, CAFor Respondent: Shri Vijay B. Vasanta, CIT-DR

Section 143(2)Section 147Section 148Section 151

provisions of Income Tax Act 1961.” It seems there was no response to same to satisfaction of AO, so the AO 11 treated relinquishment of rights under compromise as transfer of capital asset. Capital gains are calculated by the AO on the basis of value of land received in lieu ... relinquishment of rights in litigation. Nothing was submitted before us, to allege, that on facts and law same is not sustainable. In the light of the aforesaid discussion, the single line argument of the ld. AR that capital gains have been calculated in spite of the assessee being a purchaser

Gunvantbhai Narandas Patel, Gandhinagar vs. The Income Tax Officer, Ward-2, Gandhinagar

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 122/AHD/2024[2014-15]Status: DisposedITAT Ahmedabad10 Jul 2024AY 2014-15

Bench: Smt. Annapurna Gupta (Accountant Member), Shri Siddhartha Nautiyal (Judicial Member)

Section 148Section 250Section 54FSection 69A

Kabja Karar in F.Y. 2012-13. 3. The Learned CIT (A) has erred in not appreciating the facts and law that for relinquishment of right there is no need of any ownership of the land but possession is required which is holding by the appellant, which is handed over

M/S Rishi Construction, Bhopal vs. The ITO-1(2), Bhopal

Appeals are allowed for statistical

ITA 88/IND/2023[2015-16]Status: DisposedITAT Indore27 Jun 2024AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2015-16 Acit (Central)-2, Rishi Construction, Bhopal F-11, Mansarovar Complex, Hoshangabad Road, बनाम/ Bhopal Vs.

Section 143(3)

reflecting full sale-proceed of Rs. 4,70,06,136 (-) Rs. 3,50,06,136 with the caption “cost of relinquishment of right on sale by Shri Govind Reality” in an attempt to claim before AO that the payment of Rs. 3,50,06,136/- made to M/s Page ... Rishi Construction, Bhopal ITA No. 220/Ind/2022 and 88/Ind/2023 – AY 2015-16 Govind was a cost of relinquishment of right and therefore allowable as deduction u/s 37(1). This claim was made through a separate letter dated 01.12.2017, copy at Page 73-75 of the Paper-Book, filed by assessee

ACIT Central -2 Bhopal, Bhopal vs. M/S Rishi Construction, Bhopal

Appeals are allowed for statistical

ITA 220/IND/2022[2015-16]Status: DisposedITAT Indore27 Jun 2024AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2015-16 Acit (Central)-2, Rishi Construction, Bhopal F-11, Mansarovar Complex, Hoshangabad Road, बनाम/ Bhopal Vs.

Section 143(3)

R.C. Nirula & Sons HUF, New Delhi vs. ACIT, New Delhi

In the result, the appeal of the assessee is allowed

ITA 6093/DEL/2015[2008-09]Status: DisposedITAT Delhi12 Jun 2024AY 2008-09

Bench: Shri Saktijit Dey, Hon’Ble & Shri M. Balaganeshr.C. Nirula & Sons Huf, Vs. Asst. Commissioner A-2, Anand Niketan, Of Income Tax, New Delhi Circle-52(1), New Delhi (Appellant) (Respondent) Pan: Aaahr6050F Assessee By : Shri Gaurav Jain, Adv Shri Praveen Kumar, Ca Revenue By: Shri Manish Kumar Davas, Sr. Dr Date Of Hearing 10/06/2024 Date Of Pronouncement 12/06/2024

For Appellant: Shri Gaurav Jain, AdvFor Respondent: Shri Manish Kumar Davas, Sr. DR

Section 143(3)

possession, but section 2(47)(ii) shall be applicable which require condition of relinquishment of asset. As per the Ld. AO there was relinquishment of rights and, therefore transfer took place in AY 2008- 09. 10. On appeal by assessee against order u/s 147/143 ... vested with entire rights in the property until consideration was received and NOC was issued by the Builder. Thus there was no extinguishment/ relinquishment of rights of the assessee. If this Agreement to sell is transfer, then capital gains shall be leviable on all the agreement to sell even

Oberoi Hotels Private Limited, Kolkata vs. DCIT, Cir-8, Kolkata.

ITA 1811/KOL/2006[2003-04]Status: DisposedITAT Kolkata30 May 2024AY 2003-04

Bench: Shri. Rajesh Kumar () & Shri Anikesh Banerjee ()

Section 143(3)Section 14ASection 250

Oberoi Hotels (supra) in the assessee's own case on similar facts for assessment year 2003-04 and had held that compensation received relinquishment of right to operate the Hotel in Sri Lanka was a capital receipt in ITA 1808/2006 14 ITA 489/Kol /2005 ITA 1808/Kol /2006 ITA 1811/Kol /2006

DCIT, Cir-8, Kolkata vs. Oberoi Hotels Pvt. Ltd., Kolkata

ITA 1808/KOL/2006[2003-04]Status: DisposedITAT Kolkata30 May 2024AY 2003-04

Bench: Shri. Rajesh Kumar () & Shri Anikesh Banerjee ()

Section 143(3)Section 14ASection 250