TMI Blog2017 (9) TMI 1732X X X X Extracts X X X X X X X X Extracts X X X X ..... . When statute confers a limited right of appeal only in a case which involves substantial questions of law, it is not open for this Court to sit in appeal over the factual findings arrived at by the Appellate Tribunal. There is no substantial question of law involved in this appeal. - Decided against revenue - Tax Case Appeal No. 377 of 2017 - - - Dated:- 12-9-2017 - THE HON'BLE MS.INDIRA BANERJEE, CHIEF JUSTICE AND THE HON'BLE MR.JUSTICE M.SUNDAR For Appellant : Mr.T.R.Senthilkumar For Respondent : Mr.R.Vijayaraghavan for M/s.Subbaraya Aiyar Padmanabhan JUDGMENT ( Judgment of the Court was made by The Hon'ble Chief Justice ) This appeal is against an order dated 28th September 2016 passed by the Income Tax Appellate Tribunal, C Bench, Chennai, allowing the appeal of the Assessee being ITA No.1851/Mds/2016 relating to Assessment Year 2012-13 against the order dated 29th April 2016 passed by the Commissioner of Income Tax (Appeals)-1, Coimbatore dismissing the Assessee's appeal No.111/15-16 against an order of assessment dated 31.3.2015. 2 The Respondent Assessee, a Doctor by profession and Proprietor of a concern 'The Eye Foundation& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain deeming provisions as well. Thus, in a case in transfer of a capital asset by a partner to a firm or by a member to association of persons or body of individuals, the amount recorded in the books of account of firm, association or body as the value of the capital asset, shall be deemed to be the full value of consideration as a result of such transfer. By way of distribution of capital asset by a firm association of persons or body of individuals, the FAIR MARKET VALUE, of the assets as on the date of transfer shall be deemed to be the full value of consideration as a result of such transfer consequential amendment to sections 47 and 49 have also been proposed. 7 By an explanatory Circular No.495 dated 22nd September 1987, the Central Board of Direct Taxes (CBDT) clarified as under : 24.2 With a view to blocking this escape route for avoiding capital gain tax, the Finance Act, 1987 has inserted new sub-section (3) in section 45. The effect of this amendment is that profits and gains arising from the transfer of a capital asset by a partner to a firm shall be chargeable as the partner's income of the previous year in which the transfer took place. For purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of law involved. (2A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period. (3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (4) The appeal shall be heard only on the question so formulated, and the respondents shall at the hearing of the appeal, be allowed to argue that the case does not involve such question: Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question. (5) The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit. (6) The High Court may determine any issue which - (a) has not been determined by the Appellate Tribunal; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73) came up for consideration and their Lordships held that it did not mean a substantial question of general importance but a substantial question of law which was involved in the case. In Sir Chunilal case [1962 Supp (3) SCR 549 : AIR 1962 SC 1314] the Constitution Bench expressed agreement with the following view taken by a Full Bench of the Madras High Court in Rimmalapudi Subba Rao v. Noony Veeraju [AIR 1951 Mad 969 : (1951) 2 MLJ 222 (FB)] : (Sir Chunilal case [1962 Supp (3) SCR 549 : AIR 1962 SC 1314] , SCR p. 557) When a question of law is fairly arguable, where there is room for difference of opinion on it or where the Court thought it necessary to deal with that question at some length and discuss alternative views, then the question would be a substantial question of law. On the other hand if the question was practically covered by the decision of the highest court or if the general principles to be applied in determining the question are well settled and the only question was of applying those principles to the particular fact of the case it would not be a substantial question of law. This Court laid down the following test as proper test, for determining wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case may be summarised thus : (i) An inference of fact from the recitals or contents of a document is a question of fact. But the legal effect of the terms of a document is a question of law. Construction of a document involving the application of any principle of law, is also a question of law. Therefore, when there is misconstruction of a document or wrong application of a principle of law in construing a document, it gives rise to a question of law. (ii) The High Court should be satisfied that the case involves a substantial question of law, and not a mere question of law. A question of law having a material bearing on the decision of the case (that is, a question, answer to which affects the rights of parties to the suit) will be a substantial question of law, if it is not covered by any specific provisions of law or settled legal principle emerging from binding precedents, and, involves a debatable legal issue. A substantial question of law will also arise in a contrary situation, where the legal position is clear, either on account of express provisions of law or binding precedents, but the court below has decided the matter, either ignoring or acting contrary to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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