TMI Blog2015 (5) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... tended to fall within the charging section. - Decided in favour of assessee. - KS JHAVERI AND K.J.THAKER, JJ. FOR THE APPELLANT : MR SUDHIR M MEHTA, ADVOCATE FOR THE OPPONENT : MR SN DIVATIA, ADVOCATE JUDGMENT : (PER : HONOURABLE MR.JUSTICE K.J.THAKER) 1. By way these Appeals, the Revenue is before this Court challenging the order of the Income Tax Appellate Tribunal, Ahmedabad Bench 'C' in :- Tax Appeal ITA No. Asstt. Year 2/2006 2317/Ahd./1999 1996-1997 3/2006 3429/Ahd/04 1998-1999 2. The brief facts as they cull out from the record is that the assessee was assessed to tax by the Appellant. The assessee was a Sitting Judge of the High Court of Gujarat. He was elevated to the Bench on 18.09.1995. Prior to this, he was practicing as an Advocate in the High Court of Gujarat. After being elevated to the post of Judge of High Court and for this reason he had discontinued his legal profession as an advocate. The assessee received certain outstanding dues from his past clients. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) of the Income Tax Act were invoked and the amounts which were received after discontinuation of the legal profession was turned to be taxable under the Head 'Income from Business Occupation' and those amounts were added to the total income in the respective years with the aid of Section 176(4) of the Income Tax Act. However, both the authorities concerned upheld the said addition made by the Assessing Officer for the year 1998 - 1999. The Revenue being aggrieved came up with the following question of law :- Whether the Appellate Tribunal is right in law and on facts in holding that professional fee received by the assessee after the alleviation to the post of Judge of the Hon'ble High Court is not taxable u/s. 4 read with section 176(4) of the I.T. Act? 4. The challenge is based on interpretation of Section 176(4) of the Income Tax Act, which reads as under :- Discontinued business. (4) Where any profession is discontinued in any year on account of cessation of the profession by, or the retirement or death of, the person carrying on the profession, any sum received after the discontinuance shall be deemed to be the income of the recipient and cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve decisions of Calcutta High Court in the case of Justice R.M. Datta, cited supra, and ITAT decision in the case of Justice Kuldeep Singh vs. ITO (cited supra), are fully applicable to the facts of the appellant's case. This view is taken by me because the decision in the case of Justice R.M. Datta has been delivered by the Division Bench of Calcutta High Court whereas the decision of Andhra Pradesh High Court relied on by the Assessing Officer has been given by a Single Judge. The ITAT Chandigarh Bench had considered both the decisions of Calcutta High Court and Andhra Pradesh High Court as under :- There is no getting away from the fact that a decision by a High Court which may not be the jurisdictional High Court, which is only direct and existent decision, has to be given its due weight and respect. The decision of Calcutta High Court in the case of Justice R.M. Dutta (supra) was a comprehensive decision which dealt with the issue in its entirety and in all its facts. It is a settled position of Law, as observed by the Supreme Court in the case of CIT vs. Elphinstone Spg. Wvg. Mills Co. Ltd. (1960) 40 ITR 142 that if the works of a taxing statute fail, then so must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge of High Court is not taxable in view of the judgment reported at page 86 of the year 1989 (CIT Vs. Lt. R.N. Datta and at page 251 of the year 1993 ITR in Justice Kuldip Singh Vs. ITO) and hence the said income is not included the statement of total income. The Assessing Officer added ₹ 13,93,630/- for A.Y. 1998-99 and ₹ 4,52,277/- for A.Y. 1996- 97. The assessee pointed out a judgment of Hon'ble Calcutta High Court in the case of CIT Vs. Justice R.N. Dutta (180 ITR 86) in support of the note given alongwith the return of income. The A.O. was of the view that section 176 was introduced to bring under the purview of taxable income of such receipts. The A.O. noticed that on the issue the decision cited by the assessee, Calcutta High Court is not only the decision on the issue. The Hon'ble A.P. High Court had clearly decided on a parallel case wherein such receipts were clearly held to be taxable in the case of V. Parthasarathy Vs. Addl. CIT 103 ITR 508. The A.O. has also noted that there are contrary judicial pronouncement on a similar/identical case and thus in view of the Supreme Court's decision if there exists no contrary decision of any other High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme of computation for quantifying the amount which will not fall within the charging section. 11. Having heard the learned Advocates appearing for the parties and perusing the records of the case/s, we are unable to persuade ourselves to take a different view than that which is taken by the Tribunal to hold that Section 176(4) of the Act does not contain any deeming provision which treats such receipts as as incomplete and which would fall within the head Provisions 'Gains of Business Profits or vocation and it cannot be taxed as income from other sources under Section 176 of the Act. 12. Having considered the decision on which the Tribunal has placed heavy reliance and the decision of the Delhi High Court, we do not think that any other view than that which is taken by the Tribunal can be taken in the facts and circumstances of this case. 13. The question posed before us is answered in favour of the assessee and we hold that the appellant Tribunal was right in law and on facts in holding that the provisional fee received by the assessee is taxed under Section 4 read with Section 176(4) of the Income Tax Act, 1961. 14. Hence, the question/s raised in these Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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