THE COMMISSIONER OF INCOME T vs. M/S. COROMANDEL OILS PRIVATE

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TCA/745/2016HC Madras29 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN6 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court, in its common judgment, noted the submission by the Revenue's counsel regarding Circular No. 17/2019 issued by the Central Board of Direct Taxes. This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court if the tax effect does not exceed Rs. 1,00,00,000/-. The Revenue's counsel submitted that the tax effect in the present appeals was less than this threshold limit. Consequently, the Court dismissed the present appeals as withdrawn, stating that they were being withdrawn due to the tax effect being below the monetary limit. The Court explicitly mentioned that the substantial questions of law were kept open for determination in appropriate cases. No costs were awarded. The connected miscellaneous petition was also closed.

What were the facts?

The appeals were filed by the Commissioner of Income Tax, Chennai (Revenue) against the orders of the Income Tax Appellate Tribunal (ITAT), Chennai, dated June 26, 2015, and August 28, 2015. These orders pertained to M/s. Coromandel Oils Private Limited (Assessee) for the assessment year 2009-10. The appeals challenged the ITAT's decisions regarding additions to total income and deletion of penalty. The core dispute involved the valuation of land sold by the assessee, with the Revenue contending that the sale price was significantly lower than the fair market value, citing a higher sale price of adjacent land. The ITAT had previously deleted additions and penalties, leading to the present appeals by the Revenue.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. (TCA.No.745 of 2016) Whether the onus lies on the department to adopt the fair market value of land sale against the guideline value adopted by the assessee, especially when adjacent land sold at a higher rate? (Question of law) 2. (TCA.No.745 of 2016) Is the Tribunal's finding bad when a statement under oath indicated adjacent land sold for over Rs.35 crores, while the assessee's land sold for Rs.10.5 crores? (Question of mixed law and fact) 3. (TCA.No.745 of 2016) Is the Tribunal's finding proper when adjacent land sold at Rs.35 crores compared to the assessee's land sold at Rs.10.5 crores? (Question of mixed law and fact) 4. (TCA.No.747 of 2016) Whether the Tribunal was right in deleting the penalty levied under Section 271(1)(c)? (Question of law) 5. (TCA.No.747 of 2016) Is the Tribunal's finding bad when incriminating documents seized during survey revealed profit on sale of land in excess of registered value received by the assessee? (Question of mixed law and fact) 6. (TCA.No.21 of 2017) Whether the Tribunal was right in deleting additions to total income when the market value of the property was substantiated to be higher than the guideline value? (Question of law) 7. (TCA.No.21 of 2017) Could the guideline value be regarded as conclusive evidence of the market value of land sold? (Question of law) Assessee's contentions: Not recorded. Revenue's contentions: The Revenue argued that the ITAT's findings were improper and bad in law, particularly concerning the valuation of land and the deletion of penalties, citing discrepancies in sale values and evidence of undisclosed profits.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.Nos.745 and 747 of 2016 and 21 of 2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 29.08.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.Nos.745 and 747 of 2016 and 21 of 2017 and CMP.No.16192 of 2016 The Commissioner of Income Tax, Chennai. ... Appellant in all TCAs Versus M/s.Coromandel Oils Private Limited, Doshi Towers, 9th Floor, 156, P.H.Road, Chennai - 600 010. PAN: AAACC 8855E ... Respondent in all TCAs Appeals preferred under Section 260A of the Income Tax Act, 1961, against the orders dated 26.06.2015 and 28.08.2015 passed by the Income Tax Appellate Tribunal, “C” Bench, Chennai, in I.T.A.Nos.1880 and 1938/Mds/2013 and MP.No.73 of 2015 in I.T.A.No.1937/Mds/2013. For Appellant : Mr.T.Ravikumar

Senior Standing Counsel in all TCAs For Respondent : Mr.S.Sridhar in all TCAs Page 1/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.745 and 747 of 2016 and 21 of 2017

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 orders dated 26.06.2015 and 28.08.2015 passed by the Income Tax Appellate Tribunal, “C” Bench, Chennai, in I.T.A.Nos.1880 and 1938/Mds/2013 and MP.No.73 of 2015 in I.T.A.No.1937/Mds/2013, relating to the assessment year 2009-10, by raising the following substantial questions of law:- TCA.No.745 of 2016:- “ (i) Whether on the facts and circumstances of the case, onus lies on the department to adopt the fair market value of the sale of land as against the guideline value adopted by the assessee especially when the adjacent land was sold at a much higher rate than that of value disclosed by the assessee? (ii) Is not the finding of the Tribunal bad especially when a Statement was recorded under oath by Smt Rani Gopinath to the effect that the actual value of the adjacent land sold was more than Rs.35 crores whereas in the assessee's case it was sold only for Rs.10.5 crores? (iii) Whether the finding of the Tribunal is proper especially when the adjacent land were sold at a very high rate at Page 2/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.745 and 747 of 2016 and 21 of 2017 Rs.35 crores when compared with the assessee's land which was sold at a very low rate viz. Rs.10.5 crores?" TCA.No.747 of 2016:- “(i) Whether on the facts and circumstances of the case the Tribunal was right in deleting the penalty levied under Section 271(1)(c)? (ii) Is not the finding of the Tribunal bad especially when during survey incriminating documents pertaining to joint development agreement was seized which revealed that profit on sale of land in excess of the registered value was received by CCPL on the basis of profit of the firm?" TCA.No.21 of 2017:- "(i) Whether on the facts and circumstances of the case the Tribunal was right in deleting the additions made to the total income especially when the market value of the property was substantiated to be higher than the guideline value of the property? (ii) Whether on the facts and circumstances of the case the guideline value could be regarded as conclusive evidence regarding the marked value of the land sold?" 2. 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.745 and 747 of 2016 and 21 of 2017 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. 3. 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 question of law for determination in appropriate cases. No costs. Consequently, connected miscellaneous petition is closed. (R.M.D., J.) (M.S.Q., J.) 29.08.2022

Internet : Yes

Index : Yes / No av Page 4/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.745 and 747 of 2016 and 21 of 2017 To 1. The Income Tax Appellate Tribunal, “C” Bench, Chennai. 2. The Commissioner of Income Tax, Chennai. 3. The Assistant Commissioner of Income-tax, Company Circle I (3), Chennai - 600 034. 4. The Deputy Commissioner of Income-tax, Company Circle I (3), Chennai - 600 034. Page 5/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.745 and 747 of 2016 and 21 of 2017 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. av T.C.A.Nos.745 and 747 of 2016 and 21 of 2017 29.08.2022 Page 6/6 https://www.mhc.tn.gov.in/judis

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