K. Shivashankar Bhat, J.—The following questions have been referred under section 256(1) of the Income Tax Act, 1961 ("the Act" for short) :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was not right in holding that the receipt of Rs. 45 lakhs was a capital receipt ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was not right in holding that the sum of Rs. 45 lakhs was not chargeable to capital gains since the cost of acquisition of leasehold rights was nil ?"

2. The assesses company had its business premises at Bombay in a rented premises. On December 10, 1982, it entered an agreement with one Indage Engineering Company (P) Ltd., agreeing to surrender the premises for a consideration of Rs. 45 lakhs; the promise was the purchaser of the premises who had earlier agreed to provide the assessee with an alternative accommodation, in lieu of the premises under the occupation of the assessee; since the purchaser could not find any alternative accommodation, the agreement provided for the said payment of Rs. 45 lakhs to the assessee. This amount was stated as "lump sum damages for loss which he suffered and/or incurred