THE PRINCIPAL COMMISSIONER OF INCOME TAX vs. SMT. SURYAKALA GOPAKUMAR

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ITA/111/2016HC KeralaKLHC01026910201621 October 2016Author: HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN,HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN5 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises from the ITAT's order. The Tribunal's decision was based exclusively on intertwined questions of facts and law. The Tribunal correctly concluded that the amount in the assessee's (late Smt. Suryakala's) account, being an investment from her husband, could not be taxed in her hands or her estate. The Court emphasized that the issue of whether the husband, Shri Gopakumar, had declared this amount as capital gain is a separate matter and irrelevant to the assessment of Suryakala's estate. The Court also noted that Shri Gopakumar was representing the estate and was not a party in his individual capacity. Consequently, the appeal was dismissed without prejudice to the Department's right to pursue proceedings against Shri Gopakumar independently, if permissible under law.

What were the facts?

The appeal concerns the assessment year 2010-2011. The assessee, late Smt. Suryakala, had certain amounts in her account that the Department considered unexplained. She passed away on December 1, 2012, and her husband, Shri C.P. Gopakumar, represented her estate. The Income Tax Appellate Tribunal (ITAT) considered whether the amount in Suryakala's account belonged to her. The ITAT noted that the amount was an investment from her husband, Gopakumar, and concluded it could not be taxed in Suryakala's hands or her estate. The ITAT also noted that whether Gopakumar had declared this amount as capital gain was a separate issue not relevant to Suryakala's case. The Principal Commissioner of Income Tax, Kottayam, is the appellant (Revenue), and Smt. Suryakala's legal heir is the respondent (assessee). The challenge is to the ITAT's order dated May 13, 2016.

What were the issues?

1. Whether the ITAT erred in holding that the amount in the assessee's (late Smt. Suryakala's) account, which was an investment from her husband, could not be reckoned as belonging to her and therefore not taxable in her hands or her estate, turning on the interpretation of facts and their legal implication under the Income Tax Act, 1961. Assessee's Contentions: The judgment does not record specific contentions from the assessee's side, but the ITAT's reasoning implies that the assessee's estate was not liable for the tax on the disputed amount. Revenue's Contentions: The Revenue, represented by the learned Senior counsel, argued the case at the admission stage. The judgment notes that the Revenue's arguments were heard "quite in extenso" but does not detail the specific grounds or provisions relied upon by the Revenue, other than the general context of scrutiny proceedings and unexplained amounts.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN FRIDAY, THE 21ST DAY OF OCTOBER 2016/29TH ASWINA, 1938 ITA.No. 111 of 2016 () ----------------------- AGAINST THE ORDER/JUDGMENT IN ITA 306/COCH/2015 OF I.T.A.TRIBUNAL, COCHIN BENCH DATED 13-05-2016 - ASSESSMENT YEAR 2010-2011 APPELLANT(S)/RESPONDENT/REVENUE : ------------------------------------------- THE PRINCIPAL COMMISSIONER OF INCOME TAX KOTTAYAM. BY ADVS.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX DEPT. RESPONDENT(S)/APPELLANT/ASSESSEE : -------------------------------------------- SMT. SURYAKALA GOPAKUMAR BY L/HEIR SH. C.P.GOPAKUMAR, VIJAYA MANGALAM, VAZHAPPALLY P.O., CHANGANACHERRY, KOTTAYAM-686 103. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 21-10-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA 111/16 APPENDIX APPELLANT'S ANNEXURES ANNEXURE-A : COPY OF ASSESSMENT ORDER UNDER SECTION 143(3) DATED 22.03.2013. ANNEXURE-B : COPY OF CIT (APPEALS) ORDER NO.54/TLA/CIT(A)/ KTM/2013-14 DT. 06.03.2015. ANNEXURE-C : COPY OF ITAT'S ORDER NO.306/COCH/2015 DATED 13.05.2016. ANNEXURE-D : COPY OF STATEMENT DATED 18.03.2013 RECORDED FROM SHRI.MANU THOMAS, BUYER OF PROPERTY. ANNEXURE-E : COPY OF ASSESSMENT ORDER AND STATEMENT OF INCOME OFFERING CAPITAL GAIN IN THE CASE OF SHRI C.P.GOPAKUMAR, ASSESSEE'S HUSBAND. ANNEXURE-F : COPY OF CASH FLOW STATEMENT ALONG WITH COMPUTATION OF CAPITAL GAIN OFFERED BY THE ASSESSEE AT TIME OF ASSESSMENT. //TRUE COPY// PA TO JUDGE. jg-24/10 THOTTATHIL B.RADHAKRISHNAN & DEVAN RAMACHANDRAN, JJ. .................................................................... ITA No.111 of 2016 .................................................................... Dated this the 21st day of October, 2016.

J U D G M E N T Thottathil B.Radhakrishnan, J. 1.We have heard the learned Senior counsel for the Revenue, quite in extenso, at the stage of consideration for admission of this income tax appeal under Section 260A of the Income Tax Act, 1961. 2.In the course of scrutiny proceedings, the assessee, late Smt.Suryakala was found by the Department to have had certain amounts which remained unexplained in her account. She expired on 01.12.2012. Her husband Gopakumar later carried the proceedings representing the estate of late wife, Smt.Suryakala. The matter went up to the Income Tax Appellate Tribunal. Before the Tribunal, adjudication was pithily on the issue as to whether the amount part in the account of Suryakala could be reckoned as belonging to her. Taking note of the fact -2- that the said amount came as an investment from her husband Gopakumar, the Tribunal concluded that it was not the amount that could be taxed at the hands of Suryakala, and therefore, not answerable by her estate. The question whether Gopakumar had actually shown that amount as part of capital gain is a different issue and unnecessary to be considered while deciding the case of Suryakala. It will always be open to the Department to deal with Gopakumar's case independent of any of the findings in the impugned order of the Tribunal for the simple reason that Gopakumar as an assessee was not a party but was only representing the estate of Suryakala as heir at law or legal representative. 3.Having examined the nature of consideration by the Tribunal, we do not see that there is any issue on law, much less any substantial question of law, arising for decision in this income tax appeal under Section 260A of the Act.

-3- The decision of the Tribunal rests exclusively on questions of facts and law, which are interlinked and intertwined, and that decision on questions of facts does not generate any question of law for consideration in this appeal. Hence, without prejudice to the Department's proceedings, if any, which could be followed or initiated against Gopakumar, in accordance with law, this appeal is dismissed. (THOTTATHIL B.RADHAKRISHNAN, JUDGE) (DEVAN RAMACHANDRAN, JUDGE) jg-21/10

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