TMI Blog2009 (8) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... t orders. There is no dispute about the proposition that there is no inherent right of appeal. It is to be specifically conferred by the statute providing for an appeal. The appellate authority in an appeal against an order of assessment has power to confirm, reduce, enhance or annul the assessment or to set aside the assessment or refer the case back to the ITO or make fresh assessment (s. 251). It is thus clear that what remains is final order after giving effect to the orders of the appellate authority, is an order under ss. 143 and 144. It is in this way appeal is of continuation of the exercise of assessing the income of the assessee. Substantive statutory right of appeal, by way of s. 246 thus is made available to the aggrieved person/assessee. Suffice it to say that such substantive right was not resorted to, in the case on hand, by the petitioner/assessee. As apparent from s. 264 that there is a wide power with the CIT under revisional jurisdiction. He may call for records of proceeding under this Act, may make such inquiry or cause such inquiry to be made and pass such order thereon however, not being an order prejudicial to the assessee. Even though, power vested w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he writ petition; judicial review by this Court under Arts. 226, 227 has its own self-impose restrictions and limitations. In our considered opinion, there is no case for interference in the order passed by the learned CIT in the case on hand, question No. 3 accordingly answered against the petitioner. - S. B. DESHMUKH AND U. D. SALVI JJ. Ms. D. V. Manerkar, S. Parthasarathi, P. Dinesh and Santosh H. Bharne, for the Appellant S. R. Rivonkar, for the Respondent JUDGMENT By the Court-Rule returnable forthwith. Taken up for final hearing. Mr. S.R. Rivonkar, Government advocate waives service. 2. The petitioner, in this writ petition, has challenged the order passed by the learned CIT, Panaji, State of Goa in a revision application bearing No. F.No. CIT-P/264 (22)/07-08/1323 dt. 26th Feb., 2009. 3. The petitioner (hereinafter referred to as 'assessee' ) filed return of income for the asst. yr. 2005-06 of his income on 22nd Dec., 2005. The assessee declared his income of ₹ 1,33,920. The statement of accounts, forming part of his return of income disclosed the receipt of compensation of ₹ 25 lakhs received by him during the financial year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel for the petitioner fairly concedes that the order passed by the AO under sub-s. (3) of s. 143 was not challenged by filing appeal, by the assessee. He does not dispute the date of passing of the order by the AO under sub-s. (3) of s. 143. He also does not dispute the date of filing of the revision application before the learned CIT. The learned counsel for the petitioner however submitted that the sum of ₹ 25 lakhs received by the assessee cannot be considered to be compensation on account of stopping of fish farming by the assessee in the property in question. He submitted that sub-s. (va) of s. 28 has no application to the case on hand. It is his alternate submission that the sum received by the assessee of ₹ 25 lakhs can be considered to be the capital gain. He further submitted that the order passed by the learned CIT, under revisional jurisdiction is non-speaking order. He therefore seeks annulment of the order passed by the CIT and that of the order passed by the AO under the said Act 1961. The learned counsel for the petitioner relies on some judicial pronouncements to which we shall make reference at appropriate stage. The counsel appearing for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd.' company of the other part represented by its director one Mr. Parag Ishwarlal Mody. The description of the landed property is given in this agreement dt. 18th Aug., 2004. In para 6 of the agreement it has been stated that the first party (assessee) will be deprived of their business opportunities and the resultant income. It is further mentioned in this para 6 that the company i.e. M/s Goa International School (P) Ltd. has agreed to pay sum of ₹ 25 lakhs towards the compensation to the first party which includes the present assessee. This agreement continues in or about nine paras. We have minutely considered all these nine items and the terms and conditions of the agreement apart from stipulation of payment of ₹ 25 lakhs to the assessee. Item No. 8 of the agreement provides a declaration by the assessee that w.e.f. 31st Aug., 2004 assessee shall have no claim of any kind whatsoever in respect of the said ponds located in survey No. 15/0 and the sluice gates nor the assessee shall have any claim of any kind whatsoever against the company and/or first five owners. Item No. 9 of this agreement duly signed by the assessee further makes it clear that assessee will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the assessee chargeable to income-tax under the head of profits and gains of business or profession. At this juncture, we shall also refer the contention raised by the petitioner i.e., alternate submission on behalf of the petitioner that sum of ₹ 25 lakhs was received by the petitioner towards capital gains. Capital gain is provided under s. 45 of the Act 1961. It has been laid down under sub-s. (1) of s. 45 that the profits and gains arising from the transfer of a capital asset effected for the previous year shall, save as otherwise provided in various sections of the Act 1961 enumerated there under sub-s. (1) be chargeable to income-tax under the head capital gains, and shall be deemed to be the income of the previous year for which the transfer took place. Thus, sub-s. (1) of s. 45 contemplates any profits or gains arising from the transfer of capital assets effected in the previous year. In the case on hand, we are of the opinion that there is no profits or gains in favour of the assessee arising from the transfer of capital asset. Assessee was not owner of any asset(s) in the first place and there is no transfer of such alleged capital asset during the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. on 4th May, 1938. The assessee was one of the promoters of the said company. The Dalmia Dadri Cement Company agreed to pay him a commission of 1 per cent on the yearly net profits earned by the company from the said cement factory. That agreement was to subsist so long as the original agreement dt. 2nd April, 1938 subsisted. The Dalmia Dadri Cement Company acted upon the agreement made on 27th May, 1938 uptill 1950 and, thereafter, did not pay commission agreed to be paid. The assessee was constrained to file the suit against the company and it was ended in a compromise which was made a decree of Court. Under that decree, the assessee was to be paid ₹ 15,000 as commission for the years 1951 and 1952 and ₹ 15,000 as commission for the year 1953. Further, the assessee was to be paid ₹ 70,000 by way of compensation for the termination of the agreement between him and the company on 1st Jan., 1954. That compensation was received by the assessee on 11th June, 1954. The assessee claimed that the sum of ₹ 70,000 was capital receipt, not taxable in his hands, was rejected by the ITO holding that the sum of ₹ 70,000 was a remuneration paid once and for al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case, are all together different, to that of the facts in the case at hand; striking difference is in respect of lease in that case in favour of the assessee. Ratio of this judgment also does not help the present petitioner. 10. Judgment of the Hon'ble Supreme Court in the matter of Oberoi Hotel (P) Ltd. vs. CIT (1999) 152 CTR (SC) 474: (1999) 236 ITR 903(SC), is also pointed out to us. Facts have been listed by Hon'ble Supreme Court in para 2 of this judgment. Here also we have noticed the distinguishable facts of the case. In our opinion, this judgment of Hon'ble Supreme Court also has no application to the present case on hand. 11. The counsel of the petitioner also referred to the judgment of the High Court in the matter of CIT vs. M. Appukutty (2001) 171 CTR (Ker) 145: (2002) 253 ITR 159(Ker) that in the case transfer of possession of Shop No. 9/866 is exempted from the computation of capital gains arising during the year was under consideration. By agreement dt. 3rd July, 1986, the possessory right of Shop No. 9/866 was transferred by the firm in favour of one Mohammed Berami and others for a consideration of ₹ 1,00,000. Sale deed was executed for tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such inquiry to be made and, subject to the provisions of this Act, may pass such order thereof, not being an order prejudicial to the assessee, as he thinks fit. It is apparent from s. 264 that there is a wide power with the CIT under revisional jurisdiction. He may call for records of proceeding under this Act, may make such inquiry or cause such inquiry to be made and pass such order thereon however, not being an order prejudicial to the assessee. Even though, power vested with the learned CIT seems to be wide under s. 264, it cannot be said to be too wide to that of the power vested with the appellate authority while deciding an appeal filed by the assessee under s. 246. There is a discretion vested with the CIT to pass such order as he deems fit on the facts obtaining in the case. However, such discretion has to be exercised by the CIT judiciously i.e. in a judicious manner. We deem it appropriate to refer to the judgment of the Hon'ble Supreme Court in the matter of the State of Kerala vs. K. M. Chariya Abdulla Co. AIR 1965 SC 1585 (Three Judge Bench). In our view, two paras from this judgment i.e. para Nos. 15 and 17 are material and significant. The principles deducib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erit in this ground. The order passed by the learned CIT Annex. (f) refers to the factual position in para 4.2. Contention raised by the petitioner pertaining to capital gains within the parameters of s. 45 of the Act 1961 has been considered in para 7.1 of the order by the CIT. The categorical observation made by the CIT that the assessee was not having any legal rights as a tenant in the property sold by the land owner to M/s Goa International School (P) Ltd. is legal and proper. With this observation, learned CIT has repelled the ground pertaining to s. 45 of the Act 1961. In para 7, the learned CIT has also referred to the submissions made by the Authorised Representative and in para 6 reference is made to the written submissions made by the petitioner's Authorised Representative Mr. Mahesh Dhond, chartered accountant. The learned CIT reached the conclusion that there is no transfer of any capital asset by the assessee for the compensation received in his hands as capital gains. Learned CIT reached to the conclusion that there is no case for interference with in revisional jurisdiction. On examination of the order passed by the learned CIT within the parameters of s. 264 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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