CIT, FARIDABAD vs. RAJ SINGH YADAV

PDF · subscribers
ITA/960/2008HC Punjab & HaryanaPHHC01081005200811 April 2016Author: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the appellant-revenue, in view of Circular No. 21/2015 dated 10.12.2015 read with Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016 issued by the Central Board of Direct Taxes, did not wish to press the appeal as the tax effect involved was less than ₹20 lacs. The Court dismissed the appeal as not pressed, granting liberty to the revenue to file an application for revival of the appeal if something survives therein. It was clarified that the withdrawal of the appeal by the revenue would not be taken as an affirmation of the Tribunal's order on merits, and the legal issue claimed by the revenue was left open to be adjudicated in an appropriate case. No finding was given on the merits of the issues raised.

What were the facts?

The Revenue (Commissioner of Income Tax, Faridabad) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 23.05.2008 passed by the Income Tax Appellate Tribunal (ITAT), Delhi Benches. The appeal pertained to assessment year 2002-03 and concerned the genuineness of a lease transaction of a building by Piya Motors to the assessee, Shri Raj Singh Yadav, and the head under which lease income and expenditure should be assessed. The amount in dispute is not explicitly stated but the appeal was not pressed due to a tax effect less than ₹20 lacs, as per CBDT circulars.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT is right in law in holding that the transaction of lease of building by Piya Motors to the assessee is a genuine transaction, especially when the alleged agreement was a veiled agreement as the assessee remained the exclusive owner of the property in the past and future also? (Question of law/mixed law and fact, concerning the genuineness of a transaction). 2. Whether, on the facts and in the circumstances of the case, the ITAT is right in law in holding that the income from lease of land owned by the assessee and from a building availed on lease from Piya Motors is not assessable under the head 'income from house property' and the expenditure incurred by the assessee on availing the rights in the land and building are allowable deduction u/s 57 of the Income Tax Act, 1961, especially when the lease deed was a veiled agreement and the assessee had entered into the same to avoid the tax liability? (Question of law/mixed law and fact, concerning the head of income and allowability of deductions under Section 57). Assessee's contentions: Not recorded. Revenue's contentions: The Revenue argued that the lease agreement was veiled and entered into to avoid tax liability, questioning the genuineness of the transaction and the classification of income and deductions.

Which sections of the Income-tax Act were involved?

Section 260A,Section 57

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 11.04.2016 Commissioner of Income Tax, Faridabad .......Appellant Versus Shri Raj Singh Yadav ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Rajesh Katoch, Advocate for Mr. Tajender K. Joshi, Advocate for the appellant. Mr. Akshay Bhan, Sr. Advocate with Mr. Alok Mittal, Advocate for the respondent. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 23.5.2008 passed by the Income Tax Appellate Tribunal, Delhi Benches-G New Delhi, in ITA No. 1892/D/06, for the assessment year 2002-03, raising the following substantial questions of law: (i) Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT is right in law in holding that the transaction of lease of building by Piya Motors to assessee is a genuine transaction especially when the alleged agreement was a veiled agreement as the assessee remained the exclusive owner of the property in the past and future also? (ii) Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT is right in law in holding that the income from lease of land owned by assessee and from building availed on lease from REEMA SAINI 2016.04.26 10:57 I attest to the accuracy and authenticity of this document High Court, Chandigarh -2- Piya Motors is not assessable under the head income from house property and the expenditure incurred by assessee on availing the rights in the land and building are allowable deduction u/s 57 of the Income Tax Act, 1961 especially when the lease deed was a veiled agreement and the assessee had entered into the same to avoid the tax liability? Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, he does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, he prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 11.04.2016 JUDGE reema REEMA SAINI 2016.04.26 10:57 I attest to the accuracy and authenticity of this document High Court, Chandigarh

More judgments on Section 57

All 1,225 judgments and leading authorities on Section 57 →

Recent GST High Court judgments

Search GST case law →