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Jivatlal Purtapshi Vs. Commissioner of Income-tax, Bombay - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberIncome-tax Reference No. 39 of 1962
Judge
Reported in[1967]65ITR261(Bom)
ActsIncome Tax Act, 1922 - Sections 33
AppellantJivatlal Purtapshi
RespondentCommissioner of Income-tax, Bombay
Appellant AdvocateR.J. Kolah, Adv.
Respondent AdvocateG.N. Joshi, Adv.
Excerpt:
direct taxation - jurisdiction of tribunal - section 33 of income tax act, 1922 - statement recorded by appellate assistant commissioner that income tax officer had no objection to deletion of certain item - whether tribunal has jurisdiction to deal with same item - notice of motion taken for producing additional evidence by department - no relevant material found for submission of additional evidence - held, tribunal had no jurisdiction to deal with said item. - .....appears that as a result of these negotiations, an agreement was arrived at between the inspecting assistant commissioner of income-tax, 'l' range, bombay, and the assessee, as could be seen from the assessee's letter to the inspecting assistant commissioner dated july 21, 1958, appearing at annexure 'c' to the statement of the case and the letter from the inspecting assistant commissioner of income-tax to the assessee to august 5, 1958, appearing at annexure 'd'. according to this settlement, it appears to have been agreed to between the parties that the sum of rs. 4,72,500, which had been included in the assessee's assessment for the assessment year 1948-49, should be deleted and since that assessment order was before the appellate assistant commissioner in appeal, the department.....
Judgment:

Desai, J.

1. In the assessment of the assessee for the assessment year 1948-49, corresponding to S. Y. 2003 as the previous year thereof, the Income-tax Officer had included a sum of Rs. 4,72,500 as part of the branch profits of the assessee arising ar Radhanpur. While that appeal against the assessment order, which, inter alia, challenged the said inclusion of Rs. 4,72,500 was pending, there were negotiations between the assessee and the department with regard to a large number of disputes relating to the income of the assessee in several different kinds of transactions. It appears that as a result of these negotiations, an agreement was arrived at between the Inspecting Assistant Commissioner of Income-tax, 'L' Range, Bombay, and the assessee, as could be seen from the assessee's letter to the Inspecting Assistant Commissioner dated July 21, 1958, appearing at annexure 'C' to the statement of the case and the letter from the Inspecting Assistant Commissioner of Income-tax to the assessee to August 5, 1958, appearing at annexure 'D'. According to this settlement, it appears to have been agreed to between the parties that the sum of Rs. 4,72,500, which had been included in the assessee's assessment for the assessment year 1948-49, should be deleted and since that assessment order was before the Appellate Assistant Commissioner in appeal, the department should concede in that appeal to the deletion of the said amount from the assessment. In accordance with this argument, on August 7, 1959, when the Appellate Assistant Commissioner decided the appeal, the Income-tax Officer conceded the deletion of the said amount of Rs. 4,72,500 and the Appellate Assistant Commissioner, after recording the said concession in his order, directed the deletion of the said amount in the following terms :

'At the time of the hearing of appeal, the Income-tax Officer appeared and conceded the point that the credit of Rs. 4,72,500 represents sale of ornaments and that he has no objection for its exclusion from the assessment. The addition is, therefore, deleted.'

2. After having agreed to the deletion of the said amount, the department preferred an appeal to the Income-tax Appellate Commissioner complaining that the item of Rs. 4,72,500 was wrongly deleted. At the hearing of the appeal before the Tribunal, the counsel for the assessee contended, inter alia, that the appeal was not competent, nor had the Tribunal jurisdiction to allow the matter to be agitated before it and decide it on merits. Without prejudice to these contentions, the counsel also argued the matter on merits. The Tribunal was not much impressed by the counsel's preliminary contentions, but in view of the contentions which were raised on merits, it sent the matter back to the Appellate Assistant Commissioner for hearing an disposal according to law. The assessee then made an application under section 66(1) of the Indian Income-tax Act requesting the Tribunal to raise questions, which arose on the preliminary contentions raised by it, and the Tribunal accordingly drew up a statement of the case and referred to this court the following two questions :

'1. Whether, on the facts and in the circumstances of the case, the Income-tax Officer's appeal against the deletion of the item of Rs. 4,72,500 was maintainable and

2. Whether the Tribunal had jurisdiction to deal with the said item of Rs. 4,72,500 in the face of the Appellate Assistant Commissioner's statement that the Income-tax Officer had conceded the point and had no objection to the exclusion of the said sum of Rs. 4,72,500 from the assessmen ?'

3. In our opinion, there is no doubt whatsoever that the second question must be answered in favour of the assessee and, if the said question is so answered, the first question does not survive.

4. From the facts which we have already stated and from the two documents to which we have already referred, there is no doubt whatsoever that the item of Rs. 4,72,500 was agreed to be deleted from the assessment of the assessee and it was further agreed that the assessee's claim in appeal in respect of that item should not be contested and accepted by the department before the appellate authority. It is also clear from the appellate order that such a concession was, in fact, made before the appellate authority and an order deleting the said amount from the assessment of the assessee was accordingly passed by the Appellate Assistant Commissioner. It is, therefore, impossible that the department could be treated as being aggrieved by this part of the order so as to entitled to take an appeal to the Tribunal. An appeal to the Tribunal could only be taken against a part of the order against which the appellant can be said to be feeling aggrieved. What is voluntarily accepted cannot give rise to a grievance which can be taken further in appeal. In the appeal memo, which was filed by the department the only ground taken was that the deletion of the item by the Appellate Assistant Commissioner was erroneous. The said ground was obviously unsustainable, since there could be no error on the part of the Appellate Assistant Commissioner in accepting the concession which was made by the department before him. In these circumstances, the preliminary contentions which were raised on behalf of the assessee before the Tribunal, were entitled to succeed and the Tribunal should have held in favour of the assessee that the appeal of the department in respect of the deletion of the said item was neither competent nor capable of being entertained by the Tribunal.

5. The department has taken out a notice of motion whereby it wants produce some additional evidence to explain the circumstances in which the concession came to be made by the Income-tax Officer before the Appellate Assistant Commissioner. The explanation is based on certain notes alleged to have been made by the Commissioner of Income-tax on January 28, 1958, in connection with the proposed settlement between the assessee and the department. It is said that, in accordance with these notes, the department was not prepared to an unconditional deletion of the item of Rs. 4,72,500, but was agreeable to delete it on certain terms. We do not think it necessary to go into this additional evidence, which the department wants to produce by the notice of motion which it has taken out, because the alleged notes are of January 18, 1958, whereas the compromise which has been entered into between the parties is in the months of July and August, 1958. Moreover, the terms of the compromise as recorded by either party do not make reference to any such condition as stated in the notes. We, therefore, dismiss the notice of motion.

6. In the result, question No. 2 is answered in the negative and, in view of that answer, question No. 1 does not require to be answered. The Commissioner will pay the costs of the assessee in the reference. There will, however, be no order as to costs on the notice of motion.

7. Question No. 2 answered in the negative.


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