IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 24/06/2002
Coram
The Honourable Mr. Justice V.S. SIRPURKAR
and
The Honourable Mr. Justice N.V. BALASUBRAMANIAN
T.C. No.1212 OF 1987
The Commissioner of
Income-tax, Tamilnadu-V ::
Chennai-34 ...Petitioner
:versus:
J.H. Tarapore (deceased) ::
rep. by Executor T. Raghavan
Chennai ... Respondent
Tax Case References arising out of the order of the
Income Tax Appellate Tribunal in ITA No.1371(Mds.)
1984 for the Assessment Year 1979-80
!For Respondent :: Mr. T.C.A. Ramanujam
(Revenue) Sr. Standing Counsel for IT
^For Petitioner :: Mr. V. Ramachandran, S.C.
(Assessee) For Mrs. Anitha Sumanth
:JUDGMENT
V.S. SIRPURKAR, J.
The questions referred, at the instance of the Revenue, to us
are as follows:
“1. Whether on the facts and in the circumstances of the case the
Appellate Tribunal was right in holding that the sum of Rs.9,82,068/- being
the amount received under the arbitration award for the work done in
connection with the feeder canals for the Farakka Barrage Project during the
period 1-1-1966 to 30-9-1969 was not a revenue receipt but only a capital
receipt in the hands of the assessee?
2. Whether on the facts and in the circumstances of the case the
Appellate Tribunal was right in holding that the source being the work
executed by the firm and that as it passed on to the assessee, Shri J.H.
Tarapore in terms of settlement deed, it can only be an application of
income?”
2. We are not setting out the facts involved as they are
covered in paragraphs 4 to 7 of our judgment in T.C. No.587 and 588 of 1984.
3. In T.C. No.587 of 1984, which was pertaining to the
assessment year 1974-75, we have already taken a view that the amounts which
have been received for the work done for the period earlier to the dissolution
of the firm would be assessed as “income” at the hands of the assessee, who
was none else but the erstwhile partner of the firm and who continued the very
same business of the firm after the dissolution of the firm. The assessee
also executed the unfinished work of the contract and also proceeded to do
some more works in pursuance of the contract. Even in respect of the works
done after the dissolution of the firm, we have taken a view in T.C. No.588
of 1984 that even such receipt would amount to “income” in the hands of the
assessee. In that view, we do not deem it necessary to take any different
view in respect of the amount in question Rs.9,82,068/- (Rs.9,90,426 minus
interest of Rs.8,358/-) which was nothing but a fall-out of the arbitration
award dated 8-5-1978 made at the instance of the assessee. We have already
held the similar amount as the “revenue receipt” and have negatived the
contention of the assessee that the amounts received for the work done was in
the nature of “capital receipt”.
4. In that view, we would answer the questions referred
against the assessee and in favour of the Revenue.
Index:yes
Website:Yes
(V.S.S., J.) (N.V.B., J.)
Jai
24-06-2002
Sd/-
Assistant Registrar
/TRUE COPY/
Sub Assistant Registrar (Stat./C.S.)
To:
1. The Asst. Registrar
Income-tax Appellate Tribunal
II Floor, Besant Nagar
Chennai
2. The Secretary
Central Board of Revenue, New Delhi
3. The Commissioner of Income-tax (Appeals)I
Madras-34
4. The 9th Income Tax Officer
City Circle-V, Madras-34
5. The Commissioner of Income Tax
Tamil Nadu, Madras
V.S. SIRPURKAR, J.
And
N.V. BALASUBRAMANIAN, J.
JUDGMENT in
T.C. No.1212 of 1987