PRINCIPAL COMMISSIONER OF IN vs. SHIRIDI ESTATES,

T.C.A.Nos.241 and 242 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 18.08.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.Nos.241 and 242 of 2021 Principal Commissioner of Income Tax, Non Corporate Circle - 22, Tambaram, Chennai - 600 045. ... Appellant in both TCAs Versus Shiridi Estates New No.32, Old No.28, Ramachandra Road, Nehru Nagar, Chromepet, Chennai - 600 044. PAN: AAAHS 8731E ... Respondent in TCA.No.241 of 2021 R.Vasanthi Ram Narayan ... Respondent in TCA.No.242 of 2021 Appeals preferred under Section 260A of the Income Tax Act, 1961, against the order dated 16.08.2017 passed by the Income Tax Appellate Tribunal, “A” Bench, Chennai, in I.T.A.Nos. 395 and 397/Mds/2017. For Appellant : Mr.Karthik Ranganathan Senior Standing Counsel Mr.Rajesh in both TCAs For Respondents : Mr.N.V.Balaji in both TCAs Page 1/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.241 and 242 of 2021

COMMON JUDGMENT (Judgment of the Court was delivered by R.MAHADEVAN, J.) These tax case appeals have been filed by the appellant / Revenue, challenging the common order dated 16.08.2017 passed by the Income Tax Appellate Tribunal, “A” Bench, Chennai, in I.T.A.Nos. 395 and 397/Mds/2017, relating to the assessment year 2007-08. 2. By order dated 30.03.2021, this court admitted the aforesaid tax case appeals on the following substantial questions of law: “(i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the income on sale of plots is to be assessed under the head 'capital gains' and not under the head 'business'? (ii) Whether the Tribunal is right in law in not appreciating the fact that the assessee was engaged in the business of buying land, incurring expenses towards development of the same and making the land into different sizes of plots? (iii) Whether the Tribunal erred in not appreciating the fact that the assessee was paying commission/service charges to the concern M/s.Tellus Avenue as principal agent relationship was existing between them i.e the activity of the assessee was business venture? Page 2/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.241 and 242 of 2021 (iv) Whether the Tribunal erred in not appreciating the fact that the intention of the assessee was to exploit the land by sub- dividing it into smaller plots and it was not purchased for the purpose of investment? (v) Whether the Tribunal erred in not appreciating the ratio of the decision in the cases of Raja J.Rameshwar Rao Vs.CIT [(1961) 42 ITR 179 (SC)]; and Indramani Bhai & another Vs. Additional CIT [(1993) 200 ITR 594 (SC)] wherein it was held that when a person acquires a land with a view of selling it later, after developing it, he is carrying on activity resulting in profit and the activity can only be described as business venture? and (vi) Whether, on the facts and in the circumstances of the case and law, the Tribunal erred in following their decision in the case of other land owners who were parties to the said development agreement

Shri

S.Vasanthakumar

2007-08 [ITA.No.1491/Mds/2010 dated 08.08.2012], common order dated 25.02.2014 in the case of Shri D.Gnanasekaran - AY 2009-10 (ITA.No.1380/Mds/2013] and Shri S.Sridharan - AY 2008-09 [ITA.No.1718/Mds/2013] when the facts are distinguishable?" 3. When the matters were taken up for consideration, the learned counsel 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 appeals shall not be filed/pursued by the Page 3/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.241 and 242 of 2021 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 these appeals is less than the threshold limit. 4. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. (R.M.D., J.) (M.S.Q., J.) 18.08.2022

Internet : Yes

Index : Yes / No av To 1. The Income Tax Appellate Tribunal, “A” Bench, Chennai. 2. The Principal Commissioner of Income Tax, Non Corporate Circle - 22, Tambaram, Chennai - 600 045. Page 4/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.241 and 242 of 2021