K.A.MANSHOOR vs. THE ASSISTANT COMMISSIONER

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TCA/842/2016HC Madras15 December 2021Bench: Hon`ble Mr Justice R. MAHADEVAN5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that during the pendency of the appeal, the assessee had filed Forms 1 and 2 under Section 4 of the Direct Tax Vivad Se Vishwas Act, 2020. These forms were accepted by the Income Tax Department, and Form 3 was issued to the assessee on 27.01.2021. The learned counsel for the assessee filed a memo to this effect, which was fairly conceded by the learned senior standing counsel for the Revenue. In light of these developments, the High Court found it unnecessary to decide the substantial questions of law raised in the appeal. The appeal was disposed of, directing the department to process the application under the Vivad Se Vishwas Act in accordance with the provisions of the Act and communicate the decision to the assessee at the earliest. No costs were awarded. The specific findings on the substantial questions of law were not made.

What were the facts?

The appellant, K.A. Manshoor, filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order dated 31.05.2016 passed by the Income Tax Appellate Tribunal (ITAT), Madras Bench. The appeal pertains to Assessment Year 2009-10 and concerns an addition made by treating long-term capital gains as business profits. The procedural history involves the assessee filing the appeal against the ITAT's order, which had set aside the Commissioner of Income Tax (Appeals) order regarding the said addition. The High Court was to decide substantial questions of law raised by the assessee.

What were the issues?

1. Whether, on the facts and circumstances, the Tribunal was correct in setting aside the order of the CIT(A) regarding the addition made by treating long-term capital gains as business profits, considering Section 2(47)(iii) of the Income Tax Act, 1961, which defines 'transfer' in relation to a capital asset. The assessee's argument, though not explicitly stated as a contention, is implied by the question, suggesting the Tribunal's interpretation of 'transfer' might be flawed. The revenue's contention is not recorded. 2. Whether, on the facts and circumstances, the Tribunal was correct in setting aside the addition by treating long-term capital gains as business profits, when the assessee had disclosed the same as 'Fixed Assets in the Balance Sheet'. The assessee's argument is that the disclosure as fixed assets should preclude it from being treated as business profits. The revenue's contention is not recorded.

Which sections of the Income-tax Act were involved?

Section 2(47)(iii),Section 4

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.842 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 15.12.2021 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No.842 of 2016 K.A.Manshoor

... Appellant Vs.

The Assistant Commissioner of Income Tax Company Circle -I (3) Chennai – 600 034. ... Respondent

Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras “B” Bench, Chennai dated 31.05.2016 passed in I.T.A.No.1412/Mds/2013. For Appellant : Mr. K.Prasad For Respondent : Mr. T.Ravikumar Senior Standing Counsel Page 1/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.842 of 2016 J U D G M E N T (Judgment was delivered by R. MAHADEVAN, J.) This Tax Case Appeal has been filed by the appellant / Assessee challenging the order dated 31.05.2016 passed by the Income Tax Appellate Tribunal, Bench 'B', Chennai ('the Tribunal', for brevity) in I.T.A.No.1412/Mds/2013 for the Assessment Year 2009-10. 2.The assessee has raised the following substantial questions of law in the above tax case appeal: “1.Whether on the facts and circumstances of the case, the Tribunal was right in set aside the order of the Hon'ble Commissioner of Income Tax (Appeals) in respect of the addition made towards 'Treating Long Term Capital Gains as Business Profits' when Section 2(47) clause iii of the Income Tax Act, 1961 stipulates that transfer'' in relation to a capital asset, includes (i) the sale, exchange or relinquishment of the asset; or (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under any law etc.,? 2. Whether on the facts and circumstances of the case, the Tribunal was right in setting aside the addition made Page 2/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.842 of 2016 towards ''Treating the Long Term Capital Gains as Business Profits'' by treating the same as ''Business Prfits'' when the Appellant /Assessee had duly disclosed the same as ''Fixed Assets in the Balance Scheet''?” 3.When the matter was taken up for consideration, the learned counsel appearing for the appellant / assessee submitted that during the pendency of this tax case appeal, the assessee has filed the requisite Forms 1 and 2 under Section 4 of the Direct Tax Vivad Se Vishwas Act, 2020, which were accepted and Form 3 was issued to the assessee on 27.01.2021 by the Income Tax Department. The learned counsel has also filed a memo to that effect. 4.The aforesaid submission made by the learned counsel for the appellant / assessee has also been fairly conceded by the learned senior standing counsel appearing for the respondent / Revenue. 5.This court heard the submissions made by the learned counsel on either side, as per which, the assessee has already availed the benefit conferred under the beneficial legislation viz., the Direct Tax Vivad Se Vishwas Act, 2020, enacted for resolution of disputed tax and for matters Page 3/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.842 of 2016 connected therewith or incidental thereto, which came into force with effect from 17.03.2020; and the declarations submitted by the assessee were also accepted and Form 3 was also issued to them by the Income Tax Department. In view of such development, it is unnecessary for this court to decide the substantial questions of law arisen in this tax case appeal.

6.Therefore, recording the submissions so made by the learned counsel on either side, this appeal stands disposed of, directing the department to process the application in accordance with the Act and communicate the decision to the assessee at the earliest. No costs. [R.M.D,J.] [M.S.Q, J.] 15.12.2021

Internet : Yes

Index : Yes / No Maya Page 4/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.842 of 2016 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. Maya To 1.The Income Tax Appellate Tribunal Madras “B” Bench. 2.The Assistant Commissioner of Income Tax Company Circle -I (3) Chennai – 600 034.

Tax Case Appeal No.842 of 2016

Dated : 15.12.2021 (2/2) Page 5/5 https://www.mhc.tn.gov.in/judis

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