I. P. BANSAL, J.M.: appeal is filed by Revenue and C.O. by assessee. Both are directed against order of CIT(A) dt. 31st Jan., 2002 for asst. year 1992-93. cross-objection was not pressed hence dismissed. Ground of Revenue s appeal reads as under: "1. learned CIT(A) has erred in law and as well as on facts in deleting addition of Rs. 30 lakhs under s. 69 which was otherwise also taxable under s. 45 being surrender of lease right. assessee company was having lease right in agricultural land. same was transferred. This is clearly transfer of capital asset. (Lease right is capital asset). learned CIT(A) wrongly held in para 5(iv) of his order that right in agricultural land as per s. 2(14)(iii) was not asset. In fact as per s. 2(14)(iii), agricultural land was not asset. But lease right is asset and liable for capital gain tax. company was having lease right, hence on-money received for surrender of lease right was rightly taxed in hands of company by AO." present assessment is framed under s. 143(3) r/w s. 147 of Act. assessee was required to show as to why sum of Rs. 30 lakhs being amount of on-money received on surrender of leasehold rights in land near Amalsad, district Valsad as disclosed by Shri Jeetmal B Parekh being director of company in his statement recorded under s. 132(4) of Act, should not be added to total income of assessee. It was submitted that sum of Rs. 30 lakhs was received on surrender of leasehold rights in agricultural land admeasuring more than 11 acres at village Dambhar on 13th May, 1991. agricultural land is situated beyond 8 kms. from nearest municipality and thus it is not capital asset within meaning of s. 2(14) of Act. It was submitted that land in question qualifies as "agricultural land" and surrender of leasehold rights does not attract capital gain. To raise such contention, reliance was placed on Special Bench decision of Tribunal, Bombay Benches in case of Cadell Weaving Mills Co. (P) Ltd. vs. Asstt. CIT (1995) 53 TTJ (Bom)(SB) 538: (1996) 217 ITR 51 (Bom)(SB)(AT). It was pleaded that assessment year involved is 1992-93 and for that year tenancy rights or leasehold rights on immovable property were not liable to tax even if such rights were in respect of property other than agricultural land. Thus it was pleaded that said amount of Rs. 30 lakhs cannot be brought to tax. AO did not accept such submission of assessee for following reasons: "1. assessee had acquired leasehold right for period of 98 years which is as good as purchase in agricultural land on 14th Nov., 1984 with lease rent of Rs. 6000 to be paid annually in advance vide lease deed dt. 14th Nov., 1984. It is stated in said lease deed that company is entitled to sell gift charge or transfer its rights acquired through said deed. assessee had surrendered said rights in favour of original owner vide release deed dt. 13th May., 1991. It is clearly mentioned in para 20 of said deed that possession of land is given back to owner without any precondition and no consideration for that is received at present or not to receive in future. assessee had filed its returns of income for asst. year 1992-93 for previous year 1st April, 1991 to 31st March, 1992. assessee had not shown to have received any amount on account of surrender of lease right in land in question as evident from P&L a/c and balance sheet for year under consideration which is in accordance with terms of release deed mentioned above in para (2) and also in any of assessment year thereafter. Moreover, even after admission by Shri Jeetmal B. Parekh director that on- money was received by him on surrender of leasehold rights by land at Amalsad in his statements recorded on oath on different dates, assessee company has not taken any legal action against director of company. search under s. 132 of Act had been carried out in Mahalaxmi Group of which assessee is one of main member During course of action under s. 132 of Act, Shri Jeetmal B. Parekh who is director of assessee company and also key person of group, had given statement on oath under s. 132(4) on 16th Jan., 1995 that he had received sum of Rs. 30,00,000 as on-money on surrendering leasehold rights in land. It is also stated in his statement dt. 2nd March, 1995 that said sum was received by him only which was utilized for settling issue of division of business within his brother. assessee company has not reflected receipt accrual of Rs. 30,00,000 in any of return of income filed till date. assessee was given one more opportunity by way of issuance of notice under s. 148 of Act but assessee did not file any return of income in response thereto and have shown said sum of Rs. 30,00,000. However, assessee vide its letter dt. 22nd March, 2001 during course of assessment proceedings admitted that it got Rs. 30 lacs in consideration of surrender of leasehold rights and contended that said amount is not taxable in any provision of Act. Considering all facts and circumstances it has clearly emerged that sum of Rs. 30,00,000 had been received by assessee through its director. receipt of said sum is not result of release of leasehold rights as evidenced by release deed." It is under these circumstances sum of Rs. 30 lacs has been brought to tax under provisions of s. 69 of Act. Aggrieved assessee filed appeal before CIT(A) who has deleted addition with following observations: "5(iii) preponderance of evidence, observations of CIT(A) in case of director, statement of Shri J.B. Parekh undisputed by AO in assessment of Shri J.B. Parekh tilt balance in favour of appellant that Rs. 30 lacs, if believed to have been received has to be taken as received in consideration of surrender of lease right in land. There is no evidence to refute contention of appellant and to uphold view of AO that receipts are from unexplained sources. Rs. 30 lacs became matter of consideration only because of statement of director and in order to explain income surrendered during search. There is no evidence to show that money was earned by appellant from any unknown source and was either kept as deposit with director or was used by director except statement. statement of director, undisputed till passing of impugned order is either to be accepted in toto or not at all. If on account of his contention, Rs. 30 lacs is presumed to have been received, it is also to be accepted that same is for relinquishment of lease rights, in absence of any evidence to contrary. It cannot be brought to tax under s. 69 as taxable income from undisclosed sources, is erroneous. Hence addition is required to be deleted. (iv) Even otherwise land is agricultural land as is mentioned in all agreements entered prior to date of search. It is also established that it is agricultural land as defined in s. 2(14)(iii) of IT Act and hence not capital asset. This contention has not been disputed by AO in assessment order. Thus, there is no capital gain chargeable to tax arising from surrender of leasehold right in agricultural land. addition is therefore deleted." Revenue is aggrieved hence in appeal. facts as admitted by AO are that assessee had acquired leasehold rights for period of 98 years in subject agricultural land on 14th Nov., 1984 with lease rent of Rs. 6,000 per annum vide lease deed dt. 14th Nov., 1984 and assessee company had been given right to sell/gift/charge or transfer its right acquired through said deed. assessee company had surrendered said rights in favour of original owner vide release deed dt. 13th May, 1991. However, in lease deed there was no mention of consideration or it was mentioned that possession has been given back without consideration. These facts are not at all in dispute. director of assessee company had made statement under s. 132(4) regarding having received sum of Rs. 30 lacs on surrender of abovementioned lease rights which is main basis of making addition of Rs. 30 lacs and otherwise there is no document on record that assessee had earned such amount out of any other sources. Probably non- mention of consideration in release deed has created suspicion in mind of AO for treating same sum of Rs. 30 lacs as sum not relating to transfer of leasehold rights and thus addition has been made under s. 69 of Act. learned Departmental Representative argued that even if s. 69 was n o t applicable, amount otherwise was taxable as capital gain under provisions of s. 45 of Act as leasehold rights itself is asset, sale/transfer of which is liable for capital gain tax. According to learned Departmental Representative agricultural land though may not be capital asset s such but leasehold right thereunder constitute capital asset and thus sale/transfer is liable for capital gain tax. For this purpose he placed reliance on decision of Hon ble Andhra Pradesh High Court in case of Rajendra Mining Syndicate vs. CIT (1961) 43 ITR 460 (AP). Thus it was pleaded that learned CIT(A) has wrongly deleted addition and his order should be set aside and that of AO be restored. As against this argument of learned Departmental Representative learned counsel of assessee submitted that there was no question of adding said amount under provisions of s. 69 of Act as same relates to unexplained investment. He submitted that there was no evidence available on record to come to conclusion that said sum of Rs. 30 lacs was relating to any other document/evidence apart from surrender of leasehold right of subject agricultural land as admitted by director of assessee company during statement recorded under s. 132(4) of Act. Thus, he pleaded that learned CIT(A) was right in holding that no addition should have been made under s. 69 of Act. He further pleaded that land in question is not capital asset within meaning of s. 2(14) of Act as concerned land is beyond 8 kms from any municipality as submitted before AO and CIT(A). He further contended that CIT(A) has rightly concluded that amount related to surrender of leasehold rights of agricultural land thus was not exigible for capital gain tax and his decision is in accordance with decision of Hon ble Supreme Court in case of CIT vs. D.P. Sandu Bros. Chembur (P) Ltd. (2005) 193 CTR (SC) 578: (2005) 273 ITR 1 (SC) wherein it has been held that consideration for surrender of tenancy rights is not chargeable under s. 45 prior to amendment of s. 55(2) in 1995 as its cost on acquisition could not be determined; and receipts are not chargeable under s. 45 of Act because of inapplicability of computation provision and consideration cannot be treated as casual and non-recurring receipt under s. 10(3) and be subject to tax under s. 56. Thus he pleaded that order of CIT(A) should be confirmed. We have carefully considered rival submissions in light of material placed before us. facts which are undisputed have been stated in above part of this order. amount has been taxed on basis of statement of part of this order. amount has been taxed on basis of statement of director recorded under s. 132(4) of Act and there is no evidence on record to show that this amount relates to any other source. Therefore, said amount has rightly been treated by CIT(A) being related to surrender of leasehold rights of subject agricultural land. If it is so addition could not be made under s. 69 of Act because subject sum is not unexplained investment as rightly held by CIT(A). Thus we find no force in contention of Revenue that addition can be sustained to be rightly made under s. 69 of Act. Now coming to second argument of learned Departmental Representative that though agricultural land may not be capital asset within meaning of s. 2(14) of Act but leasehold right therein constitute capital asset and thus said sum is liable for capital gain. There cannot be any dispute on argument that leasehold right constitute capital asset as also has been held b y Hon ble Supreme Court in aforementioned case of CIT vs. D.P. Sandu Bros. Chembur (P) Ltd. (supra), wherein they have observed as under: "5. That tenancy right is capital asset, surrender of tenancy right is "transfer" and consideration received therefor is capital receipt within meaning of s. 45 has not been questioned before us and must in any event be taken to be concluded by decision of this Court in A. Gasper vs. CIT (1992) 102 CTR (SC) 161: (1991) 192 ITR 382 (SC). Normally consideration would, therefore, be subjected to capital gains under s. 45." contention of assessee in this regard is that there being no cost for acquisition of tenancy right, gain arising therefrom cannot be taxed as capital gain as per decision of Hon ble Supreme Court in case of CIT vs. B.C. Srinivasa Setty (1981) 21 CTR (SC) 138: (1981) 128 ITR 294 (SC). Following said case Special Bench in case of Cadell Weaving Mills Co. (P) Ltd. vs. Asstt. CIT (supra) has held that amount received as surrender of tenancy right is not liable for capital gain tax prior to amendment brought into statute in provisions of s. 55(2) w.e.f. 1st April, 1995. We have considered submissions of assessee and found that there is no material on record which can suggest that assessee has incurred any cost for acquiring this tenancy right and if it is so, gain arising out of tenancy right cannot be taxed for period prior to aforementioned amendment brought into statute w.e.f. 1st April, 1995 in provisions of s. 55(2) of Act. This aspect has been examined by Hon ble Supreme Court and it has been held that such gain is not liable to tax under s. 45 of Act as well as ss. 10(3) and 56 of Act. Relevant observations are reproduced below for sake of convenience: "6. In 1981, this Court in CIT vs. B.C. Srinivasa Setty (supra) held that all transactions encompassed by s. 45 must fall within computation provisions of s. 48. If computation as provided under s. 48 could not be applied to particular transaction, it must be regarded as "never intended by s. 45 to be subject of charge". In that case, Court was considering whether firm was liable to pay capital gains on sale of its goodwill to another firm. Court found that consideration received for sale of goodwill could not be subjected to capital gains because cost of its acquisition was inherently incapable of being determined. Pathak J., as his Lordship then was, speaking for Court said: What is contemplated is asset in acquisition of which it is possible to envisage cost. intent goes to nature and character of asset, that it is asset which possesses inherent quality of being available on expenditure of money to person seeking to acquire it. It is immaterial that, although asset belongs to such class, it may, on facts of certain case, be acquired without payment of money. In other words, asset which is capable of acquisition at cost would be included within provisions pertaining to head Capital gains as opposed to assets in acquisition of which no cost at all can be conceived. principle propounded in Srinivasa Setty (supra) has been followed by several High Courts with reference to consideration received on surrender of tenancy rights. [See: Among others Bawa Shiv Charan Singh vs. CIT (1985) 47 CTR (Del) 12: (1984) 149 ITR 29 (Del); CIT vs. Mangtu Ram Jaipuria (1991) 192 ITR 533 (Cal); CIT vs. Joy Ice-creams (Bang) (P) Ltd. (1993) 109 CTR (Kar) 33: (1993) 201 ITR 894 (Kar); CIT vs. Markapakula Agamma (1987) 63 CTR (AP) 108: (1987) 165 ITR 386 (AP) and CIT vs. Merchandisers (P) Ltd. (1990) 182 ITR 107 (Ker)]. In all these decisions, several High Courts held that if cost of acquisition of tenancy rights cannot be determined, consideration received by reason of surrender of such tenancy rights could not be subjected to capital gains. According to circular issued by CBDT, Circular No. 684, dt. 10th June, 1994 [(1994) 119 CTR (St) 25], it was to meet situation created by decision in Srinivasa Setty (supra) and subsequent decisions of High Court that Finance Act, 1994, amended s. 55(2) to provide that cost of acquisition of inter alia, tenancy right would be taken as nil. By this amendment, judicial interpretation put on capital assets for purposes of provisions relating to capital gains was met. In other words, cost of acquisition would be taken as determinable but rate would be nil. amendment took effect from 1st April, 1995, and accordingly applied in relation to asst. yr. 1995-96 and subsequent years. But till that amendment in 1995, and, therefore, covering assessment year in question, law as perceived by Department was that if cost of acquisition of capital asset could not, in fact, be determined, transfer of such capital asset would not attract capital gains. appellant now says that Srinivasa Setty s case (supra) would have no application because tenancy right cannot be equated with goodwill. As far as goodwill is concerned, it is impossible to specify date on which acquisition may be said to have taken place. It is built up over period of time. Diverse factors which cannot be quantified in monetary terms may go into building of goodwill, some tangible some intangible. It is contended that tenancy right is not capital asset of such nature that actual cost on acquisition could not be ascertained as natural legal corollary. We agree. tenancy right is acquired with reference to particular date. It is also possible that it may be acquired at cost. It is ultimately question of fact. In A.R. Krishnamurthy & Anr. vs. CIT (1989) 76 CTR (SC) 18: (1989) 176 ITR 417 (SC), this Court held that it cannot be said conceptually that there is no cost of acquisition of grant of lease. It held that cost of acquisition of leasehold rights can be determined. In present case however, Department s stand before High Court was that cost of acquisition of tenancy was incapable of being ascertained. In view of stand taken by Department before High Court, we uphold decision of High Court on this issue. Were it not for inability to compute cost of acquisition under s. 48. there is, as we have said, no doubt that monthly tenancy or leasehold right is capital asset and that amount received on its surrender was capital receipt. But because we have held that s. 45 cannot be applied, it is not open to Department to impose tax on such capital receipt by assessee under any other section. This Court, as early as in 1957 had, in United Commercial Bank Ltd. vs. CIT (1957) 32 ITR 688 (SC), held that heads of income provided for in sections of IT Act, 1922 are mutually exclusive and where any item of income falls specifically under one head, it has to be charged under that head and no other. In other words, income derived from different sources falling under specific head has to be computed for purposes of taxation in manner provided by appropriate section and no other. It has been further held by this Court in East India Housing & Land Development Trust Ltd. vs. CIT (1961) 42 ITR 49 (SC) that if income from source falls within specific head, fact that it may indirectly be covered by another head will not make income taxable under latter head. [See also: CIT vs. Chugandas & Co. (1964) 55 ITR 17 (SC)]. Sec. 14 of IT Act, 1961, as it stood at relevant time similarly provided that all income shall for purposes of charge of income-tax and computation of total income be classified under six heads of income, namely: (A) Salaries; (B) Interest on securities; (C) Income from house property; (D) Profits and gains of business or profession; (E) Capital gains; (F) Income from other sources unless otherwise, provided in Act. Sec. 56 provides for chargeability of income of every kind which has n o t to be excluded from total income under Act, only if it is not chargeable to income-tax under any of heads specified in s. 14 items to E. Therefore, if income is included under any one of heads, it cannot be brought to tax under residuary provisions of s. 56. There is no dispute that tenancy right is capital asset surrender of which would attract s. 45 so that value received would be capital receipt and assessable if at all only under item E of s. 14. That being so, it cannot be treated as casual or non-recurring receipt under s. 10(3) and be subjected to tax under s. 56. argument of appellant that even if income cannot be chargeable under s. 45, because of inapplicability of computation provided under s. 48, it could still impose tax under residuary head is thus unacceptable. If income cannot be taxed under s. 45, it cannot be taxed at all. [See: S.G. Mercantile Corpn. (P) Ltd. vs. CIT 1972 CTR (SC) 8: (1972) 83 ITR 700 (SC)]. Furthermore, it would be illogical and against language of s. 56 to hold that everything that is exempted from capital gains by statute could be taxed as casual or non-recurring receipt under s. 10(3) r/w s. 56. We are fortified in our view by similar argument being rejected in Nalinikant Ambalal Mody vs. S.A.L. Narayan Row, CIT (1966) 61 ITR 428, 432, 435 (SC)." In view of above mentioned factual and legal aspect, respectfully following aforementioned decision of Hon ble Supreme Court, we find that learned CIT(A) has rightly held that amount of Rs. 30 lacs could not be brought to tax. We uphold his order and Departmental appeal is dismissed. In result, appeal filed by Revenue and C.O. filed by assessee both are dismissed. *** INCOME TAX OFFICER v. HEENA AGRICULTURE (P) LTD