THE PR. COMMISSIONER OF INCOEM TAX-1 vs. SHRI GEORGE GEE VARGHESE

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TCA/489/2023HC Madras19 October 2024Bench: Honourable Mr Justice R. SURESH KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The dismissal was based on the submission by the Revenue's learned Standing Counsel that the tax effect in the instant case was less than the monetary limit prescribed by CBDT's Circular No.9 of 2024 dated September 17, 2024. Consequently, the Revenue requested that the appeal be disposed of without adjudicating the substantial questions of law. The Court recorded this submission and accordingly dismissed the appeal, keeping the substantial questions of law open for adjudication at an appropriate stage. No costs were awarded. The specific findings of the Tribunal on the agricultural nature of the land or the perversity of its findings were not addressed on merits by the High Court.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax-I, Chennai, filed a Tax Case Appeal before the High Court of Judicature at Madras. The appeal challenges an order passed by the Income Tax Appellate Tribunal (ITAT), Chennai, dated May 10, 2023, in I.T.A.No.3004 of 2018. The dispute concerns the taxability of capital gains arising from the sale of land. The assessee, Shri. George Gee Varghese, claimed the land was agricultural and thus not liable to capital gains tax. The Revenue contested this claim, arguing that the assessee had not declared any agricultural income from the land and no expenses were incurred on it, nor was it classified as agricultural in revenue records. The tax effect in this case was found to be below the monetary limit stipulated by CBDT's Circular No.9 of 2024.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Tribunal was justified in allowing the assessee's claim that the land sold was agricultural land and therefore not liable to capital gains, especially when the assessee had not admitted any agricultural income from the land, nor derived any such income, and had not incurred any expenses on the land as per filed returns? (Question of law and fact, concerning Section 45 of the Income Tax Act, 1961). 2. Is the finding of the Tribunal perverse, particularly when the assessee produced no evidence to show the lands were agricultural in nature, and as per revenue records, they were not classified as agricultural? (Question of law and fact, concerning Section 45 of the Income Tax Act, 1961). Assessee's contentions: The assessee claimed the land sold was agricultural and therefore exempt from capital gains tax. (Not explicitly detailed, but implied by the Tribunal's allowance of the claim). Revenue's contentions: The Revenue argued that the assessee failed to demonstrate the agricultural nature of the land by not reporting agricultural income or expenses. They also contended that revenue records did not classify the land as agricultural, making the Tribunal's finding perverse. The Revenue also cited CBDT's Circular No.9 of 2024 regarding the tax effect.

Which sections of the Income-tax Act were involved?

Section 45,Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.489 of 2023 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19.10.2024 CORAM THE HON'BLE MR.JUSTICE R.SURESH KUMAR AND THE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case Appeal No.489 of 2023 The Principal Commissioner of Income Tax-I Chennai. .... Appellant Vs. Shri.George Gee Varghese .... Respondent ----- Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chennai, dated 10.05.2023 made in I.T.A.No.3004 of 2018. For Appellant : Mr.T.Ravikumar Senior Standing Counsel For Respondent : Mr.R.Venkatanarayanan for M/s.Subbaraya Aiyar Padmanabhan ----- J U D G M E N T (Delivered by R.SURESH KUMAR, J.) This Tax Case Appeal has been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, Chennai by raising the following substantial questions of law: https://www.mhc.tn.gov.in/judis T.C.A.No.489 of 2023 "(i) Whether on the facts and circumstances of the case, the Tribunal was justified in allowing the claim of the Assessee that it was an agricultural land that was sold and that the same is not liable to capital gains especially when the Assessee had not admitted any agricultural income from the said land, nor any agricultural income was derived from the said land and no expenses were incurred on the land as per the Returns filed? (ii) Is not finding of the Tribunal perverse especially when no evidence has been produced by the Assessee to show that the lands were agricultural in nature and that as per the Revenue records the same had not been classified as Agricultural? 2. It is brought to our notice by the learned Standing Counsel for the appellant Revenue that in the instant case, as per the CBDT's Circular No.9 of 2024 dated 17.09.2024 the tax effect is said to be less than the monetary limit imposed and therefore, the appeal can be disposed of, keeping the substantial questions of law raised in this appeal open for adjudication at a later point of time. 3. It is further submitted by the learned Standing Counsel that to an e- mail communication dated 04.10.2024 requesting instructions as to whether https://www.mhc.tn.gov.in/judis T.C.A.No.489 of 2023 this case is covered under low tax effect, the reply given by the Revenue is in the affirmative. Therefore, based on such instructions from the Revenue, the learned Standing Counsel submits that this appeal can be disposed of. 4. Recording the aforesaid submission made by the learned Standing Counsel for the appellant Revenue, this Tax Case Appeal is dismissed for low tax effect, keeping open the substantial questions of law for adjudication at appropriate stage. No costs. (R.S.K.,J.) (C.S.N.,J.) 19.10.2024 NCS : Yes/No Index : Yes/No KST To The Income Tax Appellate Tribunal Chennai. https://www.mhc.tn.gov.in/judis T.C.A.No.489 of 2023 R.SURESH KUMAR, J. AND C.SARAVANAN, J. KST T.C.A.No.489 of 2023 19.10.2024 https://www.mhc.tn.gov.in/judis

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