COMMISSIONER OF INCOME-TAX vs. KHIMCHAND CHHAGANLAL

ITR/353/1984HC GujaratGJHC24012018198428 April 1999Author: HONOURABLE MR. JUSTICE R.BALIA,HONOURABLE MR. JUSTICE ANIL R. DAVE2 pages
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What did the High Court hold?

The High Court of Gujarat, following its own decisions in the assessee's own case for earlier assessment years (ITR 419/80 & 402/82, decided on 20.4.93), and the precedent set in CIT vs. Nandini Narrotamdas (140 ITR Page 16), answered the referred question in the affirmative. This means the High Court upheld the ITAT's finding that the share income from the specified firms was not includible in the assessee's total income under Section 60 of the Income-tax Act, 1961. The ratio decidendi is that the established legal position, as per the cited precedents concerning the non-includibility of such income under Section 60, should be applied. The operative direction is that the reference stands disposed of in favour of the assessee and against the Revenue. No costs were awarded.

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Ahmedabad, referred a question of law to the High Court of Gujarat concerning the assessment year 1977-78. The dispute involved the includibility of share income from three firms: M/s. Vadilal Khimchand, M/s. Khimchand Natverlal & Co. (Ratanpole), and M/s. Khimchand Natverlal & Co. in the assessee's total income. The Commissioner of Income-tax (Revenue) is the petitioner, and Khimchand Chhaganlal is the respondent assessee. The ITAT had previously held that this share income was not includible in the assessee's total income under Section 60 of the Income-tax Act, 1961. The procedural history indicates this is a reference arising from an appellate order of the ITAT.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the finding of the appellate tribunal that share income from M/s. Vadilal Khimchand, M/s. Khimchand Natverlal & Co. (Ratanpole), and M/s. Khimchand Natverlal & Co. is not includible in the assessee's total income under Section 60 of the Income-tax Act, 1961, is correct in law? Assessee's Contention: The judgment does not record any specific arguments made by the assessee. However, it notes that in the assessee's own case for earlier assessment years, the question was answered in favour of the assessee. The assessee relies on the decision of CIT vs. Nandini Narrotamdas (140 ITR Page 16). Revenue's Contention: The judgment does not record any specific arguments made by the Revenue. It notes that the question has been answered in the negative (in favour of the assessee) in the assessee's own case for earlier years, following the cited precedent.

Which sections of the Income-tax Act were involved?

Section 60

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 353 of 1984

For Approval and Signature:

Hon'ble MR.JUSTICE R.BALIA. and MR.JUSTICE A.R.DAVE ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question 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?

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The order continues below.

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