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“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
76
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
66
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
58
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
55
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
42
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
33
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
31
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
22
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

K.G. Krishna, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle- 1(4), Bangalore

ITA 308/BANG/2020[2008-09]Status: DisposedITAT Bangalore24 Jun 2022AY 2008-09

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Smt. Suman Lunkar, A.RFor Respondent: Shri Pradeep Kumar, CIT(DR) (Written submissions) &
Section 153A

ITA Nos.307 to 312/Bang/2020 Shri K.G. Krishna, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI CHANDRA

K. G. Krishna, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle- 1(4), Bangalore

ITA 307/BANG/2020[2007-08]Status: DisposedITAT Bangalore24 Jun 2022AY 2007-08

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Smt. Suman Lunkar, A.RFor Respondent: Shri Pradeep Kumar, CIT(DR) (Written submissions) &
Section 153A

ITA Nos.307 to 312/Bang/2020 Shri K.G. Krishna, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI CHANDRA

M/S Mitchell Associates, Mumbai vs. ITO 19(2)(3), Mumbai

Appeal is allowed

ITA 1718/MUM/2019[2013-14]Status: DisposedITAT Mumbai20 May 2022AY 2013-14
For Appellant: Shri K Gopal
Section 143(2)Section 143(3)Section 54E

payment of compensation of INR 60,00,000/- The Ld. Authorised Representative for the Appellant further submitted that the differential sum received on relinquishment of right in the Flat has been correctly offered to tax as LTCG by the Appellant and that the Assessing Officer has erred in treating

Tree Hill Estates Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore

In the result, the appeal of the assessee is dismissed

ITA 1395/BANG/2018[2013-14]Status: DisposedITAT Bangalore18 May 2022AY 2013-14

Bench: Smt. Beena Pillai & Ms. Padmavathy Sassessment Year : 2013-14

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

income chargeable to tax under the head 'Capital Gains'. The AO held that, there is a transfer by the assessee by way of relinquishment of rights in the assets of the firm. He also held that there is a transfer by way of extinguishment of rights, as a partner ... firm. The AO relied upon the decision in J.K. Kashyap v ACIT (2008) 302 ITR 255 (Del) which held that if an assessee relinquishes his rights in the property for a consideration, it amounts to transfer under section 2(47) of the Act and liable to capital gain tax under

DCIT, Bangalore vs. M/S Ind- Sing Developers (P) Ltd., Bangalore

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

ITA 202/BANG/2012[2005-06]Status: DisposedITAT Bangalore02 Mar 2022AY 2005-06

Bench: Shri George George K, Jm & Ms.Padmavathy S, Jm

For Appellant: S/Sri. G.S.Prashanth, CA and Narendra Sharma, AdvocateFor Respondent: Smt.Priyadarshini Besaganni, JCIT-DR
Section 132Section 143(3)Section 153ASection 40

I.T.Act vide order dated 31.12.2010 for the assessment year 2005-2006. The A.O. considered the income arising on sale of land and relinquishment of Rights as business income as against the assessee’s treatment as part of income as receipt from capital gains and part of it as capital receipt ... dated 30.11.2011. The CIT(A) granted partial relief to the assessee. The CIT(A) held that the income from sale of land and relinquishment of Rights be taxed under the head `capital gains’. 4. Aggrieved by the order of the CIT(A), the assessee has filed this appeal

M/S Ind Sing Developers Private Limited, Bangalore vs. DCIT, Bangalore

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

ITA 107/BANG/2012[2005-06]Status: DisposedITAT Bangalore02 Mar 2022AY 2005-06

Bench: Shri George George K, Jm & Ms.Padmavathy S, Jm

For Appellant: S/Sri. G.S.Prashanth, CA and Narendra Sharma, AdvocateFor Respondent: Smt.Priyadarshini Besaganni, JCIT-DR
Section 132Section 143(3)Section 153ASection 40

I.T.Act vide order dated 31.12.2010 for the assessment year 2005-2006. The A.O. considered the income arising on sale of land and relinquishment of Rights as business income as against the assessee’s treatment as part of income as receipt from capital gains and part of it as capital receipt ... dated 30.11.2011. The CIT(A) granted partial relief to the assessee. The CIT(A) held that the income from sale of land and relinquishment of Rights be taxed under the head `capital gains’. 4. Aggrieved by the order of the CIT(A), the assessee has filed this appeal

El El Hotels & Investments Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeal filed by the Revenue is dismissed

ITA 918/DEL/2010[2006-07]Status: DisposedITAT Delhi16 Feb 2021AY 2006-07
For Appellant: Shri Ajay Wadhwa, Advocate &For Respondent: Ms Nidhi Srivastava, CIT-DR
Section 115JSection 132Section 143(3)Section 153A

copy of which is placed at page 78 of the paper book, he submitted that payment of Rs.32.42 crores 12 was only for relinquishment of rights under operating licence. He submitted that there was no addition to the capital asset and there was no change in the capital structure ... 11th May, 2005 with ITC Ltd., shows that at clause iv) of point n., it is mentioned that Rs.32.42 crore was only for relinquishment of rights to operate the hotel under operating licence. The relevant clause of the agreement reads as under:- “The sum of Rs.32.42 crore (Rupees Thirty

Shanker Trading (P) Ltd vs. The CIT

The appeals stand disposed of

ITA - 53 / 2000HC Delhi09 Jul 2012
For Appellant: Mr Ajay Vohra and Ms Kavita JhaFor Respondent: Mr Sanjeev Sabharwal and Ms Suruchi Aggarwal
Section 201

compensate it for the losses, which it was likely to sustain on account of discontinuing such activities. The Trust also agreed to relinquish its rights and interest for purchase of Khair wood in Himachal Pradesh by way of commercial dealings followed by its processing for manufacture of Katha and Cutch ... that the lease rental was enhance from Rs 1,00,000/- to Rs 6,75,000/- for the following reasons:- (a) The Trust relinquishing its rights to purchase Khairwood in Himachal Pradesh; (b) The Trust agreeing not to indulge in competition with the assessee in a radius of less than

Commissioner of Income Tax Del vs. M/S Shankar Trading Co. P. Ltd

The appeals stand disposed of

ITA - 247 / 2002HC Delhi09 Jul 2012
For Appellant: Mr Ajay Vohra and Ms Kavita JhaFor Respondent: Mr Sanjeev Sabharwal and Ms Suruchi Aggarwal
Section 201

compensate it for the losses, which it was likely to sustain on account of discontinuing such activities. The Trust also agreed to relinquish its rights and interest for purchase of Khair wood in Himachal Pradesh by way of commercial dealings followed by its processing for manufacture of Katha and Cutch ... that the lease rental was enhance from Rs 1,00,000/- to Rs 6,75,000/- for the following reasons:- (a) The Trust relinquishing its rights to purchase Khairwood in Himachal Pradesh; (b) The Trust agreeing not to indulge in competition with the assessee in a radius of less than

CIT vs. Shankar Trading Co Ltd

The appeals stand disposed of

ITA - 842 / 2011HC Delhi09 Jul 2012
For Appellant: Mr Ajay Vohra and Ms Kavita JhaFor Respondent: Mr Sanjeev Sabharwal and Ms Suruchi Aggarwal
Section 201

compensate it for the losses, which it was likely to sustain on account of discontinuing such activities. The Trust also agreed to relinquish its rights and interest for purchase of Khair wood in Himachal Pradesh by way of commercial dealings followed by its processing for manufacture of Katha and Cutch ... that the lease rental was enhance from Rs 1,00,000/- to Rs 6,75,000/- for the following reasons:- (a) The Trust relinquishing its rights to purchase Khairwood in Himachal Pradesh; (b) The Trust agreeing not to indulge in competition with the assessee in a radius of less than

Commissioner of Income Tax vs. Shankar Trading Co Ltd

The appeals stand disposed of

ITA - 1198 / 2010HC Delhi09 Jul 2012
For Appellant: Mr Ajay Vohra and Ms Kavita JhaFor Respondent: Mr Sanjeev Sabharwal and Ms Suruchi Aggarwal
Section 201

compensate it for the losses, which it was likely to sustain on account of discontinuing such activities. The Trust also agreed to relinquish its rights and interest for purchase of Khair wood in Himachal Pradesh by way of commercial dealings followed by its processing for manufacture of Katha and Cutch ... that the lease rental was enhance from Rs 1,00,000/- to Rs 6,75,000/- for the following reasons:- (a) The Trust relinquishing its rights to purchase Khairwood in Himachal Pradesh; (b) The Trust agreeing not to indulge in competition with the assessee in a radius of less than

Commissioner of Income Tax vs. Shankar Trading Co Ltd

The appeals stand disposed of

ITA - 1183 / 2010HC Delhi09 Jul 2012
For Appellant: Mr Ajay Vohra and Ms Kavita JhaFor Respondent: Mr Sanjeev Sabharwal and Ms Suruchi Aggarwal
Section 201

compensate it for the losses, which it was likely to sustain on account of discontinuing such activities. The Trust also agreed to relinquish its rights and interest for purchase of Khair wood in Himachal Pradesh by way of commercial dealings followed by its processing for manufacture of Katha and Cutch ... that the lease rental was enhance from Rs 1,00,000/- to Rs 6,75,000/- for the following reasons:- (a) The Trust relinquishing its rights to purchase Khairwood in Himachal Pradesh; (b) The Trust agreeing not to indulge in competition with the assessee in a radius of less than

The Commissioner of Income Tax III vs. Shankar Trading Co.P.Ltd

The appeals stand disposed of

ITA - 1191 / 2008HC Delhi09 Jul 2012
For Appellant: Mr Ajay Vohra and Ms Kavita JhaFor Respondent: Mr Sanjeev Sabharwal and Ms Suruchi Aggarwal
Section 201

compensate it for the losses, which it was likely to sustain on account of discontinuing such activities. The Trust also agreed to relinquish its rights and interest for purchase of Khair wood in Himachal Pradesh by way of commercial dealings followed by its processing for manufacture of Katha and Cutch ... that the lease rental was enhance from Rs 1,00,000/- to Rs 6,75,000/- for the following reasons:- (a) The Trust relinquishing its rights to purchase Khairwood in Himachal Pradesh; (b) The Trust agreeing not to indulge in competition with the assessee in a radius of less than

C.I.T vs. Shankar Trading Co. Pvt Ltd

The appeals stand disposed of

ITA - 731 / 2008HC Delhi09 Jul 2012
For Appellant: Mr Ajay Vohra and Ms Kavita JhaFor Respondent: Mr Sanjeev Sabharwal and Ms Suruchi Aggarwal
Section 201

compensate it for the losses, which it was likely to sustain on account of discontinuing such activities. The Trust also agreed to relinquish its rights and interest for purchase of Khair wood in Himachal Pradesh by way of commercial dealings followed by its processing for manufacture of Katha and Cutch ... that the lease rental was enhance from Rs 1,00,000/- to Rs 6,75,000/- for the following reasons:- (a) The Trust relinquishing its rights to purchase Khairwood in Himachal Pradesh; (b) The Trust agreeing not to indulge in competition with the assessee in a radius of less than

The Commissioner of Income Tax III vs. Shankar Trading Co. P.Ltd

The appeals stand disposed of

ITA - 482 / 2008HC Delhi09 Jul 2012
For Appellant: Mr Ajay Vohra and Ms Kavita JhaFor Respondent: Mr Sanjeev Sabharwal and Ms Suruchi Aggarwal
Section 201

compensate it for the losses, which it was likely to sustain on account of discontinuing such activities. The Trust also agreed to relinquish its rights and interest for purchase of Khair wood in Himachal Pradesh by way of commercial dealings followed by its processing for manufacture of Katha and Cutch ... that the lease rental was enhance from Rs 1,00,000/- to Rs 6,75,000/- for the following reasons:- (a) The Trust relinquishing its rights to purchase Khairwood in Himachal Pradesh; (b) The Trust agreeing not to indulge in competition with the assessee in a radius of less than

The Commissioner of Income Tax vs. Shankar Trading Co. P. Ltd

The appeals stand disposed of

ITA - 361 / 2008HC Delhi09 Jul 2012
For Appellant: Mr Ajay Vohra and Ms Kavita JhaFor Respondent: Mr Sanjeev Sabharwal and Ms Suruchi Aggarwal
Section 201

compensate it for the losses, which it was likely to sustain on account of discontinuing such activities. The Trust also agreed to relinquish its rights and interest for purchase of Khair wood in Himachal Pradesh by way of commercial dealings followed by its processing for manufacture of Katha and Cutch ... that the lease rental was enhance from Rs 1,00,000/- to Rs 6,75,000/- for the following reasons:- (a) The Trust relinquishing its rights to purchase Khairwood in Himachal Pradesh; (b) The Trust agreeing not to indulge in competition with the assessee in a radius of less than

Commissioner of Income Tax III vs. M/S Shankar Trading Co.P.Ltd

The appeals stand disposed of

ITA - 1207 / 2005HC Delhi09 Jul 2012
For Appellant: Mr Ajay Vohra and Ms Kavita JhaFor Respondent: Mr Sanjeev Sabharwal and Ms Suruchi Aggarwal
Section 201

compensate it for the losses, which it was likely to sustain on account of discontinuing such activities. The Trust also agreed to relinquish its rights and interest for purchase of Khair wood in Himachal Pradesh by way of commercial dealings followed by its processing for manufacture of Katha and Cutch ... that the lease rental was enhance from Rs 1,00,000/- to Rs 6,75,000/- for the following reasons:- (a) The Trust relinquishing its rights to purchase Khairwood in Himachal Pradesh; (b) The Trust agreeing not to indulge in competition with the assessee in a radius of less than