The assessee had leased its property and received an advance rent. The said lease agreement was cancelled and certain amount  was retained by the assessee. The assessee treated the same as capital gains, being extinguishment of rights and offered the same to tax at a concessional rate of 20%. AO assessed this income as being ‘income from other sources’ and subjected to tax at normal rates of tax. The ITAT concurred with the findings of CIT(A) and held that there is no extinguishment of any right as the right to rent is not transferred to anyone by the assessee and also because the assessee can very well rent the property to any other person as it wishes after the forfeiture of deposit. Further, the amount was received as a security deposit and a part of the same has been forfeited by the assessee, which changed its character and the same becomes an income of the assessee and cannot be assessed as capital gains. The same could not be taxed under ‘house property’ as the amount received did not remain like ‘advance rent’ therefore, the income was liable to be taxed as ‘income from other sources’. (AY.  2012-13)