This appeal has been filed by assessee against order dated 24-1- 1984 of Commissioner (Appeals) relating to assessment year 1980-81, previous year of which ended on 31-3-1980. 2. assessee inherited property which was under lease, on death of her husband in 1960. That lease expired in 1970. However, lessee did not give possession to assessee. assessee filed suit for eviction and mesne profit. suit was decreed in favour of assessee on 11-8-1971. decree was affirmed on 19-5-1979 by Additional District Judge, by Calcutta High Court on 6-5-1976 and by Supreme Court on 19-9-1977. assessee then applied for execution of decree. Court appointed Commissioner to determine claim of quantum of mesne profit. While execution of said decree and determination of quantum of mesne profit were pending, Government of West Bengal acquired demised property on 24-12-1979. settlement was arrived at between assessee and Government of West Bengal. On basis of said settlement, High Court passed order dated 28-2-1980. By this order, Government of West Bengal was to pay Rs. 11 lakhs to assessee towards compensation for acquisition of property. Secondly, Government had also to pay another sum of Rs. 2 lakhs to assessee in consideration of assignment of decree for mesne profit and eviction. Thus, by virtue of order of High Court dated 28-2-1980, sum of Rs. 2 lakhs became payable by Government of West Bengal to assessee towards mesne profit. 3. assessee considered aforesaid sum of Rs. 2 lakhs as rent receivable by her. Another order dated 6-9-1985 of High Court clarified their earlier order dated 28-2-1980 by saying that mesne profit related to period from May 1970 to February 1980. assessee calculated proportionate sum relevant to assessment year 1980-81 at Rs. 22,570. assessee offered above sum to tax as income from property relating to previous year under consideration. ITO did not agree with stand of assessee. ITO held that entire sum of Rs. 2 lakhs was assessable during assessment year 1980-81 under head 'Income from other sources'. After obtaining approval of IAC under section 144B of Income-tax Act, 1961, he made assessment on total income of Rs. 2 lakhs under head 'Income from other sources'. It may be mentioned in this connection that assessee had urged before IAC in course of proceedings under section 144B that sum of Rs. 2 lakhs was capital receipt as it was in nature of damage for wrongful retention of assessee's property. Hence, assessee had contended that amount was not taxable at all notwithstanding fact that return was wrongly filed showing income of Rs. 22,570 which was portion of aforesaid sum of Rs. 2 lakhs. IAC did not agree with above contention on ground that mesne profit of Rs. 2 lakhs was not in nature of damage or compensation but was in nature of additional rent receivable by assessee. It was on basis of these directions of IAC that assessment was made by ITO as above. 4. assessee appealed to Commissioner (Appeals) and contended: (1) that amount was not taxable because it was capital receipt; (2) in alternative, entire income was not taxable during single assessment year under consideration; and (3) that amount was assessable under head 'Income from house property'. Various case laws were cited before him. Commissioner (Appeals) considered contentions of assessee. He analysed case laws cited before him and found them to be distinguishable from facts of instant case. On other hand, he found certain case laws t o support stand taken by ITO. Relying on those cases, he upheld order of ITO on all three grounds taken before him and dismissed appeal. 5. Aggrieved by above order of Commissioner (Appeals) assessee is in appeal before us. Shri N. K. Poddar, learned representative for assessee, urged before us that Commissioner (Appeals) erred in his decision. His line of attack was that aforesaid sum of Rs. 2 lakhs was capital receipt as it was mesne profit which is essentially in nature of damages. In support of this contention he referred to Mulla's commentary on Code of Civil Procedure, Thirteenth edn., p. 929 for proposition that mesne profit is virtually claim for damages and that wrongful possession is very essence of claim for mesne profit. In order to support this argument, Shri N.K. essence of claim for mesne profit. In order to support this argument, Shri N.K. Poddar relied on following cases: (1) CIT v. Rani Prayag Kumari Debi [1940] 8 ITR 25 (Pat.): In this case, assessee was deprived of certain movable and immovable properties. She filed suit and obtained decree for recovery of movables and immovables and also damages for wrongful detention of properties. It was held that damages received by assessee for wrong- ful- detention of her properties was not revenue receipt as it was not paid under any contract to pay any interest. (2) CIT v. J. D. Italia [1983] 141 ITR 948 (AP): In this case land of assessee was unauthorisedly occupied and civil suit instituted by assessee for recovery of possession was decreed in 1 is favour. During pendency of appeal parties arrived at compromise whereunder assessee was paid sum of Rs. 40,000 described as interest. It was held that receipt was essentially in nature of damages for wrongful use and occupation of assessee's land and so it was capital receipt. (3) CIT v. Periyar & Pareekami Pubbers Ltd. [1973] 87 ITR 666 (Ker.): In this case, it was held that interest paid on compensation payable under Land Acquisition Act, 1894, up to date of award is revenue receipt. However, interest paid for period from date of acquisition till date of award is capital receipt. decision in this case rested upon distinction between possession assumed under provisions of Land Acquisition Act and possession otherwise taken. (4) P.L.M. Firm v. CIT [1968] 68 ITR 856 (Mad.): In this case, there was contract of lease of certain mines belonging to assessee with another party. There was breach of contract by other party. assessee invoked arbitration clause of contract and got award of sum as damages. It was held that amount received as damages was not income but of capital nature. (5) CIT v. National Insurance Co. Ltd. [1978] 113 ITR 37 (Cal.) In this case, assessee was permanently deprived of its right to manage its life insurance business by Central Government and was awarded compensation for such deprivation. It was held that said compensation was capital receipt. At this stage, we enquired from Shri N.K. Poddar as to whether his case was that sum of Rs. 2 lakhs was received as consideration for transferring capital asset as he was urging that same was capital receipt. He replied in affirmative. To cut further query as to whether transfer would not attract capital gains tax, he stated there would be no capital gains tax in view of decision in case of CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294 (SC). In this case, it was held that no capital gains tax is leviable on surplus arising out of transfer of asset whose cost of acquisition or date of acquisition could not be definitely ascertained. According to Shri N.K. Poddar, asset, transferred by assessee for which she received sum of Rs. 2 lakhs had no cost of acquisition. 6. Shri N.K. Poddar, then proceeded to his alternative contention. He urged that even if said sum of Rs. 2 lakhs is held to be revenue receipt whole of said amount could not be taxed in one year because of clarification dated 6-9-1985 of High Court stating that mesne profit related to period of about 10 years, viz., from May 1970 to February 1980. In this connection, he referred to decisions in cases of CIT v. Sachindramohan Nandy [1984] 146 ITR 597 (Cal.) and CIT v. Deoki Nandan & Sons [1982] 138 ITA 225 (Delhi). In former case, it was held that where assessee does not indicate method of accounting followed by him, in ordinary course, receipt cannot be assessed to tax on basis of cash system of accounting. In latter case, it was held that interest awarded by Court under Land Acquisition Act accrued day by day throughout years from date of taking over possession till payment of compensation. Finally, he urged that income bad to be assessed under head 'Income from house property' because it was in nature of additional rent. 7. Shri S. Dasgupta, learned representative for department, on other hand, supported order of authorities below on grounds stated in their orders. Then, he referred to decision in case of CIT v. Siewart & Dholakia (P.) Ltd. [1974] 95 ITR 573 (Cal.). In this case, there was breach of contract to render services and damages were awarded on basis of consent decree. It was held that amount was revenue receipt as loss of one customer out of many could not be said to be loss to capital structure of assessee. Next, he referred to decision in case of Ramachandra Dhonde Datar v. CIT [1961] 43 ITR 22 (Bom.). In this case, amount awarded under decree was held to be taxable because it was not compensation for loss of employment. In this connection, he also referred to decision in case of Dr. Shamlal Narula v. CIT [1964] 53 ITR 151 (SC). In this case it was held that statutory interest payable by Government on amount of compensation for acquiring land is taxable as revenue receipt. Hence, he urged that order of Commissioner (Appeals) deserved to be upheld. 8. We have considered contentions of both parties as well as facts on record. In our considered opinion none of cases cited by either side is on all fours with facts of instant case. One such of cases related to interest payable on compensation amount payable on acquisition of land. Another such case relates to damages paid on breach of contract for service. Another case relates to breach of contract for running mine on commercial lines. We find that all these cases are distinguishable on facts from case before us. undisputed facts in case before us are that assessee became entitled to receive sum of Rs. 2 lakhs on 28-2-1980 as consideration for transferring decree to recover mesne profit. In other words, instead of waiting till determination of quantum of mesne profit by Commissioner appointed by Court and recovering same from lessee, assessee compromised to receive down payment of Rs. 2 lakhs from Government of West Bengal in full and final settlement of her claims to mesne profit against lessee. 'Mesne profit' has been defined in rule 12, Order 20 of Civil Procedure Code in Mulla's commentary, Fourteenth edn., pp. 1304 to 1306. It has been stated that claim for mesne profit is virtually claim for damages. This has been held so in case of Girish Chunder [1900] 27 Cal. 951. Again in case of Dakshina v. Saroda [1894] 21 Cal. 142, it has been held that mesne profit is in nature of damage which Court may mould according to justice of case. In case of Gopal Das Khetry 59 CWN 229, it has been held that wrongful possession of defendant is very essence of claim of mesne profit. In case before us, assessee received sum of Rs. 2 lakhs by transferring her right to receive mesne profit. That right, in our opinion, was capital asset. It accrued in full on 28-2-1980. excess of Rs. 2 lakhs over cost of acquisition plus improvement, if any, would give rise to surplus which is, in our opinion, assessable under head 'Capital gains'. After considering all relevant facts and circumstances of case and case laws cited before us, we come to conclusion that sum of Rs. 2 lakhs was received in full on 28-2-1980 on transfer of capital asset. Thus, surplus, if any, arising out of transfer is assessable under head 'Capital gains'. Hence, we do not agree with revenue authorities that it is revenue receipt. Similarly, we do not agree with assessee that it did not accrue in full during previous year under consideration. We do not agree with both parties regarding head of income under which it is assessable because we hold that it is assessable under head 'Capital gains'. 9. We now come to argument raised by learned representative for assessee that no capital gain is chargeable on surplus arising out of aforesaid transfer because there was no cost of acquisition. We do not agree. We have gone through aforesaid decision in case of B.C. Srinivasa Setty (supra). That was case of transfer of goodwill. Court held that there was no cost of acquisition of goodwill as it grows slowly day by day without any specific expense incurred to acquire same. person starting new business cannot buy goodwill of new business from market in same way as he can purchase machinery or stock-in-trade. Besides, it cannot be said as to what is exact date on which goodwill was acquired. decision in case of B.C. Srinivasa Setty (supra) in respect of goodwill rested on these two points. In instant case, facts are entirely different. Firstly, it is not case of transfer of goodwill. capital asset transferred was decree representing right to receive money stipulated in decree. This asset is assignable and it has been so assigned on definite date. It is possible to determine exact date on which transfer took place. Again, it is also possible to determine cost of acquisition of asset. cost of asset of decree evidently consists of amount spent towards stamp duty and other legal expenses incurred for obtaining decree. It cannot be said that this amount is indefinite or not determinable. Hence, we hold that case of B.C. Srinivasa Setty (supra) does not stand in way of computing capital gains arising out of aforesaid transfer. Hence, we vacate orders of ITO as well as Commissioner (Appeals) and restore matter to file of ITO for making assessment afresh in accordance with law and our observations above after giving reasonable opportunity of being heard to assessee. 10. In result, appeal is allowed in pad as above. *** KODAK LTD v. INSPECTING ASSISTANT COMMISSIONER