COMMISSIONER OF INCOME TAX vs. AVANIBEN B. KINARIWALA

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ITA/223/1998HC GujaratGJHC24024261199809 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 held that questions of law arose out of the order of the Income Tax Appellate Tribunal, particularly in light of a Supreme Court order dated March 22, 2004. Consequently, the High Court directed the ITAT to draw up a statement of case and refer these questions of law for the opinion of the High Court. The Court made the rule absolute, indicating that the applications for reference were granted. The judgment does not provide findings on the merits of the issues themselves, as it is an order directing the referral of these issues to the High Court for adjudication. The operative direction is for the ITAT to prepare and submit the statement of case. No issues were expressly left undecided by the High Court, as its decision was limited to the referral process.

What were the facts?

This judgment concerns Income Tax Application Nos. 223, 225, and 226 of 1998, filed by the Commissioner of Income Tax (the revenue) against Avaniben B. Kinariwala (the assessee). The applications seek to refer questions of law arising from an order of the Income Tax Appellate Tribunal (ITAT) for the opinion of the High Court. The High Court, in its common oral judgment dated December 9, 2004, considered the implications of a Supreme Court order dated March 22, 2004, in related review petitions and civil appeals. The High Court directed the ITAT to draw up a statement of case and refer the identified questions of law to the High Court. The rule was made absolute, and the registry was instructed to place a copy of the order in all connected matters.

What were the issues?

The High Court was asked to consider four questions of law arising from the ITAT's order, which were to be referred for its opinion: 1. Whether the ITAT was correct in law and fact in confirming the CIT(A)'s order 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 law and fact in confirming the CIT(A)'s order to exclude the income of the wife under Section 64(1)(i) of the Income Tax Act, 1961. 3. Whether the ITAT was correct in law and fact in deleting the inclusion of the income of six Business of Individuals (BOIs) in the total income of the assessee. 4. Whether the ITAT ought to have appreciated that the entire transaction, occurring between November 30, 1984, and December 26, 1984, was solely for the purpose of evading taxes. The revenue, represented by Mr. M.R. Bhatt, argued for the referral of these questions. The assessee, represented by Mrs. Swati Soparkar, did not present arguments on the merits of these questions in this specific High Court proceeding, as the focus was on the referral itself. The judgment does not record specific contentions from the assessee regarding these questions at this stage.

Which sections of the Income-tax Act were involved?

64(1)(i)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX APPLICATION No.223 of 1998 WITH INCOME TAX APPLICATION No.225 of 1998 WITH INCOME TAX APPLICATION No.226 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 AVANIBEN B. 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 (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 wife under Section 64(1)(i) ?"

"Whether, the Appellate Tribunal is right in law and on facts in deleting the inclusion of the income of the six BOIs in the total income of the assessee ?"

"Whether, the Appellate Tribunal ought not to have appreciated that the entire transaction was created between 30.11.1984 to 26.12.1984 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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