REJI ABRAHAM vs. THE DEPUTY COMMISSIONER OF I

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TCA/349/2019HC Madras24 June 2019Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the assessee had filed a miscellaneous petition before the ITAT, and on instructions from the assessee's counsel, it was submitted that the ITAT had recalled its order dated September 11, 2018, in M.P.No.227/Chny/2018. Consequently, the High Court held that nothing survived for consideration in the present appeal. The substantial questions of law were left open. The operative direction was to dismiss the Tax Case Appeal and close the connected miscellaneous petition without costs.

What were the facts?

The assessee, Reji Abraham, filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order passed by the Income Tax Appellate Tribunal (ITAT), Chennai "C" Bench, dated September 11, 2018, for the assessment year 2014-15. The appeal concerns the taxability of compensation received by the appellant on behalf of erstwhile shareholders of M/s. Aban Constructions P Limited from a joint venture account. The amount in dispute is not explicitly stated. The procedural history indicates that the assessee filed a miscellaneous petition before the ITAT, seeking recall of the impugned order. The ITAT subsequently recalled its order dated September 11, 2018.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the compensation received by the appellant on behalf of erstwhile shareholders of M/s. Aban Constructions P Limited from the joint venture account was correctly held to be 'taxable income' in the hands of the appellant, considering alleged perverse findings of fact in paragraph 9.2 of the impugned order (Section 2(24) of the Income Tax Act, 1961). 2. Whether the compensation was correctly taxed in the hands of the appellant without determining the appellant's taxable status concerning such sum (Section 4 of the Income Tax Act, 1961). 3. Whether the compensation should be assessed in the status of an Association of Persons (AOP) comprising the erstwhile shareholders, including the appellant, based on the executed legal document, within the scope of Section 67A of the Act. Assessee's Contentions: The assessee argued that the compensation received was wrongly held as taxable income due to perverse findings of fact and that the taxable status of the appellant was not determined. The assessee also contended that the compensation should be assessed in the status of an AOP. The assessee relied on the legal document executed in relation to the compensation. Revenue's Contentions: The judgment does not record any specific contentions made by the Revenue.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 2(24),Section 4,Section 67A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 12.06.2019 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case No.349 of 2019 & C.M.P.No.12137 of 2019 Reji Abraham ...Appellant -vs- The Deputy Commissioner of Income Tax, Corporate Circle – 1(1), Chennai – 600 034. ...Respondent Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961, directed against the order passed by the Income Tax Appellate Tribunal, Chennai “C” Bench, in I.T.A No.1133/Chny/2018, dated 11.09.2018 for the assessment year 2014-15. For appellant : Mr.A.S.Sriraman For Respondent : Mr.T.Ravi Kumar Senior Standing Counel ****** http://www.judis.nic.in 2 JUDGEMENT [Judgement of the Court was delivered by T.S.Sivagnanam, J.] This Tax Case Appeal by the assessee filed under Section 260-A of the Income Tax Act, 1961, ('the Act' for brevity) is directed against the order passed by the Income Tax Appellate Tribunal, Chennai “C” Bench, in I.T.A No.1133/Chny/2018, dated 11.09.2018 for the assessment year 2014-15. 2.The above Tax Case Appeal has been filed raising the following substantial question of law:- “(i) Whether the compensation received by the appellant on behalf of the erstwhile share holders of M/s.Aban Constructions P Limited from the joint venture account was correctly held to be 'taxable income' in the hands of the appellant while recording perverse findings of facts at para 9.2 of the impugned order? (ii) Whether the compensation received by the appellant on behalf of the erstwhile share holders of M/s.Aban Constructions P Limited from the joint venture account was correctly taxed in the hands of the appellant without recording the findings as to the taxable status of appellant with reference to such sum? (iii) Whether the compensation received should http://www.judis.nic.in 3 be assessed in the status of AOP comprised of the erstwhile share holders of M/s.Aban Constructions P Ltd including the appellant based on the legal document executed in relation thereto within the scope of Section 67A of the Act?” 3. We have heard Mr.A.S.Sriraman, learned counsel for the appellant/assessee and Mr.T.Ravi Kumar, learned Senior Standing Counsel for the respondent/Revenue. 4. The learned counsel appearing for the appellant/assessee on instructions submitted that in a miscellaneous petition filed by the assessee before the Tribunal in M.P.No.227/Chny/2018, dated 22.03.2019, the order impugned before us passed by the Tribunal dated 11.09.2018 has been recalled by the Tribunal. 5. In the light of the above, nothing survives for the consideration in this appeal. Accordingly, the above Tax Case Appeal is dismissed and the substantial questions of law are left open. No costs. Consequently, the connected miscellaneous petition is closed. (T.S.S., J.) (V.B.S., J.) mrm 12.06.2019 Index: Yes/No http://www.judis.nic.in 4

T.S.Sivagnanam, J. and V.Bhavani Subbaroyan, J. mrm To Income Tax Appellate Tribunal, Chennai “C” Bench Tax Case No.349 of 2019 & C.M.P.No.12137 of 2019 12.06.2019 http://www.judis.nic.in

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