THE COMMISSIONER OF INCOME T vs. SHRI.R.VISHNUMOHAN

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TCA/843/2019HC Madras13 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 on the grounds of tax effect, citing Circular No.17/2019 dated 08.08.2019. The Court noted that the monetary limit for filing appeals before the High Court had been enhanced to Rs.1 crore. Since the tax effect in this case was less than Rs.1 crore, the appeal was dismissed. However, the substantial questions of law framed were left open. The Revenue was granted liberty to mention the case for restoration if the tax effect was found to be above the stipulated limit, to be heard and decided on merits. No costs were awarded. The judgment does not provide a decision on the merits of the substantial questions of law.

What were the facts?

The Revenue, the Commissioner of Income Tax, Chennai, filed a Tax Case Appeal against an order of the Income Tax Appellate Tribunal (ITAT) dated 17.11.2011. The ITAT had confirmed an order of the Commissioner of Income Tax (Appeals) who had reversed the assessment officer's decision. The assessment officer had denied the assessee, Shri R.Vishnumohan, the benefit of income tax for the cost of a building in the computation of capital gains. This was because the assessment officer did not accept the assessee's claim that the building was demolished at the purchaser's request. The assessment year in question is 2008-09. The appeal was admitted on substantial questions of law.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in upholding the orders of CIT(A) who held that the transfer of building while computing long term capital gain was valid, when the registered sale deed admittedly conveyed only a plot, indicating the building was demolished before the transfer of land and therefore had no value? (Question of law and fact, concerning computation of capital gains). 2. Whether the finding of the Tribunal was proper, especially when the registered sale deed clearly indicated that the building was not transferred as it was demolished and only land was transferred? (Question of law and fact, concerning the interpretation of the sale deed and its impact on capital gains). Assessee's contentions: Not recorded in the judgment. Revenue's contentions: 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 CBDT. As per this circular, the monetary limit to file an appeal before the High Court is Rs.1 crore. Therefore, the appeal should be dismissed.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.843 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 13.11.2019 CORAM : THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN and THE HONOURABLE MR.JUSTICE P.VELMURUGAN T.C.A.No.843 of 2019 The Commissioner of Income Tax, Chennai.

... Appellant Vs Shri R.Vishnumohan, 327-C, Lingappa Street, Coimbatore - 641 001.

...Respondent PRAYER: Tax Case Appeal filed under Section 260A of Income Tax Act, 1961 against the order dated 17.11.2011 in ITA No.1474/Mds/2011 on the file of the Income Tax Appellate Tribunal Madras 'C' Bench for the assessment year 2008-09. For Appellant : Mr.T.R.Senthil Kumar, Senior Standing Counsel. For Respondent : Mr.A.S.Sriraman

1/6 http://www.judis.nic.in T.C.A.No.843 of 2019 J U D G M E N T (Order of the Court was delivered by N.KIRUBAKARAN, J)

This Tax Case Appeal has been filed against the order passed by the Income Tax Appellate Tribunal confirming the order of the Commissioner of Income Tax who reversed the order of the assessment officer who did not accept the case of the assessee that the building was demolished on the request of the purchaser and therefore, he was not given the benefit of Income tax for the cost of the building for the computation of capital wages. 2.Heard Mr.T.R.Senthil Kumar, learned Senior Standing Counsel for the appellant and Mr.A.S.Sriraman, learned Counsel for the respondent. 3.This appeal is admitted on the following substantial questions of law; “(i)Whether on the facts and in the circumstances of the case, the Income Tax Appellate 2/6 http://www.judis.nic.in T.C.A.No.843 of 2019 Tribunal was right in upholding the orders of CIT(A) who had held that the transfer of building while computing long term capital gain when admittedly the assessee had conveyed only a plot by registered sale deed which indicated that the building was demolished before transfer of the land and therefore had no value? (ii)Whether the finding of the Tribunal was proper especially in the registered sale deed executed clearly indicated that the building in the Schedule was not transferred as it was demolished and only land was transferred?”

4.

Mr.T.R.Senthil Kumar, learned Senior Standing Counsel for 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 case has to be dismissed. 3/6 http://www.judis.nic.in T.C.A.No.843 of 2019 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: 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 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, the Tax Case Appeal is dismissed on account of tax effect. However, the substantial questions of law framed are left open. 4/6 http://www.judis.nic.in T.C.A.No.843 of 2019 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.) 13.11.2019 ay To The Commissioner of Income Tax, Chennai.

5/6 http://www.judis.nic.in T.C.A.No.843 of 2019 N.KIRUBAKARAN, J. and P.VELMURUGAN, J. ay

T.C.A.No.843 of 2019 Dated:13.11.2019 6/6 http://www.judis.nic.in

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