DURAI SATHYMURTHY vs. THE DY COMMISSIONER OF INCOME

PDF · subscribers
TCA/807/2017HC Madras04 February 2021Bench: Hon`ble Mr Justice M.DURAISWAMY6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court decided not to adjudicate the substantial questions of law due to subsequent developments. The Court was informed that the assessee had availed the benefit under the Direct Tax Vivad Se Vishwas Act, 2020, by filing the requisite Form-1. Consequently, the Court found no useful purpose in keeping the appeal pending. The appeal was disposed of on the ground that the assessee had already filed the necessary form under the Vivad Se Vishwas Act. The Department was directed to process the application at the earliest. The assessee was granted liberty to restore the appeal if the ultimate decision on their declaration under the Act was not in their favour. In such an event, the Registry was directed to entertain the restoration petition without insisting on a condonation of delay application. The substantial questions of law were left open.

What were the facts?

The assessee, Durai Sathyamurthy, filed an appeal before the Madras High Court against the order of the Income Tax Appellate Tribunal (ITAT) dated March 9, 2017, for the assessment year 2012-13. The appeal challenged the ITAT's decision regarding the allowability of Rs. 25 lakhs as expenditure for land improvement. The revenue was represented by the Dy. Commissioner of Income Tax. The High Court noted that the Direct Tax Vivad Se Vishwas Act, 2020, was enacted to resolve disputed tax matters. The assessee informed the court that they had filed Form-1 under this Act on January 23, 2021.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in its interpretation of Section 45 read with Section 48 of the Income Tax Act, 1961, to hold that a sum of Rs. 25 lakhs, representing expenditure for the improvement of land, is not allowable, even though it is covered by the terms of a Memorandum of Understanding (MOU) entered into between the parties? (Question of law) 2. Whether the Tribunal was right in its conclusion, which was based on perverse findings of facts amounting to mere suspicion, surmise, and conjecture? (Question of mixed law and fact) Assessee's contentions: The assessee argued that the expenditure of Rs. 25 lakhs for land improvement was allowable as it was covered by the MOU. The assessee also contended that the Tribunal's findings were perverse, based on suspicion, surmise, and conjecture. 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 45,Section 48,Section 260A,Section 4

AI-generated summary — verify with the full judgment below

Tax Case No.807 of 2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 04.02.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE T.V. THAMILSELVI Tax Case Appeal No.807 of 2017 Durai Sathyamurthy

... Appellant v.

The Dy. Commissioner of Income Tax, Corporate Circle - 6(2), 122, Nungambakkam High Road, Chennai - 600 034.

... Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, "B" Bench, Chennai, dated 09.03.2017 passed in I.T.A.No.3028/Mds/2016 for the assessment year 2012-13. For Appellant : V.S. Jayakumar For Respondent : J. Narayanaswamy Senior Standing Counsel Page 1/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.807 of 2017 J U D G M E N T (Judgment was Delivered by M. DURAISWAMY, J)

This appeal filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity), is directed against the order dated 09.03.2017 passed by the Income Tax Appellate Tribunal, "B" Bench, Chennai ('the Tribunal' for brevity) in I.T.A.No.3028/Mds/2016 for the assessment year 2012-13. 2. The e assessee has raised the following Substantial Questions of Law for consideration: " (i) Whether on the facts and in the circumstances of the case the Tribunal is right in its interpretation of Section 45 read with Section 48 to hold that the sum of Rs.25 lakhs representing the expenditure for the purpose of improvement of the land is not allowable even though the same is covered by terms of the MOU entered into between the parties? and (ii) Whether the Tribunal is right in its conclusion which are based on perverse findings of facts which amounts to mere suspicion, surmise and conjecture ?" Page 2/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.807 of 2017

3.

We have heard V.S. Jayakumar, learned counsel for the appellant and J. Narayanaswamy, learned Senior Standing Counsel for the respondent. 4. It may not be necessary for this Court to decide the Substantial Questions of Law framed for consideration on account of certain subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or incidental thereto. The Act of the Parliament received the assent of the President on 17th March 2020 and published in the Gazette of India on 17th March 2020. 5. We are informed by the learned counsel for the appellant/assessee that the assessee has already filed the requisite Form - 1 on 23.01.2021 under Section 4 of the Act. Page 3/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.807 of 2017 6. . In the light of the fact that the assessee has already availed the benefit under the Act, no useful purpose would be served in keeping this appeal pending. At the same time, safeguarding the interest of the assessee in the event the order to be passed by the Department under the Act is not in favour of the assessee. Accordingly, the Tax Case Appeal stands disposed of on the ground that the assessee has already filed requisite Form - 1 and the Department shall process the application at the earliest in accordance with the said Act and communicate the decision to the assessee at the earliest. As observed, 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 Division Bench for orders.

Page 4/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.807 of 2017 7. With these observations, the Tax Case Appeal stands disposed of with the aforementioned liberty and Consequently, the Substantial Questions of Law are left open. No costs. (M.D.,J.) (T.V.T.S.,J.) 04.02.2021 Index : Yes/No Internet : Yes Rj To 1. The Income Tax Appellate Tribunal, Chennai "B" Bench .

2.

The Dy. Commissioner of Income Tax, Corporate Circle - 6(2), 122, Nungambakkam High Road, Chennai - 600 034. Page 5/6 https://www.mhc.tn.gov.in/judis/ Tax Case No.807 of 2017 M. DURAISWAMY, J. and T.V. THAMILSELVI, J. Rj Tax Case Appeal No.807 of 2017

04.02.2021 Page 6/6 https://www.mhc.tn.gov.in/judis/

More judgments on Section 45

All 1,374 judgments and leading authorities on Section 45 →

Recent GST High Court judgments

Search GST case law →