TaxTMI 
TaxTMI 
2009 (8) TMI 1126
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2007 passed an order holding that the total income of the assessee was Rs. 16,45,051. The demand notice was directed to be issued under s. 271(1)(c) of IT Act, 1961. This order was passed by the ITO, Ward 1(1), Panaji (hereinafter referred as AO). The order passed by AO was challenged by the assessee by filing revision application under s. 271 (sic) of the IT Act, 1961 (hereinafter referred to as the Act, 1961) before the learned CIT, Panaji, Goa. This revision application after hearing the parties, is dismissed by the learned CIT by his order passed on 26th Feb., 2009. 4. Return of income filed by the assessee declaring total income of Rs. 1,33,920 was processed under s. 143(1) by the AO. Notice under s. 142(1) of the Act 1961 was issued to the assessee. In response to the notice, assessee's Authorised Representative appeared before the AO and was heard. The assessee contended that one Mr. Vasant Manohar Wagle was the owner of the property known as 'Coddo', surveyed under No. 5679 at folio 05 of Book No. B-15 in the records of Taluka Office of Tiswadi, Panaji, Goa. The assessee was looking after the property of Mr. Vasant Manohar Wagle. This landed property was consi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ondent Nos. 1 and 2 supports the judgment and the order passed by the AO and that of the learned CIT, Panaji, Goa. According to the submissions of learned Government advocate, its a case having application of sub-s. (va) of s. 28 of the Act 1961. The petitioner had entered into an agreement with M/s Goa International School (P) Ltd. By that agreement, assessee has agreed to stop fishing activity which is the business activity of the petitioner and for the said purpose has received Rs. 25 lakhs as sum within the meaning of s. (va) of s. 28 of the Act 1961. According to him, the order passed by the learned CIT cannot be said to be prejudicial to the interest of the petitioner. For this proposition, he invites our attention to the s. 264 of the Act 1961. He has also submitted that the remedy of appeal which was available to the assessee, was not resorted to and the revision application is filed by the assessee under s. 264 of the Act 1961. According to him, this petition is under Arts. 226 and 227 of Constitution. He therefore submits and seeks dismissal of the writ petition. 6. In this petition, there are three questions arose for our consideration : "1. Whether on the facts and c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rized document. To appreciate the contents of the document, one has to read the document as a whole. In other words, reading of the document in part is not permissible. There is no dispute regarding the execution of the document and passing of the consideration under the document of Rs. 25 lakhs by the company to the assessee. Agreement, with terms, is accepted by the assessee. The contention of the assessee as we have noticed earlier is in relation to and/or application of s. 28(va) of the Act 1961. Sec. 28 bears title as profits and gains of business or profession. It has been provided under s. 28(va)(a) that income shall be chargeable to income-tax under the head Profits and gains of business or profession, of any sum, whether received or receivable, in cash or kind, under an agreement for not carrying out any activity in relation to any business. This s. 28(va)(a), has about five ingredients; namely, (a) definite sum of money, (b) received or receivable by the person, (c) either in cash or in kind, (d) under an agreement, and (e) for not carrying out any activity in relation to any business. 8. In the case at hand, agreement has been entered into by the assessee and M/s Goa I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in question. Considering the contents of the agreement Annex. A in our view, it cannot be said that receipt of Rs. 25 lakhs under the agreement dt. 18th Aug., 2004 by the assessee is profits and gains arising from the transfer of capital asset. In our view, therefore, it is not possible for us to accede to the submission of learned counsel for the petitioner. 9. Learned counsel Ms. D.V. Manerkar holding for the senior advocate for the petitioner, invited our attention to the judgment of the Hon'ble Supreme Court in the matter of CIT vs. Prabhu Dayal 1972 CTR (SC) 112: (1971) 82 ITR 804(SC). It was a Civil Appeal No. 1693 of 1968 decided by the Hon'ble Supreme Court on 6th Oct., 1971. Reference under s. 66(1) of the Indian IT Act, 1922, was decided by the High Court of Punjab & Haryana. The certificate in appeal was granted and therefore, the appeal was before Hon'ble Supreme Court. The question which was referred to the High Court for its opinion was 'Whether, on the facts and in the circumstances of the case, the receipt of Rs. 70,000 by the assessee on 11th June, 1954 was revenue or capital in nature ?' The High Court held that the said receipt was a capital ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a conclusion that the compromise decree destroyed the asset and in its place the assessee was given Rs. 70,000 as compensation. It was further held by the Hon'ble Supreme Court that this payment was neither in respect of the services rendered by him in the past or towards the accumulated commission due to him. Ultimately, finding recorded by the Hon'ble Supreme Court was that the receipt must be considered as a capital receipt and with this, appeal filed by the CIT was dismissed with costs. We have referred to and considered the facts listed by the Hon'ble Supreme Court in this judgment. Considering the facts which are brought on record, in the case on hand, we are of the opinion that the facts are simply uncomparable. The ratio of this judgment in our opinion does not help the petitioner. Other judgment pointed out by the counsel for the petitioner is in the matter of CIT vs. Bombay Burmah Trading Corporation Ltd. (1986) 58 CTR (SC) 144: (1986) 161 ITR 386(SC); it is apparent from this judgment that it is factually a case of forest leases i.e. about 15 forest leases in favour of the assessee-company were for a duration of 15 years and covering large areas of the forest....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appealed against by the petitioner. It is apposite to refer to the s. 246 of the Act 1961. Sec. 246 provides appeal against 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. While considering the nature of appeal provided under s. 246 of the Act 1961, the Hon'ble Supreme Court (sic-Bombay High Court) in the matter of Caltex Oil Refining (India) Ltd. vs. CIT (1993) 113 CTR (Bom) 358: (1993) 202 ITR 375(Bom), held that the power of the ITO is to make assessment under ss. 143 or 144 of the Act. It is that assessment which is the subject-matter of the appeal under s. 246 of the Act 1961. 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. Substant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se calls for when he is satisfied that it is an appropriate case for interference in exercise of revisional powers. Whenever a power is conferred on an authority to revise an order, the authority is entitled to examine the correctness, legality and propriety of the order and to pass such suitable orders as the authority may think fit. There is no reason why the authority should not be entitled to hold an inquiry or direct an inquiry to be held, and, for that purpose, admit additional material; (ii) The revising authority should not trench upon the powers which are expressly reserved by the Act or by the Rules to other authorities and should not ignore the limitations inherent in the exercise of those powers. The jurisdiction to grant an extension of time and condone the delay in rectifying the defect is expressly conferred on the AO by s. 139(9). Such a prayer must obviously and of necessity be made to the AO. If the AO does not exercise his power favourably to the assessee, the CIT may in exercise of revisional jurisdiction examine the legality or propriety of the order of the AO. However, in the absence of such a prayer having been made to the AO, the prayer cannot for the fir....