MURUGESAN CHELLAPPA vs. THE INCOME TAX OFFICER

TCA.No.85 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 23.02.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Ms.Justice R.N.MANJULA Tax Case Appeal No.85 of 2021 Mr.Murugesan Chellappa ...Appellant Vs The Income Tax Officer, Corporate Ward - 3(4), Chennai - 34. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 16.09.2019 made in ITA.No.1673/Chny/2018 on the file of the Income Tax Appellate Tribunal, 'D' Bench, Chennai for the assessment year 2013-14. For Appellant: Mr.G.Baskar JUDGMENT (Delivered by

T.S.Sivagnanam,J

) This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 1/6 https://www.mhc.tn.gov.in/judis/ TCA.No.85 of 2021 16.09.2019 made in ITA.No.1673/Chny/2018 on the file of the Income Tax Appellate Tribunal, 'D' Bench, Chennai ('the Tribunal' for brevity) for the assessment year 2013-14. 2. The appellant/assessee has raised the following substantial questions of law for consideration: "1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in holding that the Appellant is not entitled to claim exemption u/s 10(38) of the Income Tax Act, 1961 in respect of the shares held by him in separate investment portfolios merely because the Accountant had wrongly accounted the same as stock-in-trade under the head "Current Assets" without appreciating substance over form? 2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is perverse in holding that there was prima facie evidence to show that the shares were held as stock-in- trade and purchase of the shares was debited to profit & loss account? 3. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right 2/6 https://www.mhc.tn.gov.in/judis/ TCA.No.85 of 2021 in not appreciating that there was genuine mistake on the part of the Accountant in reflecting the investment in shares as stock-in-trade which could be the basis for rejection of the claim of exemption u/s 10(38) of the Income Tax Act, 1961?" 3. We have heard Mr.G.Baskar, learned counsel appearing for the appellant/assessee. 4. The learned counsel for the appellant/assessee submits that the appellant/assessee has already filed the declaration/undertaking under the Vivad Se Vishwas Scheme on 08.01.2021 and is awaiting orders to be passed in Form No.3. 5. In the light of the subsequent event, the Competent Authority shall process the application/declaration in accordance with the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) and pass appropriate orders as expeditiously as possible. 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 3/6 https://www.mhc.tn.gov.in/judis/ TCA.No.85 of 2021 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 appropriate Division Bench for orders. 6. The tax case appeal stands disposed of with the aforementioned liberty and consequently, the substantial questions of law framed are left open. No costs. (T.S.S.,J.) (R.N.M.,J.) 23.02.2021 Index:Yes/No Internet:Yes/No hvk 4/6 https://www.mhc.tn.gov.in/judis/ TCA.No.85 of 2021 To 1. The Income Tax Appellate Tribunal, Madras 'D' Bench, Chennai. 2. The Income Tax Officer, Corporate Ward - 3(4), Chennai - 34. 5/6 https://www.mhc.tn.gov.in/judis/ TCA.No.85 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J hvk TCA.No.85 of 2021 23.02.2021 6/6 https://www.mhc.tn.gov.in/judis/