Law:

Section:

Section 4 of the Income-tax Act, 1961 - Income - Chargeable as - Assessee was minor when her father gifted a property to her - During her minority, her father had entered into a lease agreement in respect of said property - Lumpsum consideration received for lease was assessed as revenue receipt in assessee's hands - Tribunal held that onus was on department to show that amount paid in lump sum represented lease rent and not consideration for parting with property - In absence of any material regarding real nature of transaction, Tribunal held that said amount was a capital receipt - Whether on facts, Tribunal was right in so holding - Held, yes - Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Whether where a ground was neither raised before AAC nor was raised in memorandum of appeal before Tribunal but was orally raised at time of hearing of appeal before Tribunal, Tribunal was justified in refusing leave to allow that ground at that belated stage - Held, yes FACTS The assessee was minor when her father gifted a property to her. The gift was accepted by her mother on her behalf. She attained majority on 12-1-1970. While she was a minor, on 22-5-1969, her father had entered into an agreement to lease out the said property for a period of 50 years for a rent of Rs. 1,000 per month and a sum of Rs. 1,00,000 was received as a premium. The lease deed did not mention about the further sum of Rs. 1,50,000, but receipt of the said sum was, however, admitted by the lessor. The ITO brought to tax a sum of Rs. 2,50,000 as revenue receipt taking the view that that amount was received in the year in which the assessee attained majority. The AAC held that the sum of Rs. 2,50,000 must be considered as a capital receipt. The Tribunal held that it was for the department to prove that the amount paid in lump sum represented the lease rent and not the consideration for parting with the property and in the absence of any material in this regard, the order of the AAC was to be confirmed. The Tribunal also refused to entertain the alternative ground of the department that capital gains on the transfer of the leasehold rights should be brought to tax in…

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