THE COMMISSIONER OF INCOME T vs. LAKSHMI DEVI

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TCA/782/2019HC Madras28 November 2019Bench: Hon`ble Mr Justice N. KIRUBAKARAN6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Case Appeal filed by the Revenue. The dismissal was based on the submission by the Revenue's counsel that the tax effect in the case was less than Rs.1 Crore, which is below the monetary limit for filing appeals before the High Court as stipulated in CBDT Circular No.17/2019 dated 08.08.2019. The Court perused the circular and agreed with the submission. Consequently, the appeal was dismissed on account of the tax effect. However, the Court explicitly stated that the substantial questions of law framed were left open. Liberty was granted to the Revenue to mention the case for restoration if the tax effect is found to be above the limit fixed in the circular, enabling the appeal to be heard and decided on merits. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax, Salary Ward V(1), Chennai, filed a Tax Case Appeal before the High Court of Judicature at Madras. The appeal was against an order dated 24.07.2009 passed by the Income Tax Appellate Tribunal (ITAT), 'B' Bench. The ITAT had dismissed the Department's appeal against the order of the Commissioner of Income Tax (Appeals), which had allowed the assessee's appeal. The assessment year in question is 2005-06. The appeal was admitted on substantial questions of law. The Revenue's counsel submitted that the tax effect was less than Rs.1 Crore, which is below the monetary limit for filing appeals before the High Court as per CBDT Circular No.17/2019 dated 08.08.2019.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Tribunal was right in deciding that the possession was handed over only for construction and as such cannot be deemed to be a transfer as per Section 2(47)(v) of the Income Tax Act, 1961? The Revenue contended that possession handed over for construction constitutes a transfer. The assessee's arguments are not recorded. 2. Whether, on the facts and circumstances of the case, the Tribunal was right in not considering Section 48 of the Income Tax Act, 1961, regarding capital gains received or accrued, since, in this case, consideration accrued to the assessee on 05.09.2003 as per the development agreement? The Revenue argued that consideration accrued on the date of the development agreement. The assessee's arguments are not recorded. The Tribunal's findings on these issues are not detailed in the provided text, as the appeal was dismissed on a procedural ground.

Which sections of the Income-tax Act were involved?

Section 260A,Section 2(47)(v),Section 48

AI-generated summary — verify with the full judgment below

TCA NO.782 OF 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 28.11.2019 CORAM : THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN AND THE HONOURABLE MR.JUSTICE P.VELMURUGAN T.C.A.NO.782 OF 2019 The Commissioner of Income Tax Salary Ward V(1) Chennai.

... Appellant Vs. Lakshmi Devi

... Respondent PRAYER: Tax Case Appeal filed under Section 260A of Income Tax Act, 1961, against the order dated 24.07.2009 in I.T.A.No.1913/Mds/2008 on the file of the Income Tax Appellate Tribunal 'B' Bench for the assessment year 2005-06. For Appellant : Mr.T.Ravikumar J U D G M E N T (Judgment of the Court was made by N.KIRUBAKARAN, J.)

This Tax Case Appeal has been filed against the order of the Income Tax Appellate Tribunal dated 24.07.2009 passed in 1/6 http://www.judis.nic.in TCA NO.782 OF 2019 I.T.A.No.1913/Mds/2008 dismissing the appeal filed by the Department of Revenue against the order of the Commissioner of Income Tax (Appeals) by which the appeal filed by the assessee was allowed. 2. Heard Mr.T.Ravikumar, learned counsel for the appellant. 3. This Tax Case Appeal is admitted on the following substantial questions of law: "1. Whether on the facts and circumstances of the case, the Tribunal is right in deciding that the possession was handed over only for construction and as such cannot be deemed to be transfer as per specific provision of sec.2(47)(V) of the Income Tax Act? 2.Whether on the facts and circumstances of the case, the Tribunal is right in not considering Sec.48, the capital gain received or accrued, since, in this case, consideration accrued to the assessee on 5.9.03 as per development agreement?." 2/6 http://www.judis.nic.in TCA NO.782 OF 2019 4. Mr.T.Ravikumar, learned counsel appearing on behalf of the appellant would submit that the tax effect in this case is less than Rs.1 Crore and is covered by Circular No.17/2019 dated 08.08.2019 issued by the Director, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, Delhi. As per the said circular, the monetary limit to file an appeal before the High Court is fixed at Rs.1 Crore. In this case, tax effect is less than Rs.1 Crore and therefore, the appeal has to be dismissed. 5. This Court perused the circular dated 08.08.2019 and Paragraph No.2 of the Circular, which prescribes monetary limit for filing appeal. Paragraph No.2 is usefully extracted as follows: "2. As a step towards further management of litigation, it has been decided by the Board that monetary limits for filing of appeals in income-tax cases be enhanced further through amendment in Para 3 of the Circular mentioned above and accordingly, the table for monetary limits specified in Para 3 of the Circular shall read as follows: 3/6 http://www.judis.nic.in TCA NO.782 OF 2019 S.No. Appeals / SLPs in Income-tax matters Monetary Limit (Rs.) 1. Before Appeallate Tribunal 50,00,000 2. Before High Court 1,00,00,000 3. Before Supreme Court 2,00,00,000 6.In view of the submissions made by the learned Senior Standing Counsel appearing on behalf of the appellant and also in view of the Circular No.17/2019 dated 08.08.2019 issued by the Director, Central Board of Direct Taxes, Delhi, this Tax Case Appeal is dismissed on account of tax effect. However, the substantial question of law framed is left open. In the event the tax effect is above the limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeal to be heard and decided on merits. No costs. [N.K.K., J.] [P.V., J.]

28.11.2019 Index : Yes/No Internet : Yes/No Speaking / Non-speaking order TK

4/6 http://www.judis.nic.in TCA NO.782 OF 2019 To The Commissioner of Income Tax Salary Ward V(1) Chennai. 5/6 http://www.judis.nic.in TCA NO.782 OF 2019 N.KIRUBAKARAN, J. AND P.VELMURUGAN, J. TK T.C.A.NO.782 OF 2019 28.11.2019 6/6 http://www.judis.nic.in

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