Research › Search › Judgment

Madras High Court · body

2006 DIGILAW 339 (MAD)

The Commissioner of Income-Tax v. D. Kaveri Ammal

2006-02-11

P.D.DINAKARAN, P.P.S.JANARTHANA RAJA

body2006
Judgment :- (The above T.C.(Appeals) are preferred under Section 260A of the Income-Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras ‘D’ Bench, dated 2.4.2001 made in ITA Nos.1409 to 1411/Mds/1999 respectively for the assessment years 1993-94 to 1995-96.) P.D. Dinakaran, J. The above tax case appeals are directed against the order of the Income-tax Appellate Tribunal in ITA Nos.1409 to 1411/Mds/1999 respectively. 2. The Revenue is the appellant. The assessment years involved in these cases are 1993-1994, 1994-1995 and 1995-1996. The assessee is a partnership firm. The Revenue, aggrieved by the exclusion of certain income which has been clubbed by the assessing officer by invoking the provisions of Section 61 of the Income-Tax Act, 1961, has preferred the above appeals by raising the following substantial questions of law:- "1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding any income in respect of business transaction after 1.11.87 would not be assessed in the hands of the assessee by invoking Section 61 of the Income-tax Act? 2. Whether, on the facts and in the circumstances of the case the Income-tax Appellate Tribunal is right in its conclusion that Memorandum of Understanding does not provide for any sort of revocation of business?" 3. Precisely, the point is whether the Memorandum of Understanding, which is the subject matter in the assessment order is irrevocable or not under Section 61 of the Act, which reads as follows:- "Revocable transfer of assets: 61. All income arising to any person by virtue of a revocable transfer of assets shall be chargeable to income-tax as the income of the transferor and shall be included in his total income." 4. The issue raised in the above questions of law has already been decided by a Division Bench of this Court, in which one of us was a party in T.C.(A)No.814 to 823 of 2004 dated 23.9.2004 (The Commissioner of Income-Tax, Coimbatore Vs. C. Doraisamy), wherein in paragraphs 3 and 4, it is held thus, "3. The Tribunal found that the transfer of assets in the memorandum of understanding in question is absolute and irrevocable. That apart, the assessing officer did not reach any conclusion that the memorandum of understanding was sham transaction. C. Doraisamy), wherein in paragraphs 3 and 4, it is held thus, "3. The Tribunal found that the transfer of assets in the memorandum of understanding in question is absolute and irrevocable. That apart, the assessing officer did not reach any conclusion that the memorandum of understanding was sham transaction. Therefore, the transaction is held to be absolute and irrevocable and there is no question of revocation of the assets in terms of the memorandum of understanding as the memorandum of understanding does not provide for any sort of revocation. Hence, the inclusion of income in respect of business transaction on or after 1.11.1987, which really has gone in favour of the person who has taken over the business, cannot be supported either on law or on facts. 4. Therefore, we are unable to take a different view as the one taken by the Tribunal that the transfer of assets does not attract section 61 of the Act. Hence, we find no merit in these appeals and the same are dismissed. 5. Similar view was taken by this Court in the assessee's own case, in T.C.(A) Nos.645 to 649 of 2005, dated 24.10.2005. 6. In view of the above settled proposition of law, finding no substantial question of law that arises for consideration of this Court, the above appeals stand dismissed.