COMMISSIONER OF INCOME-TAX vs. MEHMOODMIAN A TOPIWALA

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ITR/15/1986HC GujaratGJHC24010642198611 January 2001Author: HONOURABLE MR. JUSTICE J.M.PANCHAL,HONOURABLE MR. JUSTICE MOHIT S. SHAH3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the conditions mentioned in Section 64(1)(iii) of the Income-tax Act, 1961, were satisfied. The Court followed its own prior decision in CIT vs. Mehmoodmian A. Topiwala (1995) 213 ITR 615, which had found the provisions of Section 64 applicable in a similar case involving the same assessee for assessment year 1975-75. The Court found no distinguishing features presented by the assessee to warrant a different view. Consequently, the High Court concluded that the case was indeed one of cross-transfer, making Section 64 applicable to the interest payment of Rs. 8,453 made by the assessee to his wife. The Income-tax Officer was therefore justified in invoking these provisions. The questions referred to the Court were answered in favour of the revenue and against the assessee.

What were the facts?

This Indian Income Tax Appellate Tribunal (ITAT) judgment concerns the assessment year 1981-82. The reference was made at the instance of the revenue (Commissioner of Income-tax) against the assessee, Mehmoodmian A. Topiwala. The dispute revolves around the applicability of Section 64 of the Income-tax Act, 1961, to an interest payment of Rs. 8,453 made by the assessee to his wife. The ITAT's decision was based on its prior rulings in other appeals concerning the same controversy. The High Court noted that its own previous decision in CIT vs. Mehmoodmian A. Topiwala (1995) 213 ITR 615 had dealt with a similar issue for assessment year 1975-75, finding Section 64(1)(iii) applicable.

What were the issues?

1. Whether the Tribunal erred in law and on facts by upholding the Appellate Commissioner's view that Section 64 of the Income-tax Act, 1961, was not applicable to the interest payment of Rs. 8,453 made by the assessee to his wife? 2. Whether the Tribunal erred in law and on facts by not accepting the Income-tax Officer's view that this was a case of cross-transfer in favour of the assessee's wife, thus justifying the invocation of Section 64 of the Income-tax Act, 1961? Assessee's Contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, the Tribunal's earlier decision, which was being reviewed, had held Section 64 not applicable. Revenue's Contentions: The revenue contended that the provisions of Section 64 were applicable, as it was a case of cross-transfer in favour of the assessee's wife. The revenue relied on the High Court's previous decision in CIT vs. Mehmoodmian A. Topiwala (1995) 213 ITR 615.

Which sections of the Income-tax Act were involved?

Section 64,Section 64(1)(iii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 15 of 1986

For Approval and Signature:

Hon'ble MR.JUSTICE J.M.PANCHAL and Hon'ble MR.JUSTICE M.S.SHAH

============================================================ 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 Civil Judge? : NO -------------------------------------------------------------- COMMISSIONER OF INCOME-TAX Versus MEHMOODMIAN A TOPIWALA -------------------------------------------------------------- Appearance: MR AKIL QURESHI FOR MR MANISH R BHATT for Petitioner MR RD PATHAK for Respondent No. 1

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

CORAM : MR.JUSTICE J.M.PANCHAL and MR.JUSTICE M.S.SHAH

Date of decision: 11/01/2001

ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH)

In this reference at the instance of the revenue, the following questions are referred to us in respect of assessment year 1981-82 :-

1.

Whether, the Tribunal has not erred in law and on facts in confirming the view taken by the AAC in holding that Sec. 64 of the Income-tax Act, 1961 was not applicable in respect of the interest payment of Rs.8,453/- made by the assessee to his wife ?

2.

Whether, the Tribunal has not erred in law and on facts in not accepting the view taken by the ITO that this was a case of cross transfer, in favour of the assessee's wife and hence provisions of section 64 of the Income-tax Act, 1961 were rightly invoked ?

2.

The reference arose from the decision dated 13..6.1985 of the Income-tax Appellate Tribunal in ITR No. 2447/Ahd/1984. The Tribunal disposed of the said appeal in favour of the assessee on the basis of its decisions dated 25.8.1980 and 14.11.1983 in ITA Nos. 604 and 606 of 1983 respectively in respect of this very controversy centering around the cross transfer in favour of the assessee's wife. The said decisions came up for satisfied and, therefore, the Income-tax Officer was justified in adding the amount of interest paid by the wife to the income of the assessee while working out the assessee's income for assessment year 1975-75. No distinguishing features are pointed out on behalf of the assessee to take a different view.

3.

Following the aforesaid decision, we hold that this was a case of cross transfer and, therefore, the provisions of Section 64 of the Income-tax Act, 1961 were applicable in respect of the interest payment of Rs.8,453/- made by the assessee to his wife and that the Income-tax Officer had rightly invoked the aforesaid provisions. We accordingly answer the questions referred to us in favour of the revenue and against the assessee.

The reference accordingly stands disposed of with no order as to costs.

(J.M. Panchal, J.)

(M.S. Shah, J.)

sundar/-

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