PRINCIPAL COMMISSIONER OF vs. SHRI NATHAMUNI KRISHNASWAMY

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TCA/235/2018HC Madras26 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. The learned counsel for the appellant/Revenue brought to the court's notice CBDT Circular No. 17/2019, which stipulates that appeals shall not be filed or pursued before the High Court if the tax effect does not exceed Rs. 1,00,00,000/-. It was submitted that the tax effect in this appeal was below this threshold limit. Consequently, in light of the submission regarding the tax effect being less than the monetary limit, the present appeal was dismissed as withdrawn. The court explicitly stated that the substantial questions of law were kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax-6, Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 01.09.2017 passed by the Income Tax Appellate Tribunal (ITAT), Madras 'D' Bench. The appeal pertained to assessment year 2010-11 and challenged the ITAT's decision regarding wealth tax exemption. The assessee is Shri. Nathamuni Krishnaswamy Balaji. The procedural history involves the ITAT passing an order which the Revenue is now challenging before the High Court. The specific dispute revolves around the classification of residential units and the nature of land for tax purposes.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal was correct in granting exemption under Section 5 of the Wealth Tax Act by treating both the ground floor and first floor flats as a single residential unit. 2. Whether the ITAT correctly arrived at its decision when the assessee claimed the structure as one indivisible unit for wealth tax purposes but treated it as two independent flats for income tax purposes, claiming deduction under Section 54F for investment in the first-floor flat. 3. Whether, on the facts and circumstances, the ITAT was correct in concluding that the land in question was agricultural in nature, despite Village Administrative Officer records indicating no agricultural activity. The Revenue's contentions are implicit in the questions of law raised. The judgment does not record specific arguments made by the assessee.

Which sections of the Income-tax Act were involved?

Section 260A,Section 5,Section 54F

AI-generated summary — verify with the full judgment below

T.C.A.No.235 of 2018 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.08.2022 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.235 of 2018 The Principal Commissioner of Income Tax-6, No.121, Mahatma Gandhi Road, Chennai. ... Appellant Versus Shri.Nathamuni Krishnaswamy Balaji, Upanishad, Flat No.SF II, No.90/10, South Mada Street, Thiruvanmiyur, Chennai - 600 041. ... Respondent (PAN No.AADPB 4191 N) Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras “D” Bench, dated 01.09.2017 in WTA No.17/Mds/2017. For Appellant : M/s.M.Swaminathan &

S.Premalatha Standing Counsel Page 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.235 of 2018 J U D G M E N T (Judgment was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 01.09.2017 passed by the Income Tax Appellate Tribunal, Madras 'D' Bench in W.T.A.No.17/Mds/2017, relating to the assessment year 2010-11, by raising the following substantial questions of law:- "(i) Whether the Tribunal was correct in granting exemption under Section 5 of the Wealth Tax Act treating both the ground floor and first floor flats as one residential unit? (ii) Whether the ITAT was correct in arriving at its decision, even though the assessee had claimed the structure as one single indivisible unit for the purpose of WT and the same building comprising two independent flats for the purpose of IT Act and claimed a deduction under Section 54 F for investment in the first floor flat? (iii) Whether on the facts and in the circumstances of the case, the ITAT was correct in arriving at its decision that land in question was agriculture in nature, even though the records of the Village Administrative Officer indicated that no agricultural activity has been carried out on the land?" 2. When the matter was taken up for consideration, the learned counsel Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.235 of 2018 for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeal shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in this appeal is less than the threshold limit. 3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs. (R.M.D., J.) (M.S.Q., J.) 26.08.2022 r n s

Internet : Yes.

Index : Yes / No. Page 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.235 of 2018 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. r n s To 1. The Income Tax Appellate Tribunal Madras 'D' Bench, Chennai. 2. The Commissioner of Income Tax (Appeals)-15, Chennai. 3. The Income Tax Officer, Non-Corporate Ward 15(1), Chennai. T.C.A.No.235 of 2018 26.08.2022 Page 4/4 https://www.mhc.tn.gov.in/judis

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