PRINCIPAL COMMISSIONER OF IN vs. J. ELAVARASI

TCA.Nos. 918 & 919 of 2018 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 04.08.2022 CORAM

THE HONOURABLE MR. JUSTICE R. MAHADEVAN and THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.Nos. 918 & 919 of 2018 Principal Commissioner of Income Tax, Central 2, No.108, Mahatma Gandhi Road, Chennai. .. Appellant in both appeals Versus Smt. J. Elavarasi .. Respondent in both appeals Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal Madras “D” Bench, dated 28.10.2016 passed in ITA.No.92/Mds/2006 and ITA.No.316/Mds/2011. For Appellant : Mr.Rajesh for Mr. Karthik Ranganathan Standing Counsel in both TCAs For Respondent : No appearance 1/6 https://www.mhc.tn.gov.in/judis TCA.Nos. 918 & 919 of 2018 COMMON JUDGMENT (Judgment of the Court was delivered by R. MAHADEVAN, J.) These Tax Case Appeals have been filed by the appellant / revenue, questioning the correctness of the order dated 28.10.2016 passed by the Income Tax Appellate Tribunal Madras “D” Bench, in ITA.No.92/Mds/2006 and ITA.No.316/Mds/2011 for the Block assessment years 01.04.1986 to 24.09.1996 and 2004-05. 2. This Court, by order dated 11.12.2018, admitted the aforesaid Tax Case Appeals on the following substantial questions of law; TCA.No.918 of 2018: ' i. Whether the Appellate Tribunal is correct in law in deleting the additions made by the Assessing Officer for the block period on the ground that no addition towards undisclosed income can be made without seized incriminating material to support such addition, when the assessee never filed return of income? ii. Whether the Appellate Tribunal s correct in law in holding that the Assessing Officer cannot travel beyond 2/6 https://www.mhc.tn.gov.in/judis TCA.Nos. 918 & 919 of 2018 the material found during the course of search operation for the purpose of computing undisclosed income? iii. Whether the Appellate Tribunal is correct in law in holding that addition cannot be made based on valuation report obtained subsequent to search from the Departmental valuer ignoring the fact that the assessee had made investments in construction of bungalow, but did not produce adequate proof in support of such investment in the properties? iv. Whether the Appellate Tribunal is correct in law in holding that the Assessing Officer cannot ask for source of unexplained cash credit in the name of M/s.Bharani Beach Resorts (P) Ltd., of Rs.22 lakhs in the assessment year 1995-96 on the ground that this is a block assessment by ignoring the fact that the assessee has not filed any return of income for the assessment year 1995- 96 earlier and as such, is it not imperative to verify the source of this cash credit? v. Whether the Appellate Tribunal is correct in law in holding that addition cannot be made based on statement recorded under section 132(4) whereas as per the provisions of Sub-Section (4) of Section 132 of the Income Tax Act, such statement can be used in evidence in any proceedings under the Income Tax Act? And 3/6 https://www.mhc.tn.gov.in/judis TCA.Nos. 918 & 919 of 2018 vi. Whether the Appellate Tribunal is correct in law in deleting the additions made by the Assessing Officer towards unproved agricultural income on the ground that there is no seized material whereas agricultural income being exempted income, onus lies upon the assessee to prove the receipt of such income?” TCA.No.919 of 2018:

“ i. Whether the Appellate Tribunal is correct in law in directing the Assessing Officer to accept the agricultural income declared by the assessee as agricultural income without production of any details? and ii. Whether the Appellate Tribunal is correct in law in allowing the appeal of the assessee on the issue of agricultural income on the ground that the same was accepted in earlier assessment years and on the ground that the Department has not brought anything on record to show that the assessee not cultivated the land by ignoring the fact that each assessment year is a different and distinct year and agricultural income being exempted income, onus lies upon the assessee to prove the receipt of income from such source?” 4/6 https://www.mhc.tn.gov.in/judis TCA.Nos. 918 & 919 of 2018 3. When the matters were taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in these appeals is less than the threshold limit. 4. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. [R.M.D,J.] [M.S.Q., J.] 04.08.2022 msr

Index : Yes / No 5/6 https://www.mhc.tn.gov.in/judis TCA.Nos. 918 & 919 of 2018 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. msr To 1. The Assistant Commissioner of Income Tax, Central Circle II (2), Chennai-34. 2. The Commissioner of Income Tax (Appeals)-II Chennai-34 3. The Income Tax Appellate Tribunal Madras “D” Bench, Chennai. T.C.A.Nos. 918 & 919 of 2018 04.08.2022 6/6 https://www.mhc.tn.gov.in/judis