M/S.carburettors Ltd., 476, Temple Towers, Anna Salai, Chennai-600 035 v. The Asst. Commissioner Of Income Tax, Company Circle-I(3), Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 26.04.2016 CORAM: THE HONOURABLE MR.JUSTICE NOOTY.RAMAMOHANA RAOANDTHE HONOURABLE MR.JUSTICE M.V.MURALIDARANTax Case (Appeal) Nos.387 and 859 of 2007 M/s.Carburettors Ltd.,177, Anna Salai,Chennai-600 002. M/s.Carburettors Ltd.,476, Temple Towers,Anna Salai, Chennai-600 035... Appellant in T.C.(A).No.859 of 2007Vs. The Asst. Commissioner of Income Tax,Company Circle-I(3),Chennai... Respondent in T.C.(A).No.387 of 2007 The Asst. Commissioner of Income Tax,Company Circle-1(1),Chennai... Respondent in T.C.(A).No.859 of 2007 Tax Case (Appeal) No.387 of 2007 filed under Section 260-Aof the Income Tax Act against the order dated 22.09.2006 made inI.T.A.No.1846/Mds/2002 on the file of the Income Tax AppellateTribunal, 'A' Bench, Chennai for the assessment year 92-93. T.C.Appeal NO.859/07:Against the order of Income Tax Appellenttribunal, Madras Bench 'D'Madras made in ITA.NO.531/MDS/96 dated1/10/1999 for the assessment year 1992-93, against the order ofCommissioner of Income Tax,121, Mahatma Gandhi Road, Madras-34,Made in C.No.218-I(3)/95-96 dated 16/1/96 for the Assessmentyear 1992-93 against the order of Assistant commissioner ofIncome Tax, Income Tax Department made in PAN/GIR No.3C-147-504-CN 7332 dated 9/3/95 for the Assessment year 1992-93 inTCA.NO.859/07. TC.Appeal.No.387/07:Against the order of Commissioner of Income Tax(Appeals) https://hcservices.ecourts.gov.in/hcservices/ III,121,MahatmaGandhiRoad,Chennai-34.madeinITA.No.Tr.264/2001-02/AIII dated 20/9/02 for the Assessment year92-93, against the order of Assistant Commissioner of IncomeTax,Income Tax Department,Chennai, Made in PAN/GIR.No.3-C/47-004-CN-7332 dated 9/3/95 for the assessment year 1992-93 inTCA.387/07. Tax Case (Appeal) No.859 of 2007 filed under Section 260-Aof the Income Tax Act against the order dated 22.09.2006 made inI.T.A.No.531/Mds/1996 on the file of the Income Tax AppellateTribunal, 'A' Bench, Chennai for the assessment year 1992-93. For appellant in both the appeals : Mr.S.Sridhar For respondent in both the appeals: Ms.Hema Muralikrishnan, Standing Counsel for Income Tax JUDGMENT (The Judgment of the Court was delivered by Nooty.RamamohanaRao,J) T.C.(A).No.387 of 2007:This appeal is preferred by the assessee calling in questionthe order passed by the Income Tax Appellate Tribunal in theappeal preferred by it in I.T.A.No.1846/Mds/2002. 2. Heard Mr.Sridhar, learned counsel appearing for theappellant/assessee (company) and Ms.Hema Murali Krishnan,learned Standing Counsel appearing for the respondent-Income TaxDepartment (Revenue) for a considerable length of time. 3. Before we proceed any further, it is only apt to noticethat the Tribunal had concluded its exercise in the followingwords recorded in paragraph 20 of the judgment:"20. Since the assessee had not filed the Reportof the Chartered Engineer and the claim of assesseebefore Assessing Officer was that it was a sale ofbusiness as going concern without assigning item-wisevalue of the assets transferred, the AssessingOfficer had no occasion to examine the case on thebasis of transfer of undertaking assets valued byChartered Engineer. Accordingly, we set aside theissue to the file of Assessing Officer, who willexamine the chargeability of the sum received byassessee to capital gains/profit under section 41(2)of the Act on consideration of valuation report by https://hcservices.ecourts.gov.in/hcservices/ the Chartered Engineer and business valuation byS.B.Billimoria & Co. and also material available onrecords of the purchaser company, i.e. Ucal ComponentLtd. after affording the assessee a reasonableopportunity of being heard." https://hcservices.ecourts.gov.in/hcservices/ the Chartered Engineer and business valuation byS.B.Billimoria & Co. and also material available onrecords of the purchaser company, i.e. Ucal ComponentLtd. after affording the assessee a reasonableopportunity of being heard." 4. Learned counsel for the assessee contended that the aboveconclusion arrived at by the Tribunal is erroneous for more thanone good reason. Firstly, the Tribunal has erroneously admittedthe additional evidence let in by the Revenue. Secondly, it hasalso erred in construing that the report of the CharteredEngineer is secured by the assessee, and thirdly, it has alsoconstrued that the plea of the assessee that the sale ofbusiness as "slump sale" is to be re-examined once again. 5. The right of the Tribunal to admit additional evidence inaccordance with Rule 29 of the Income Tax Appellate TribunalRules, has fallen for consideration before a Division Bench ofthis Court in the case of Commissioner of Income Tax Vs.Ku.Pa.Krishnan, reported in 2012 (Vol.345) ITR 38 (Mad). TheDivision Bench of this Court has considered the matter and foundthat when Rule 18(4) is read with Rule 29 of the aforementionedRules, there would not be any difficulty in holding that interms of Rule 29, the additional evidence can also be producedbefore the Tribunal. In this view of the judgment rendered bythis Court earlier in the aforementioned case, the firstobjection of the learned counsel for the appellant may notdetain us any further. 6. Insofar as the fact as to whether it is the assessee whohas commissioned the Chartered Engineer and secured a report orthe purchaser of the sale indulged in by the assessee whocommissioned a Chartered Engineer, also may not be reallyrelevant. It is now for the assessing authority to apply hismind independently as to whether for upholding the claim of theassessee that it has indulged in "slump sale" or not, the sameis required to be examined and answered. For that very purpose,the Tribunal has remanded the matter for consideration afresh.As a matter of rule of prudence, whenever an appellate forumremands a case back for consideration afresh, the primaryauthority or the original authority has to proceed afresh in thematter by treating the same as a clean slate basis. Now, forachieving that objective, the appellate forum could be recordinga statement that "uninfluenced in any manner by the observationscontained in the remand order, the matter be decided afresh".Not that its absence would make any difference when every quasi-judicial or judicial authority is required to decide a questionafresh, he has to independently apply his mind to the facts andcircumstances of the case and the materials available on record.But however, to put the matters beyond any pale of doubt, we https://hcservices.ecourts.gov.in/hcservices/ proceed further and clearly make an observation by saying thatthe assessing authority shall now proceed further in the matterwithout in any manner being influenced by the observationscontained in the order of remand passed by the Tribunal. 7. Third and final aspect of the matter which we arerequired to deal with is as to whether there was any opportunityof leading evidence afresh to the assessee, denied by theimpugned order. We find that no such attempt was made by theTribunal and it has not been done either. Therefore, theassessing authority will provide a fair and reasonableopportunity to the assessee to produce any evidence, all themore so, to the contra, insofar as the additional evidence letin by the Department/Revenue and consider the same before takinga final decision in the matter. Accordingly, T.C.(A).No.387 of2007 stands disposed of. No costs. 7. Third and final aspect of the matter which we arerequired to deal with is as to whether there was any opportunityof leading evidence afresh to the assessee, denied by theimpugned order. We find that no such attempt was made by theTribunal and it has not been done either. Therefore, theassessing authority will provide a fair and reasonableopportunity to the assessee to produce any evidence, all themore so, to the contra, insofar as the additional evidence letin by the Department/Revenue and consider the same before takinga final decision in the matter. Accordingly, T.C.(A).No.387 of2007 stands disposed of. No costs. T.C.(A).No.859 of 2007:8. In view of the order passed by us in T.C.(A).No.387 of2007 today as above, the issue in T.C.(A).No.859 of 2007 ispurely academic and it does not require any answer from us. T.C.(A).No.859 of 2007 is accordingly disposed of. No costs. Sd/- Asst.Registrar (CO) /true copy/ Sub Asst. Registrar cs To1. The Assistant Registrar, Income Tax Appellate Tribunal, Rajaji Bhavan, III Floor, Besant Nagar, Chennai-600 090. (with records) (5 copies) 2. The Secretary, Central Board of Revenue, New Delhi. (3 copies) 3. The Commissioner of Income Tax, Tamil Nadu Circle, Chennai-600 034. Tamil Nadu Circle, Chennai-600 034. 4. The Commissioner of Income Tax (Appeals)-III, Tamil Nadu Circle, Chennai-600 034. Tamil Nadu Circle, Chennai-600 034. 5. The Asst. Commissioner of Income Tax, Company Circle-I(3), Chennai-600 034. Company Circle-I(3), Chennai-600 034. 6. The Asst. Commissioner of Income Tax, Company Circle-1(1), Chennai-600 034. Company Circle-1(1), Chennai-600 034. +1cc to Mr.T.Ravikumar, Advocate sr.25946 +2cc to Mr.S.Sridhar,Advocate sr.25925,25926 T.C.(A).Nos.387 and 859 of 2007 ad(co)ss(6/6/2017)