SRI.A.JANARDHANAN vs. THE COMMISSIONER OF INCOME TAX
What did the High Court hold?
The High Court, in its judgment, noted that the Tribunal had made an open remand without deciding any specific issue. The counsel for the assessee brought to the court's attention a batch decision of the Tribunal concerning other partners of the firm, which the High Court had affirmed. Consequently, the High Court disposed of the appeal by directing the Assessing Officer to consider the significance of the ITAT's decision in the case of the partners of Messrs. Mamatha Motels, as affirmed by the High Court. The court did not decide the taxability of the amount on merits but remanded the matter for reconsideration in light of the precedent. No specific issue was expressly left undecided, as the appeal was disposed of with a direction.
What were the facts?
During a search conducted at the premises of Shri. K.V. Ramakrishnan, it was discovered that the assessee, while serving as a branch manager of a scheduled bank, had invested money in a bar hotel under another person's name and was receiving income. This 'benami' arrangement involved the benamidar retiring from the firm, leading to the assessee receiving an amount of Rs. 6.5 lakhs, in addition to his Rs. 1 lakh share. The assessee contested the tax liability on the amount received upon the retirement of his benamidar, invoking Section 69 of the Income Tax Act. The Tribunal's order, under challenge, was an open remand without deciding any specific issue.
What were the issues?
1. Whether the amount received by the assessee upon the retirement of his benamidar from the firm, in excess of his share, is taxable under the Income Tax Act, particularly concerning Section 69. Assessee's Contention: The assessee argued that the amount received on the retirement of his benamidar should not be subject to tax liability, and implicitly relied on the principles governing Section 69. The assessee also brought to the High Court's notice a batch decision of the Income Tax Appellate Tribunal (ITAT) concerning other partners of the same firm, which was upheld by the High Court. Revenue's Contention: The revenue's contentions are not explicitly recorded in the judgment. However, the context implies that the revenue sought to tax the additional amount received by the assessee.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT Ramachandran Nair, J. Heard counsel for the appellant and standing counsel for the revenue. In the course of search conducted in the premises of Shri. K.V.Ramakrishnan it came to the notice that the assessee while working as a branch manager of a scheduled bank invested money in a bar hotel in the name of another person and he was in receipt of income. The binami was made to retire from the firm leading to receipt of an amount of 6.5 lakhs over the share of Rs.1 lakh towards share maintained by the assessee. The assessee contested the liability for taxes treating the amount received on retirement of his banami under Section 69 of the Act. What we find from the Tribunal's order is that they have made only an open remand without deciding any issue. The counsel for the assessee brought to our notice the batch decision of the Tribunal in the case of other partners of the firm which is today upheld by us (ITA Nos: 474/2009 etc). In the circumstances, we dispose of the appeal directing the Assessing Officer to take into account the significance of the decision of the Tribunal in the case of partners of Messrs. Mamatha Motels affirmed by us. Appeal is disposed of as above.
C.N.RAMACHANDRAN NAIR Judge K. SURENDRA MOHAN Judge jj
More judgments on Section 69
- Azure Knowledge Corporation Private… vs The Dy.CIT, Circle-1(1)(1), AhmedabadITA 2013/AHD/2024[2018-19]Status: Disposed19 Oct 2026AY 2018-19
- Naresh Chandra Khattar, Agra vs ITO Ward-1(1)(2), AgraITA 475/AGR/2026[2019-20]Status: Disposed16 Oct 2026AY 2019-20
- Ranchhodbhai Kurjibhai Kakadiya, Rajkot vs Income Tax Officer, Ward-1(1)(1), RajkotITA 553/RJT/2025[2019-20]Status: Disposed16 Oct 2026AY 2019-20
- Gorantla Rahul Kumar, Visakhapatnam vs The Asst. Commissioner of Income Tax…ITA 670/VIZ/2025[2021-22]Status: Disposed16 Oct 2026AY 2021-22
- Gorantla Rahul Kumar, Visakhapatnam vs The Asst. Commissioner of Income Tax…ITA 669/VIZ/2025[2020-21]Status: Disposed16 Oct 2026AY 2020-21
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