DR. AJIT T. KOSSAMBE vs. COMMISSIONER OF INCOME TAX
What did the High Court hold?
The High Court held that the authorities below had failed to apply their mind to the crucial aspect of whether the appellant received a sum of Rs. 2,90,000/- in the financial year ending March 31, 2000, as part consideration for the sale of his flat. The Court noted that this aspect was not minutely examined while passing the impugned orders. The Court also observed that the respondent's counsel was unable to point out that the material highlighted by the appellant's counsel was scrutinized by the Tribunal. Without delving into the merits of the rival submissions, the Court found it appropriate to remand the matter back to the ITAT for a fresh decision. The substantial question of law was answered accordingly. The impugned order of the ITAT was quashed and set aside, and the appeal was restored to the ITAT's file for a fresh hearing. All rival contentions on merits were kept open.
What were the facts?
The assessee, Dr. Ajit T. Kossambe, is appealing against an order of the Income Tax Appellate Tribunal (ITAT) concerning assessment year 2000-2001. The Assessing Officer had made an additional assessment of Rs. 2,66,000/-. The Commissioner of Income Tax (Appeals) had allowed the assessee's appeal and remanded the matter to the Assessing Officer to reconsider the additional assessment, noting that Rs. 2,66,000/- might not pertain to the concerned assessment year. The assessee contended that he received Rs. 2,90,000/- as part payment for the sale of his flat in the financial year ending March 31, 2000. The assessee argued that this fact was ignored by the authorities below. The High Court admitted the appeal on a substantial question of law.
What were the issues?
1. Whether the authorities below erred in law by ignoring the fact that the appellant received a sum of Rs. 2,90,000/- as part payment for the sale of his flat during the financial year ending March 31, 2000 (turning on the interpretation of when income accrues or is received for tax purposes)? Assessee's contentions: The appellant argued that the sum of Rs. 2,90,000/- was received in the financial year ending March 31, 2000, as part consideration for the sale of his flat. He claimed to have provided a specific explanation and satisfactory evidence for the source of this income. The appellant contended that the Assessment Officer, Commissioner (Appeals), and the ITAT failed to consider this crucial aspect while passing their orders. The appellant relied on the agreement to sell the flat as evidence of receiving part consideration in the said year. The appellant argued for a remand to the ITAT for a fresh consideration of this aspect. Revenue's contentions: The respondent supported the impugned order. The revenue pointed out that the appellant's claim of receiving Rs. 1.00 lakh by cash for the financial year ending March 31, 1999, was not accepted by the authorities due to a lack of cogent evidence. The revenue argued that there was no explanation regarding the receipt of Rs. 2,90,000/- for the financial year ending March 31, 2000, as part of the agreement consideration, and therefore, no interference with the impugned order was warranted.
Which sections of the Income-tax Act were involved?
None explicitly mentioned in the provided text, other than the general reference to the Income Tax Act and assessment years.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL JUDGMENT (PER F. M. REIS, J): Heard Mr. Sudin Usgaonkar, learned counsel appearing for the appellant and Mrs. Asha Dessai, learned counsel appearing for the respondent. The above appeal came to be admitted by an order dated 26/9/2007 on the following substantial question of law:
2 TXA 57 2007 “All the Authorities below erred in law to utterly ignore the well-evidenced fact that during the Assessment year 2000-2001, the appellant had received a sum of Rs.2,90,000/- towards part payment of consideration for the sale of his flat.”
Mr. Sudin Usgaonkar, learned counsel appearing for the appellant in support of the said substantial question of law has pointed out that the Assessment Officer had taken a view that there was an additional assessment to the extent of Rs.2,66,000/- in respect of the assessment year 2000-2001 by an order dated 28/2/2006. The appellant thereafter preferred an appeal before the Commissioner of Income Tax (Appeals) which came to be allowed by remanding the matter back to the Assessment Officer to consider the said additional assessment afresh taking into account that the sum of Rs.2,66,000/- was not pertaining to the concerned assessment year. The learned counsel has thereafter taken us through the order of the Assessment Officer as well as to the order of the Income Tax Appellate Tribunal to point out that it was the case of the appellant that the sum of Rs.2,90,000/- was part of the consideration received by the appellant pursuant to the transaction to sell a flat situated at Ponda. The learned counsel further points out that there was a specific explanation given
3 TXA 57 2007 by the appellant in reply to the notice issued by the assessment officer to the effect that a sum of Rs.2,90,000/- was in fact received by the appellant in the financial year ending 31/3/2000. The learned counsel has further pointed out that the only aspect as such was to examine whether the appellant was in a position to satisfy the income for the financial year 1999-2000 of the said sum of Rs.2,66,000/-, which was received as part consideration. The learned counsel has thereafter taken us through the orders of the Commissioner as well as the Income Tax Appellate Tribunal to point out that this aspect has not at all been considered by both the authorities whilst passing the impugned order. The learned counsel further points out that even in terms of the agreement to sell the flat the part consideration of a sum of Rs.2,90,000/- was received in the said year. The learned counsel further points out that the appellant had satisfactorily explained the source of his income from the sale of the flat on the basis of the material on record which was not examined by the Tribunal and therefore in the interest of justice, it would be appropriate to remand the matter back to the ITAT. The learned counsel thereafter minutely took us through the order of the Assessment Officer as well as the Appellate Authority to point out the fact that the appellant had received a sum of Rs.2,90,000/- in the financial year ending
4 TXA 57 2007 31/3/2000 has not at all been examined by the authorities whilst passing the impugned orders.
On the other hand, Mrs Asha Dessai, learned counsel appearing for the respondent has supported the impugned order. The learned counsel points out that it is the case of the appellant that Rs.1.00 lakh was received by cash for the financial year ending 31/3/1999, which the authorities have not at all accepted. The learned counsel has taken us through the order of the Assessment Officer to point out that this aspect has not been explained by the appellant by producing any cogent evidence. The learned counsel further points out that in such circumstances the question of interference with the impugned order of the authorities would not arise. Learned counsel further points out that there is no explanation with regard to the receipt of the amount of Rs. 2,90,000/- for the financial year ending 31/3/2000 being part of the consideration of the said agreement.
We have carefully considered the submissions of the learned counsel and with the assistance of the learned counsel for the parties, we have gone through the orders of authorities below. There is no application of mind by the authorities below on the aspect that 5 TXA 57 2007 a sum of Rs.2,90,000/- was in fact received by the appellant in the financial year ending on 31/3/2000 towards part of the consideration for the sale of the old flat by minutely examining the effect thereof while passing the impugned orders. The authorities have failed to examine the said aspect, and as such, they were not justified to come to the conclusion that the addition of Rs.2,66,000/- is to be effected. The learned counsel for the respondent also was unable to point out that the material pointed out by Shri Usgaonkar, the learned counsel for the appellant was scrutinized by the learned Tribunal while passing the impugned order. Without going into the merits of the rival submissions, we find it appropriate to remand the matter back to the ITAT to decide the appeal afresh, in accordance with law. The substantial question of law is answered accordingly.
In view of the above, we pass the following order : (a) The impugned order dated 15/2/2007 passed by the Income Tax Appellate Tribunal in ITAT No.206/PNJ/2006 is quashed an set aside. The appeal is restored to the file of the ITAT. (b) The ITAT is directed to decide the appeal afresh after hearing both the parties in accordance with law. (c ) In the light of the observations made herein above, all the 6 TXA 57 2007 rival contentions of the parties on merits are kept open. The appeal stands disposed off accordingly. U. V. BAKE, J. F. M. REIS, J. Ap/-
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