COMMISSIONER OF INCOME TAX vs. DILIPBHAI J. KINARIWALA

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ITA/130/1998HC GujaratGJHC24024168199809 December 2004Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI2 pages

AI SummaryRemanded

What did the High Court hold?

The High Court did not decide the merits of the case. Instead, it directed the Income Tax Appellate Tribunal (ITAT) to draw up a statement of case and refer the aforementioned questions of law for the opinion of the High Court. This direction was made in light of an order dated 22-03-2004 by the Apex Court in Review Petition Nos.1682-1737 of 2003 and Civil Appeal Nos.6148-6157 of 1998 and cognate matters. The Court made the rule absolute, meaning the application for referring the questions of law was granted. No specific findings were made on the issues by the High Court itself; the decision was procedural, to facilitate further legal examination.

What were the facts?

This case involves an application by the Commissioner of Income Tax (the revenue) against an order of the Income Tax Appellate Tribunal (ITAT). The assessee is Dilipbhai J. Kinariwala. The specific assessment years are not mentioned. The revenue is challenging the ITAT's confirmation of the Commissioner of Income Tax (Appeal)'s order. The core of the dispute revolves around the inclusion or exclusion of certain amounts and income from the assessee's total income. The procedural history indicates that the High Court is directing the ITAT to draw up a statement of case and refer specific questions of law for the Court's opinion, following an order by the Apex Court.

What were the issues?

The High Court was asked to decide on four questions of law arising from the ITAT's order: 1. Whether the ITAT was correct in confirming the CIT(A)'s direction to the Assessing Officer to include only the balance share of the assessee after reducing the share allegedly transferred to a family trust. 2. Whether the ITAT was correct in confirming the CIT(A)'s order to exclude the income of the minor son under Section 64(1)(iii) of the Income Tax Act, 1961. 3. Whether the ITAT was correct in confirming the CIT(A)'s order deleting the inclusion of income accrued or arisen to the Business/Joint Ventures (BOIs) from the assessee's total income. 4. Whether the ITAT ought to have appreciated that the entire transaction was created with the sole view of evading taxes. The revenue argued that the ITAT erred in its findings on these issues. The assessee's contentions are not explicitly detailed in the provided text, but their position is implied by the ITAT's confirmation of the CIT(A)'s order, which the revenue is challenging. The revenue's argument for the fourth question suggests a contention of tax evasion.

Which sections of the Income-tax Act were involved?

Section 64(1)(iii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX APPLICATION No.130 of 1998

For Approval and Signature:

HON'BLE MR.JUSTICE D.A.MEHTA and HON'BLE MS.JUSTICE H.N.DEVANI

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals?

-------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus DILIPBHAI J. KINARIWALA -------------------------------------------------------------- Appearance: 1. INCOME TAX APPLICATION No. 130 of 1998 MR MANISH R BHATT for ApplicantNo. 1 MRS SWATI SOPARKAR for Respondent No. 1 --------------------------------------------------------------

CORAM : HON'BLE MR.JUSTICE D.A.MEHTA and HON'BLE MS.JUSTICE H.N.DEVANI

Date of decision: 09/12/2004

ORAL JUDGEMENT (Per : HON'BLE MR.JUSTICE D.A.MEHTA)

Heard Mr.M.R.Bhatt, learned Senior Standing

Counsel for the applicant - revenue and Mr.S.N.Soparkar, learned Senior Advocate for the respondent - assessee. In light of the order dated 22-03-2004 made in Review Petition Nos.1682-1737 of 2003 and Civil Appeal Nos.6148-6157 of 1998 and cognate matters by the Apex Court, the following questions of law arise out of the order of the Income Tax Appellate Tribunal. "1. "Whether, the Appellate Tribunal is right in law and on facts in confirming the order made by the Commissioner of Income Tax (Appeal) directing the Assessing Officer to include only balance share i.e. after reducing the share which was alleged to be transferred to the family trust ?"

"Whether, the Appellate Tribunal is right in law and on facts in confirming the order passed by the Commissioner of Income Tax (Appeal) directing to exclude the income of the minor son under Section 64(1)(iii) of the Act ?"

"Whether, the Appellate Tribunal is right in law and on facts in confirming the order passed by the Commissioner of Income Tax (Appeal) deleting the inclusion of the income accrued of arisen to the BOIs from the total income of the assessee ?"

"Whether, the Appellate Tribunal ought not to have appreciated that the entire transaction was created with a sole view of evading due taxes ?"

Accordingly, the Tribunal is directed to draw up the statement of case and raise and refer the questions of law for the opinion of this Court. Rule made absolute. [ D.A.MEHTA,J ] [ H.N.DEVANI,J ]

* * * 'Bhavesh'

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