MADANMOHAN MAMGALDAS vs. COMMISSIONER OF INCOME-TAX

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ITR/13/1990HC GujaratGJHC24013200199011 December 2002Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE K.M.MEHTA3 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court declined to answer the three questions referred to it. The reason for this decision was that the applicant-assessee was not represented by anyone, despite having been duly served with the notice of the Court. Consequently, the Court disposed of the Reference without making any determination on the merits of the questions raised. No specific finding was reached on whether the transaction constituted business income or long-term capital gain, nor was there any decision on the adverse inference drawn by the Tribunal or the nature of the land sale. The operative direction was to dispose of the reference, with no order as to costs.

What were the facts?

This case involves an Income Tax Reference filed by the assessee, Madanmohan Mangaldas, against the Commissioner of Income-Tax. The reference was made at the instance of the assessee, with three questions of law referred to the High Court by the Income Tax Appellate Tribunal, Ahmedabad Bench-"B". The assessment year(s) are not explicitly stated. The dispute concerns whether a transaction was a business transaction or an adventure in the nature of trade, giving rise to business income or long-term capital gain. The assessee was a businessman of long-standing and status, and land ceiling legislation was also a consideration. The procedural history involves the Tribunal's decision, which is being challenged via this reference.

What were the issues?

The High Court was asked to decide three questions at the instance of the assessee: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the transaction in question was not a business transaction or an adventure in the nature of trade and it did not give rise to business income, and the assessee was subject to tax on profits arising out of the transaction as long-term capital gain? 2. Whether the Tribunal erred in drawing an adverse inference on the basis that the appellant had not filed a copy of the statement recorded by the I.T.O. without putting the point to the appellant and overlooking that a copy of the statement was not furnished to him by the I.T.O. despite repeated requests? 3. Whether, on the facts and in the circumstances of the case and particularly bearing in mind that the appellant was a businessman of long-standing and status and bearing in mind the land ceiling legislation, the Tribunal ought to have held that the transaction of sale of land was on business account? The assessee's contentions are implicitly embedded in the questions referred, arguing that the transaction should be treated as long-term capital gain and not business income, and that the Tribunal erred in drawing adverse inferences. The revenue's contentions are not explicitly recorded as no one appeared for the assessee.

Which sections of the Income-tax Act were involved?

Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 13 of 1990

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE K.M.MEHTA

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

2.

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

4.

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?

5.

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

-------------------------------------------------------------- MADANMOHAN MAMGALDAS Versus COMMISSIONER OF INCOME-TAX -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 13 of 1990 NOTICE SERVED for Petitioner No. 1 MR TANVISH U BHATT for Respondent No. 1

--------------------------------------------------------------

CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE K.M.MEHTA

Date of decision: 11/12/2002

ORAL JUDGEMENT (Per : MR.JUSTICE A.R.DAVE)

At the instance of the assessee, three questions have been referred to this Court for its opinion under the provisions of Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") by the Income Tax Appellate Tribunal, Ahmedabad Bench-"B".

(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the transaction in question was not a business transaction or an adventure in the nature of trade and it did not give rise to business income and the assessee was subject to tax on profits arising out of the transaction as long-term capital gain?

(2) Whether, the Tribunal erred in drawing an adverse inference on the basis that the appellant had not filed a copy of the statement recorded by the I.T.O. without putting the point to the appellant and overlooking that a copy of the statement was not furnished to him by the I.T.O. despite repeated requests.

(3) Whether, on the facts and in the circumstances of case and particularly bearing in mind that the appellant was a businessman of long-standing and status and bearing in mind the land ceiling legislation the Tribunal ought to have held that the transaction of sale of land was on business account.

Learned Standing Counsel Shri Tanvish Bhatt has appeared for respondent no.

1.

Nobody has appeared for the applicant-assessee, though the applicant-assessee has been duly served with the notice of this Court.

Looking to the fact that the assessee has not been represented by anybody, we decline to answer the questions.

The Reference thus stands disposed of with no order as to costs.

(A.R. DAVE,J.)

(K.M. MEHTA,J.)

siji

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