COMMISSIONER OF INCOME-TAX V. BHAILALBHAI MATHURBHAI PATEL

ITR/281/1995

AI Insights

The case involves an Income Tax Reference by the Commissioner of Income-Tax against Bhailalbhai Mathurbhai Patel concerning the taxability of an amount received for surrendering tenancy rights during the assessment year 1988-89. The Income Tax Appellate Tribunal had previously ruled on this matter, which was contested by the Commissioner of Income-Tax. The High Court's decision focused on two questions referred by the Tribunal under Section 256(1) of the Income Tax Act, 1961. The court found that the second question, regarding the taxability of the amount received for surrendering tenancy rights, was conclusively answered by a Supreme Court decision, thus favoring the respondent. The first question, related to the Tribunal's reliance on its own decision in a previous case, was not addressed as it was deemed academic following the resolution of the second question.

• Counselvise Citation: [2005] 140 COUNSELVISE.COM (IT) 676040 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 22-12-2005
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax Vs. D.P.Sandu Bros Chembur P.Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: R K PATEL
• Assessee Lawyers: MANISH BHATT; M S VYAS ASSOCIATES ADVOCATE
• Keywords: Assessment year 1988-89; Income Tax; Taxable; Tenancy Right
• Section: 55; 256(1)

Judgement Text

"ITR/281/1995 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 281 of 1995 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA Sd/- HONOURABLE MS.JUSTICE H.N.DEVANI Sd/- ================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================ COMMISSIONER OF INCOME-TAX - Applicant(s) Versus BHAILALBHAI MATHURBHAI PATEL - Respondent(s) ================================================ Appearance : MR MANISH R BHATT for Applicant(s) : 1,M/S.VYAS ASSOCIATES for Applicant(s) : 1, MR RK PATEL for Respondent(s) : 1, ================================================ ITR/281/1995 2/4 JUDGMENT CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 22/12/2005 ORAL JUDGMENT (Per : HONOURABLE MS.JUSTICE H.N.DEVANI) 1 The Income Tax Appellate Tribunal, Ahmedabad Bench 'B' has referred the following two questions under Section 256(1) of the Income Tax Act,1961 (the Act) at the instance of the Commissioner of Income Tax. “1 Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in relying its own decision in the case of Mahendra R.Divecha when in that case statement of case has already been drawn by the Tribunal in order dtd.27.10.1993? 2.Whether, in view of the spirit behind the amendment to section 55, the Tribunal is right in law in holding that no part of the amount received by the asessee for surrendering of tenancy right is taxable ?” ITR/281/1995 3/4 JUDGMENT 2 The Assessment Year is 1988-89 and the relevant accounting period is Financial Year 1987-88. 3 Heard Mr.M.R.Bhatt, learned Senior Standing Counsel on behalf of the applicant-revenue and Mr.B.D.Karia, learned Advocate on behalf of the respondent-assessee. 4. In so far as question No.2 is concerned, it is common ground between the parties that the issue in controversy stands concluded by a decision of the Supreme Court in the case of Commissioner of Income Tax Vs. D.P.Sandu Bros Chembur P.Ltd. (2005) 273 ITR Pg.1. In the circumstances, it is not necessary to set out the facts and contentions in detail. 5. Applying the ratio of the aforesaid decision ITR/281/1995 4/4 JUDGMENT to the facts of the present case, it is held that the Tribunal was justified in holding that no part of the amount received by the assessee for surrendering the tenancy right is taxable. Question No.2 is, accordingly answered in the affirmative i.e. in favour of the assessee and against the revenue. 6.In so far as question No.1 is concerned, though the same is referred it does not arise as such from the order of the Tribunal, hence, the same is returned unanswered. Considering the fact that the question No.2 stands concluded by the aforesaid decision of the Apex Court, question No.1 is even otherwise rendered academic. 7. The Reference stands disposed of accordingly, with no order as to costs. Sd/- Sd/- (D.A.Mehta,J) (H.N.Devani, J) m.m.bhatt "