COMMISSIONER OF INCOME TAX vs. PRASHANTBHAI J. KINARIWALA

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ITA/119/1998HC GujaratGJHC24024157199809 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 to draw up a statement of case and refer the aforementioned questions of law for the opinion of the High Court. This action was taken in light of an order dated 22-03-2004 made by the Apex Court in Review Petition Nos. 1682-1737 of 2003 and Civil Appeal Nos. 6148-6157 of 1998, and cognate matters. The High Court made the rule absolute, indicating that the applications for reference were granted. No specific findings were made on the four questions of law presented, as the matter was being remitted for a formal reference.

What were the facts?

This judgment concerns Income Tax Application Nos. 119 to 128 of 1998, filed by the Commissioner of Income Tax (the revenue) against Prashantbhai J. Kinariwala (the assessee). The applications arise from an order of the Income Tax Appellate Tribunal. The High Court of Gujarat at Ahmedabad is considering the questions of law that arise out of the Tribunal's order, in light of a prior order by the Apex Court. The specific assessment years are not explicitly stated in this excerpt. The procedural history indicates that the High Court is directing the Tribunal to draw up a statement of case and refer the questions of law for the Court's opinion.

What were the issues?

The High Court was asked to decide four questions of law, framed as follows: 1. Whether the Appellate Tribunal was right in law and facts in confirming the Commissioner of Income Tax (Appeals)' order to include only the balance share, after reducing the share allegedly transferred to a family trust. 2. Whether the Appellate Tribunal was right in law and facts in confirming the Commissioner of Income Tax (Appeals)' order to exclude the income of the minor son under Section 64(1)(iii) of the Act. 3. Whether the Appellate Tribunal was right in law and facts in confirming the Commissioner of Income Tax (Appeals)' deletion of the inclusion of income accrued or arisen to the BOIs (Bodies of Individuals) from the total income of the assessee. 4. Whether the Appellate Tribunal ought not to have appreciated that the entire transaction was created with the sole view of evading due taxes. The revenue, represented by Mr. M.R. Bhatt, argued these points. The assessee, represented by Mr. S.N. Soparkar, was also heard. The judgment does not explicitly detail the arguments made by each side for each specific issue, other than stating that the questions arise out of the Tribunal's order and are being considered in light of Apex Court pronouncements.

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.119 of 1998 to INCOME TAX APPLICATION No.128 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 PRASHANTBHAI J. KINARIWALA -------------------------------------------------------------- Appearance: MR MANISH R BHATT for Applicant No. 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

COMMON 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 (Appeals) 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 (Appeals) 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 (Appeals) 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.

Registry to place a copy of this order in all connected matters. [ D.A.MEHTA,J ] [ H.N.DEVANI,J ]

* * * 'Bhavesh'

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