Suhas Chandra Sen, J. - (1.) The relevant facts are that during the previous year relevant to the said assessment year, the petitioner received a sum of Rs. 21,20,000 from Messrs. Shaw Wallace and Company Limited as compensation on surrender of its monthly tenancy. The said tenancy was the capital asset of the petitioner and no cost of acquisition was incurred for its acquisition. In the assessment proceedings, the Assessing Officer accepted that the said sum could not be assessed to tax since there was no cost of acquisition of the said monthly tenancy.
(2.) The contention made on behalf of the assessee is that the view of the Assessing Officer is in consonance with the Division Bench decision of this court and other High Courts and the Supreme Court. The decision of the Division Bench of this court is in the case of CIT v. Mangtu Ram Jaipuria [1991] 192 ITR 533. The Commissioner in the notice initiating the proceedings is not disputing this aspect and is accepting the fact that the said sum could not be assessed as there was no cost of acquisition of the monthly tenancy. The Commissioner, however, is seeking to hold that though the said sum was not assessable as capital gains it could be assessed as a casual and non-recurring receipt under Section 10(3) of the Act. For this proposition, he is seeking support from a decision of the Allahabad High Court in the case of CIT v. Gulab Chand [1991] 192 ITR 495.
(3.) It is submitted on behalf of the writ petitioner that the proceedings initiated are wholly without jurisdiction and illegal. The proposed action is contrary to the law laid down by this court and the Supreme Court and against the basic principles of the income-tax law. No disputed questions of fact are involved. The issue is one of pure law going to the root of the jurisdiction. The condition precedent for exercise of the power, namely, the order of the Assessing Officer being erroneous and prejudicial to the Revenue does not exist. The alternative remedy is onerous and would cause undue hardship. A wholly unjust and arbitrary demand for huge amount would be raised and no justice can be expected from the Commissioner in the purported proceedings.;