COMMISSIONER OF INCOME TAX V. MRS.SAIRUNNISHA

T.A./45/2008

AI Insights

The case revolves around an appeal by the Commissioner of Income Tax, Patna against Mrs. Sairunnisha concerning the wealth tax assessment for the year 1997-98. The primary legal contention was the rejection of the fair market valuation by the ITAT and the subsequent allowance of exemptions for certain assets deemed commercial in nature. Initially, the Assessing Officer assessed the wealth of Mrs. Sairunnisha at Rs.1,07,04,670, which was contested and led to a series of appeals. The CIT(Appeals) favored Mrs. Sairunnisha, which was upheld by the ITAT. The Revenue's appeal to the High Court was dismissed on procedural grounds related to the tax effect threshold for maintainability of the appeal.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 736135 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 06-12-2013
• Assessment Year: misc
• Laws Referred To: Wealth Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B PODDAR
• Assessee Lawyers: D ROSHAN R KUMARI
• Keywords: Commercial assets; Income Tax; Tax effect; Tax effect; Wealth Tax; Fair Market Valuation
• Section: 16(5)

Judgement Text

" IN THE HIGH COURT OF JHARKHAND AT RANCHI T.A No. 45 of 2008 Commissioner of Income Tax , Patna Vs. Mrs. Sairunnisha ­­­­­ CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE APARESH KUMAR SINGH For the Appellant/Petitioner : M/s.D.Roshan, Sr.SC(IT), R.Kumari For the Respondents : M/s.B.Poddar, Senior Advocate, D.Poddar Mishra, P .Poddar, D.Sinha ­­­­­­ Dated 6 th December,2013 Being aggrieved by the order dated 26.12.2007 passed by the Income Tax Appellate Tribunal in respect of the Assessment Years – 1997­98, the Revenue filed this appeal, raising the question of law that ITAT was in law not justified in rejecting the fair market valuation of Assessing Officer and that ITAT was not right in allowing assets to be exempted as commercial assets. 2. Mrs. Sairunnisha, respondent assessee, is the wife of Mohd. Sayeed, who is the proprietor of M/s.Shaad & Co. and one of the partners of M/s. Chhotanagpur Cattle Food Supply Co., and who is also allegedly accused in misappropriation of funds, charged by the CBI in the Animal Husbandry Department. The assessee filed his returns of wealth showing net wealth of Rs.45,49,458/­ for the Assessment Year 1997­98. On returns being filed, the Assessing Officer passed wealth tax assessment order under Section 16(5) of the Wealth Tax Act in respect of the assessment years 1997­98 by estimating the wealth of the assessee at Rs.1,07,04,670/­ by observing that no deduction of liability in respect of share of Madhuban Market Complex is given as assessee could not produce any supporting evidence for his claim. 3. On appeal. CIT(Appeals), vide its order dated 3.10.2006, allowed the appeal of the assessee, inter alia, issuing the direction to the Assessing Officer:­ (i) to assess the net wealth of the assessee on substantive basis (ii) to exclude the value of the assets from the computation of taxable wealth on the ground that most of those assets were commercial in nature and the agricultural land was beyond 25 km from Municipal limit. (iii) to adopt the value as shown by the appellant­respondent in his returns of income. 4. Being dissatisfied with the order passed by the CIT(Appeals), the Revenue preferred appeal before the Income Tax Appellate Tribunal and the Tribunal, vide its order dated 26.12.2007, dismissed the appeal preferred by the Revenue, confirming the order of CIT(Appeals). Being aggrieved by the dismissal of its appeal by the Tribunal, the Revenue has preferred these appeal. We have heard Mr.D.Roshan, learned counsel appearing for the appellant and also heard Mr.B.Poddar, learned Senior Counsel appearing for the respondent. Learned Senior Counsel, Mr.B.Poddar, submitted that the tax effect involved in this appeal is less than Rs.4,00,000/­ and therefore, as per Instruction No.2/2005 dated 24.10.2005 prescribing the limit for preferring appeal/reference before the appellate authority, the appeal preferred by the Revenue is not maintainable. This statement is not disputed by the learned counsel for the Revenue. The relevant portion of the said Instruction No.2/2005 reads as follows:­ “2.In partial modification of the above instruction, it has now been decided by the Board that appeals will henceforth be filed only in cases where the tax effect exceeds the revised monetary limits given hereunder:­ Sl. No. Income Tax Tax Effect (i) (ii) (iii) Appeal before Appellate Tribunal Appeal under section 260A Appeal before the Supreme Court Rs.2,00,000/­ Rs.4,00,000/­ Rs.10,00,000/­” Since the tax effect involved in this appeal is less than Rs.4,00,000/­, this appeal is dismissed as not maintainable. (R.Banumathi, C.J.) (Aparesh Kumar Singh, J.) dey "