PRINCIPAL COMMISSIONER OF IT vs. M/S.KIRTHIDHARA INFRASTRUCTU

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TCA/423/2020HC Madras05 January 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM6 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the assessee had filed a declaration under the Vivad Se Vishwas Scheme on 30.12.2020 and was awaiting orders. In light of this subsequent event, the Court directed the Competent Authority to process the declaration under the Direct Tax Vivad Se Vishwas Act, 2020, and pass appropriate orders expeditiously. The Tax Case Appeal was disposed of with liberty granted to the assessee to restore the appeal if the decision on their declaration under the Vivad Se Vishwas Act was not in their favour. Consequently, the substantial questions of law framed by the Revenue were left open and not decided on merits. No costs were awarded.

What were the facts?

The Revenue (Principal Commissioner of Income Tax) appealed against an order of the Income Tax Appellate Tribunal (ITAT) for the assessment year 2009-10. The appeal was filed under Section 260A of the Income Tax Act, 1961. The assessee is M/s. Kirthidhara Infrastructure Pvt. Ltd. The core of the dispute involved the classification of a capital asset (vacant land) sold by the assessee and its tax implications. The ITAT had previously ruled in favour of the assessee. During the pendency of the appeal before the High Court, the assessee filed a declaration under the Vivad Se Vishwas Scheme, indicating a subsequent event that impacted the proceedings.

What were the issues?

1. Whether the ITAT's decision that the vacant land sold by the assessee was agricultural land as defined under Section 2(14)(iii) of the Income Tax Act was perverse? 2. Whether the ITAT was correct in holding that the transfer of the capital asset did not attract the provisions of Section 45(1) of the Income Tax Act? 3. Whether the ITAT was right in following the rationale of the jurisdictional High Court's decision in PCIT vs. Shri A. Lalichan (TCA.No.504 of 2018)? 4. Whether the ITAT was correct in confirming the income declared by the assessee as agricultural income without considering the criteria laid down by Section 2(1A) of the Income Tax Act? Assessee's contention: The assessee submitted that they had filed a declaration under the Vivad Se Vishwas Scheme on 30.12.2020 and were awaiting orders. Revenue's contention: The Revenue raised the substantial questions of law as stated above, challenging the ITAT's findings on the nature of the land and the applicability of capital gains provisions.

Which sections of the Income-tax Act were involved?

Section 260A,Section 2(14)(iii),Section 45(1),Section 2(1A)

AI-generated summary — verify with the full judgment below

TCA.No.423 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 05.01.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Ms.Justice R.N.MANJULA Tax Case Appeal No.423 of 2020 Principal Commissioner of Income Tax, Corporate Circle-2(2), Nungambakkam, Chennai - 600 034. ...Appellant Vs M/s.Kirthidhara Infrastructure Pvt. Ltd., 4/318, Marg Axis, Rajiv Gandhi Salai, Kottivakkam, Chennai - 600 041. PAN: AADCK0873D ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 12.06.2019 made in ITA.No.2584/Chny/2017 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench for the assessment year 2009-10. For Appellant: Mr.R.Karthik Ranganathan Senior Standing Counsel For Respondent: Mr.Ashok Pathy for M/s.Pass Associates 1/6 https://www.mhc.tn.gov.in/judis/ TCA.No.423 of 2020 JUDGMENT (Delivered by

T.S.Sivagnanam,J

) This appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) is directed against the order dated 12.06.2019 made in ITA.No.2584/Chny/2017 passed by the Income Tax Appellate Tribunal, Madras 'B' Bench ('the Tribunal' for brevity) for the assessment year 2009-10. 2. The appellant has raised the following substantial questions of law for consideration: “1. Whether on the facts and the circumstances of the case and in law, the decision of the Hon'be Income Tax Appellate Tribunal is perverse in holding that the capital asset (Vacant Land) sold by the assessee was agricultural land defined under section 2(14)(iii) of the IT Act? 2. Whether on the facts and the circumstances of the case and in law, the Hon'be Income Tax Appellate Tribunal is right in holding that the transfer of Capital Asset will not attract the provisions of section 45(1)? 3. Whether on the facts and circumstances 2/6 https://www.mhc.tn.gov.in/judis/ TCA.No.423 of 2020 of the case and in law, the Hon'ble Income Tax Appellate Tribunal is right in following the rationale of the decision of the Jurisdictional High Court in the case of PCIT6 Vs. Shri A.Lalichan in TCA.No.504 of 2018 dated 11.10.2018? 4. Whether on the facts and the circumstances of the case and in law, the Hon'be Income Tax Appellate Tribunal is right in confirming the income declared by the assessee as agricultural inocme without considering the criteria laid down by virtue of section 2(1A)?" 3. We have heard Mr.Karthik Ranganathan, learned Senior Standing Counsel appearing for the appellant/Revenue and Mr.Ashok Pathy, learned counsel appearing for the respondent. 4. The learned counsel appearing on behalf of the respondent/ assessee submits that the respondent/assessee has already filed the declaration/undertaking under the Vivad Se Vishwas Scheme on 30.12.2020 and is awaiting orders to be passed in Form No.3. 3/6 https://www.mhc.tn.gov.in/judis/ TCA.No.423 of 2020 5. In the light of the subsequent event, the Competent Authority shall process the application/declaration in accordance with the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) and pass appropriate orders as expeditiously as possible. The assessee is given liberty to restore this appeal in the event the ultimate decision to be taken on the declaration filed by the assessee under Section 4 of the said Act is not in favour of the assessee. If such a prayer is made, the Registry shall entertain the prayer without insisting upon any application to be filed for condonation of delay in restoration of the appeal and on such request made by the assessee by filing a miscellaneous petition for restoration, the Registry shall place such petition before the appropriate Division Bench for orders. 6. The tax case appeal stands disposed of with the aforementioned liberty and consequently, the substantial questions of law framed are left open. No costs. (T.S.S.,J.) (R.N.M.,J.) 05.01.2021 Index: Yes/No Internet:Yes/No Speaking Judgment/Non speaking Judgment hvk 4/6 https://www.mhc.tn.gov.in/judis/ TCA.No.423 of 2020 To 1. The Income Tax Appellate Tribunal, Chennai 'B' Bench. 2. Principal Commissioner of Income Tax, Corporate Circle-2(2), Nungambakkam, Chennai - 600 034. 5/6 https://www.mhc.tn.gov.in/judis/ TCA.No.423 of 2020 T.S.SIVAGNANAM,J AND R.N.MANJULA,J hvk TCA.No.423 of 2020 05.01.2021 6/6 https://www.mhc.tn.gov.in/judis/

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