M K S RANJITSINHJI vs. COMMISSIONER OF INCOME TAX

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ITR/40/1984HC GujaratGJHC24011715198429 June 1998Author: HONOURABLE MR. JUSTICE C.K.THAKKER,HONOURABLE MR. JUSTICE M.C.PATEL2 pages

AI SummaryAllowed

What did the High Court hold?

The High Court answered the referred question in the negative and in favour of the assessee. The reasoning is based on a prior decision of the same High Court in a similar case involving the same assessee for different assessment years. In that earlier judgment, the Court had held that the cash annuity in lieu of the resumption of villages for life was a capital receipt. Since the revenue's counsel did not dispute this precedent, the Court found no reason to deviate from its earlier finding. Therefore, the Tribunal was not justified in not holding the cash annuity as a capital receipt. The operative direction is to answer the question in favour of the assessee. No order as to costs was made.

What were the facts?

These three Income Tax References (Nos. 40 of 1984, 68 of 1986, and 121 of 1986) were made by the Income Tax Appellate Tribunal, Ahmedabad Bench, at the instance of the same assessee, M.K.S. Ranjitsinhji. The references pertain to different assessment years. The core issue in all references is whether a cash annuity received by the assessee in lieu of the resumption of two villages for his lifetime should be treated as a capital receipt. The assessee is challenging the Tribunal's decision on this matter.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Income-Tax Appellate Tribunal was justified in not holding the cash annuity in lieu of the resumption of two villages for life time as a capital receipt? This is a question of law. The assessee's contention, as presented by their learned counsel, is that the cash annuity should be treated as a capital receipt. The revenue's learned counsel does not dispute the position taken by the assessee. The assessee relies on a previous judgment of the Gujarat High Court in CIT, Rajkot vs. M.S.S. Ranjitsinghji (Income Tax Reference No. 195 of 1982 with Income Tax Reference No. 326 of 1983) which answered this very question in favour of the assessee for assessment years 1973-74 and 1975-76.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 40 of 1984

WITH INCOME TAX REFERENCE NO 68 of 1986

WITH INCOME TAX REFERENCE NO 121 of 1986

For Approval and Signature:

Hon'ble MR.JUSTICE C.K.THAKKER and MR.JUSTICE M.C.PATEL ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

To be referred to the Reporter or not?

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

Whether this case involves a substantial question 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 Civil Judge?

-------------------------------------------------------------- M K S RANJITSINHJI Versus COMMISSIONER OF INCOME TAX -------------------------------------------------------------- Appearance: MR RK PATEL for Petitioner MR P.G.DESAI With MANISH R BHATT for Respondent No. 1

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

CORAM : MR.JUSTICE C.K.THAKKER and MR.JUSTICE M.C.PATEL Date of decision: 29/06/98

ORAL JUDGEMENT (Per M.C.Patel, J) These three references have been made by the Income Tax Appeallate Tribunal, Ahmedabad Bench at the instance of the same assessee in respect of three different assessment yers. In all the references, the question referred for the opinion of this court is the same which is as follows :-

"On the facts and circumstances of the case, whether the Income-Tax Appellate Tribunal was justified in not holding the cash annuity in lieu of resumption of two villages for life time as capital receipt?"

The Learned Counsel for the assessee has drawn respect of assessment years 1973-74 and 1975-76. The Learned Counsel for the Revenue does not dispute this position. In view of the said decision of this court, the question referred in the present group of references has to be answered in favour of the assessee.

The question is therefore answered in the negative and in favour of the assessee. No order as to costs.

(C.K.Thakker, J)

(M.C.Patel, J) jitu

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