IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 11/02/2006
Coram
The Hon'ble Mr.Justice P.D.DINAKARAN
and
The Hon'ble Mr.Justice P.P.S.JANARTHANA RAJA
T.C.(A)No.999 of 2005
and T.C. (A) No. 1000 and 1001 of 2005
The Commissioner of Income-Tax,
Coimbatore. ... Appellant in
all the appeals
-Vs-
M/s.D.Kaveri Ammal ... Respondent in
all the appeals
The above T.C.(Appeals) are preferred under Section 260A of the
Income-Tax Act, 1961 against the order of the Income Tax Appellate Tribunal,
Madras 'D' Bench, dated 2.4.2001 made in ITA Nos.1409 to 1411/ Mds/1999
respectively for the assessment years 1993-94 to 1995-96.
!For Appellant : Mr.T.Ravi Kumar
^For Respondent : ---
:J U D G M E N T
(Judgment of the Court was delivered by P.D.DINAKARAN, J.)
The above tax case appeals are directed against the order of the
Income-tax Appellate Tribunal in ITA Nos.1409 to 1411/Mds/1999 respectively.
2. The Revenue is the appellant. The assessment years involved in
these cases are 1993-1994, 1994-1995 and 1995-1996. The assessee is a
partnership firm. The Revenue, aggrieved by the exclusion of certain income
which has been clubbed by the assessing officer by invoking the provisions of
Section 61 of the Income-Tax Act, 1961, has preferred the above appeals by
raising the following substantial questions of law:-
“1. Whether on the facts and in the circumstances of the case, the
Appellate Tribunal was right in holding any income in respect of business
transaction after 1.11.87 would not be assessed in the hands of the assessee
by invoking Section 61 of the Income-tax Act?
2. Whether, on the facts and in the circumstances of the case the
Income-tax Appellate Tribunal is right in its conclusion that Memorandum of
Understanding does not provide for any sort of revocation of business?”
3. Precisely, the point is whether the Memorandum of Understanding,
which is the subject matter in the assessment order is irrevocable or not
under Section 61 of the Act, which reads as follows:-
“Revocable transfer of assets:
61. All income arising to any person by virtue of a revocable transfer of
assets shall be chargeable to income-tax as the income of the transferor and
shall be included in his total income.”
4. The issue raised in the above questions of law has already been
decided by a Division Bench of this Court, in which one of us was a party
(P.D.DINAKARAN, J.), in T.C.(A)No.814 to 823 of 2004 dated 23.9.2004 (The
Commissioner of Income-Tax, Coimbatore Vs. C.Doraisamy), wherein in
paragraphs 3 and 4, it is held thus,
“3. The Tribunal found that the transfer of assets in the
memorandum of understanding in question is absolute and irrevocable. That
apart, the assessing officer did not reach any conclusion that the memorandum
of understanding was sham transaction. Therefore, the transaction is held to
be absolute and irrevocable and there is no question of revocation of the
assets in terms of the memorandum of understanding as the memorandum of
understanding does not provide for any sort of revocation. Hence, the
inclusion of income in respect of business transaction on or after 1.11.1987,
which really has gone in favour of the person who has taken over the business,
cannot be supported either on law or on facts.
4. Therefore, we are unable to take a different view as the one
taken by the Tribunal that the transfer of assets does not attract section 61
of the Act. Hence, we find no merit in these appeals and the same are
dismissed.”
5. Similar view was taken by this Court in the assessee’s own
case, in T.C.(A) Nos.645 to 649 of 2005, dated 24.10.2005.
6. In view of the above settled proposition of law, finding no
substantial question of law that arises for consideration of this Court, the
above appeals stand dismissed.
Index : Yes
Website: Yes
sra
To
1.The Assistant Registrar,
Income Tax Appellate Tribunal
Chennai Bench “D”.
2.The Secretary, Central Board
of Direct Taxes, New Delhi.
3.The Commissioner of Income Tax
(Appeals), Coimbatore.
4.The Assistant Commissioner of
Income-tax, SIC, Erode.
