M/S.kewal Silk Mills v. The Chief Commissioner Of Income Tax-Ixand Ors

srk IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.646 OF 2012 M/s.Kewal Silk Mills ...Petitioner Versus The Chief Commissioner of Income Tax-IXand ors. ...Respondents Mr.Pankaj R. Toprani with Ms.Kadambari V. Surve for petitioner.Mr.Suresh Kumar for respondents. CORAM: DR.D.Y. CHANDRACHUD & M.S.SANKLECHA, JJ. March 14, 2012. P.C. 1.Rule, returnable forthwith. Counsel appearing for the respondents waives service. By consent the petition is taken up for final hearing. 2.The petition relates to Assessment Year 2009-2010. An order of assessment has been passed by the Assessing Officer on 30 November 2011 in pursuance of which a demand has been raised of Rs.82,72,386/- upon the petitioner. The bone of contention before the Assessing Officer relates to an amount of Rs.3.75 crores received by the Assessee for the surrender of certain rights which it had acquired under an agreement dated 13 June 1972. According to the assessee, the amount of Rs.3.75 crores represented a consideration realized on surrender of tenancy and was hence a capital gain. The Assessee claimed a deduction under Section 54EC. The Assessing Officer has, however, concluded that under the agreement of 1972 the Assessee was only a licensee in respect of the looms and machinery and had no right of tenancy. Consequently, the Assessing Officer held that the amount was liable to be chargeable to tax as income from other sources. 3.The Assessing Officer sought an approval of the Commissioner, Income Tax under Section 281B for attaching the bonds held by the Assessee with the National Highways Authority of India. The Commissioner granted an approval on 28 January 2011. In pursuance thereof the ACIT addressed a communication on 9 December 2011 to the National Highways Authority of India levying an attachment provisionally under Section 281B. At that stage, the Authority was directed not to disburse the proceeds to the office of the ACIT. Subsequently, the petitioner sought a stay of the demand upon which an order has been passed on 27 February 2012. ACIT has directed the petitioner to pay the entire outstanding demand on or before 5 March 2012 failing which, it has has been stated that the petitioner would be treated as an assessee in default. At this stage, the Court has been informed that upon the order passed by the ACIT on the application for stay, an amount of Rs.50 lacs has been realized by the Revenue together with interest from the National Highways Authority of India. Having regard to this position, we are of the view that the ends of justice would be met if the balance of the outstanding demand is stayed and a direction is issued to the Commissioner (Appeals) to dispose of the appeal expeditiously. We accordingly dispose of the petition by directing that in view of the aforesaid admitted position as stated before the Court, the balance of the outstanding demand for AY 2009-2010 shall remain stayed pending disposal of the appeal by the Commissioner (Appeals) and for a period of six weeks thereafter. We expedite the hearing of the appeal and wp-646-2012 direct the Commissioner (Appeals) to dispose of the appeal within a period of three months from the receipt of an authenticated copy of this order. Petition is accordingly disposed of. There shall be no order as to costs. (DR.D.Y. CHANDRACHUD,J.) (M.S.SANKLECHA, J.)