Sudhindra Mohan Guha, J. - (1.) We are concerned with the following questions in this reference under Section 256(1) of the Income-tax Act, 1961 : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee's right of tenancy under the landlords constituted a capital asset within the meaning of Section 2(14) of the Income-tax Act ? (2) If the answer to question No. (1) is in the affirmative, whether on the facts and in the circumstances of the case, the Tribunal was right in holding that there was a transfer of the assessee's right of tenancy under the landlords within the meaning of Section 2(47) of the said Act ? (3) If the answer to question No. (2) is in the affirmative, whether on the facts and in the circumstances of the case, the Tribunal was correct in holding that the sum of Rs. 1,83,201 represented capital gains assessable under Section 45(1) of the said Act for the assessment year 1967-68 ?"
(2.) The assessment year is 1967-68 for which the previous year ended on 31st March, 1967. The assessee is an individual and derived income practically from all sources including income from sub-letting premises No. 240E, Acharya Jagadish Bose Road, Calcutta (hereinafter referred to as the said "property").
(3.) In the course of the relevant assessment proceeding the ITO noticed in Part IV of the return of income reference to a sum of Rs. 2,25,000 received by the assessee from M/s. Associated Battery Makers (Eastern) Ltd. (here- inafter called "Associated Batteries"). On enquiry, he learnt that the assessee was a monthly tenant since 1940 of the said property under Kumar Biswanath Roy and others (hereinafter referred to as "the landlords"). He also found that the landlords entered into an agreement for lease dated March 27, 1967, with the Associated Batteries permitting them to construct a building on the said premises and the assessee was also a party to the said agreement.;