Madras High Court
Principal Commissioner Of Income ... vs Shiridi Estates on 18 August, 2022
T.C.A.Nos.241 and 242 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 18.08.2022
CORAM :
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
AND
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
T.C.A.Nos.241 and 242 of 2021
Principal Commissioner of Income Tax,
Non Corporate Circle - 22,
Tambaram, Chennai - 600 045. ... Appellant in both TCAs
Versus
Shiridi Estates
New No.32, Old No.28,
Ramachandra Road, Nehru Nagar,
Chromepet, Chennai - 600 044.
PAN: AAAHS 8731E ... Respondent in TCA.No.241 of 2021
R.Vasanthi Ram Narayan ... Respondent in TCA.No.242 of 2021
Appeals preferred under Section 260A of the Income Tax Act, 1961,
against the order dated 16.08.2017 passed by the Income Tax Appellate
Tribunal, “A” Bench, Chennai, in I.T.A.Nos. 395 and 397/Mds/2017.
For Appellant : Mr.Karthik Ranganathan
Senior Standing Counsel
Mr.Rajesh in both TCAs
For Respondents : Mr.N.V.Balaji in both TCAs
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T.C.A.Nos.241 and 242 of 2021
COMMON JUDGMENT
(Judgment of the Court was delivered by R.MAHADEVAN, J.)
These tax case appeals have been filed by the appellant / Revenue,
challenging the common order dated 16.08.2017 passed by the Income Tax
Appellate Tribunal, “A” Bench, Chennai, in I.T.A.Nos. 395 and
397/Mds/2017, relating to the assessment year 2007-08.
2. By order dated 30.03.2021, this court admitted the aforesaid tax
case appeals on the following substantial questions of law:
“(i) Whether, on the facts and in the circumstances of the
case, the Tribunal was right in law in holding that the income on
sale of plots is to be assessed under the head 'capital gains' and not
under the head 'business'?
(ii) Whether the Tribunal is right in law in not appreciating
the fact that the assessee was engaged in the business of buying
land, incurring expenses towards development of the same and
making the land into different sizes of plots?
(iii) Whether the Tribunal erred in not appreciating the fact
that the assessee was paying commission/service charges to the
concern M/s.Tellus Avenue as principal agent relationship was
existing between them i.e the activity of the assessee was business
venture?
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T.C.A.Nos.241 and 242 of 2021
(iv) Whether the Tribunal erred in not appreciating the fact
that the intention of the assessee was to exploit the land by sub-
dividing it into smaller plots and it was not purchased for the
purpose of investment?
(v) Whether the Tribunal erred in not appreciating the ratio
of the decision in the cases of Raja J.Rameshwar Rao Vs.CIT
[(1961) 42 ITR 179 (SC)]; and Indramani Bhai & another Vs.
Additional CIT [(1993) 200 ITR 594 (SC)] wherein it was held that
when a person acquires a land with a view of selling it later, after
developing it, he is carrying on activity resulting in profit and the
activity can only be described as business venture? and
(vi) Whether, on the facts and in the circumstances of the case
and law, the Tribunal erred in following their decision in the case of
other land owners who were parties to the said development
agreement Shri S.Vasanthakumar AY 2007-08
[ITA.No.1491/Mds/2010 dated 08.08.2012], common order dated
25.02.2014 in the case of Shri D.Gnanasekaran - AY 2009-10
(ITA.No.1380/Mds/2013] and Shri S.Sridharan - AY 2008-09
[ITA.No.1718/Mds/2013] when the facts are distinguishable?"
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
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T.C.A.Nos.241 and 242 of 2021
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.)
18.08.2022
Internet : Yes
Index : Yes / No
av
To
1. The Income Tax Appellate Tribunal,
“A” Bench, Chennai.
2. The Principal Commissioner of Income Tax,
Non Corporate Circle - 22,
Tambaram, Chennai - 600 045.
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T.C.A.Nos.241 and 242 of 2021
3. The Assistant Commissioner of Income-tax,
Non-Corporate Circle - 22,
Tambaram, Chennai - 45.
4. The Commissioner of Income Tax (Appeals)-10,
Chennai.
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T.C.A.Nos.241 and 242 of 2021
R. MAHADEVAN, J.
and
MOHAMMED SHAFFIQ, J.
av
T.C.A.Nos.241 and 242 of 2021
18.08.2022
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