M/S.ta Taylor Private Limited,Chennai-20 v. The Assistant Commissioner Of Income Tax, Corporate Circle3(1), Chennai-34

In the High Court of Judicature at Madras Dated : 03.12.2018 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mr.Justice N.SATHISH KUMAR Tax Case Appeal No.876 of 2018 & CMP.No.21261 of 2018 M/s.TA Taylor Private Limited,Chennai-20 ...Appellant Vs The Assistant Commissioner of Income Tax, Corporate Circle3(1), Chennai-34...Respondent APPEAL under Section 260A of the Income Tax Act, 1961against the order dated 19.7.2018 in ITA No.622/Chny/2017 on thefile of the Income Tax Appellate Tribunal, Chennai 'B' Bench forthe assessment year 2012-13, against the order made inITA.No.111/CIT(A)-11/2016-17 dated 31/01/2017 on the file ofCommissioner of Income Tax(Appeals)-11, Chennai for theassessment year 2012-2013, against the order made inITA.No.199/CIT(A)-11/2015-16 dated 19/02/16 on the file of theCommissioner of Income Tax(Appeals)-10, Chennai, for theassessment year 2012-13 for PAN NO. . For Appellant : Mr.Raghavan RamabadranFor Respondent:Mr.M.Swaminathan, SSC Judgment was delivered by T.S.SIVAGNANAM,J This appeal by the assessee under Section 260A of the IncomeTax Act, 1961 (hereinafter called the Act) is directed againstthe order passed by the Income Tax Appellate Tribunal (forbrevity,theTribunal),Chennai'B'BenchinITA.No.622/Chny/2017 dated 19.7.2018 for the assessment year2012-13. 2. This appeal has been filed raising the followingsubstantial questions of law :“i. Whether, on facts and incircumstances of the case, the Tribunal wasright in holding that the consideration ofRs.2,28,87,500/- is to be taxed in https://hcservices.ecourts.gov.in/hcservices/ assessment year 2012-13 ignoring the factthat no portion of the aforesaidconsideration accrued in the assessmentyear? And ii. Whether, on facts and circumstancesof the case, the Tribunal was right in notconsidering the fact that the considerationof Rs.2,28,87,500/- was duly offered to taxin the subsequent assessment year?” 3. The assessee filed their return of income for theassessment year 2012-13 relevant to the financial year 2011-12on 28.9.2012 declaring an income Rs.16,62,30,620/-; taxliability including surcharge and cess at Rs.3,71,02,436/-;interest under Section 234B of the Act at Rs.4,10,736/-; andagain interest under Section 234C of the Act at Rs.1,63,982/-.During the financial year 2011-12, the assessee company enteredinto a slump sale agreement dated 06.4.2011 with one M/s.PreetiKitchen Appliances Private Limited to transfer its business on aslum sale basis. In terms of Clause 3.1 of the said agreement,the purchase price was agreed at Rs.18,31,00,000/- and out ofthe said sum of Rs.18,31,00,000/-, an amount of Rs.2,29,00,000/-was kept in escrow account, which was payable after certainperiod. 4. For the assessment year 2012-13, the assessee offeredonly an amount of Rs.16,02,12,500/- to tax. The balanceconsideration of Rs.2,28,87,500/- was offered to tax only in theassessment year 2013-14, for which, the return of income wasfiled on 02.9.2013. The assessment proceedings for theassessment year 2012-13 were concluded under Section 143(3) ofthe Act and an assessment order dated 26.2.2015 was passed. TheAssessing Officer held that irrespective of the date of receiptof the sale consideration, the same should be taxed in theassessment year 2012-13 and reworked the total income atRs.19,25,24,140/-; the tax payable together with surcharge andcess was arrived at Rs.4,30,07,388/-; and interest underSections 234B and 234C of the Act. 5. As against the said order, the assessee filed an appealbefore the Commissioner of Income Tax (Appeals) [for short, theCIT (A)]. However, the Appellate Authority, vide order dated31.1.2017, confirmed the order passed by the Assessing Officer.The assessee carried the matter on further appeal to theTribunal, which passed the impugned order rejecting the appealfiled by the assessee. 5. As against the said order, the assessee filed an appealbefore the Commissioner of Income Tax (Appeals) [for short, theCIT (A)]. However, the Appellate Authority, vide order dated31.1.2017, confirmed the order passed by the Assessing Officer.The assessee carried the matter on further appeal to theTribunal, which passed the impugned order rejecting the appealfiled by the assessee. 6. We have heard the learned counsel for the appellant andMr.M. Swaminathan, learned Senior Standing Counsel acceptingnotice for the respondent. 7. Admittedly, a part of the consideration received by theassessee was offered to tax for the assessment year 2013-14, theassessee filed their return of income and the tax had been paid.In our considered view, the issues raised in these appeals havebecome academic, since the question is as to in which year, theassessee is required to be taxed. The Revenue does not disputethat in the subsequent assessment year namely 2013-14, theassessee offered necessary consideration received and paid taxthereon. Therefore, the Revenue is not deprived of collection ofappropriate rate of tax. Hence, we may not be required toadjudicate the matter and decide the substantial questions oflaw raised, as the issues raised in this appeal have becomeacademic. 8. We are supported by the decision of the Hon'ble SupremeCourt in the case of CIT Vs. Excel Industries Limited [reportedin (2013) 358 ITR 2015] wherein under similar circumstances, theappeals filed by the Revenue were dismissed. The relevantportion of the said judgment reads as follows : “Thirdly, the real question concerningus is the year in which the assessee isrequired to pay tax. There is no disputethat in the subsequent accounting year, theassessee did make imports and did derivebenefits under the advance licence and theduty entitlement pass book and paid taxthereon. Therefore, it is not as if theRevenue has been deprived of any tax. We aretold that the rate of tax remained the samein the present assessment year as well as inthe subsequent assessment year. Therefore,the dispute raised by the Revenue isentirely academic or at best may have aminor tax effect. There was, therefore, noneed for the Revenue to continue with thislitigation when it was quite clear that notonly was it fruitless (on merits) but alsothat it may not have added anything much tothe public coffers.” 9. Accordingly, the tax case appeal filed by the assesseeis dismissed, as the issues raised have become academic. Thesubstantial questions of law raised are left open. Needless tostate that since we have dismissed the appeal, the question of once again demanding tax from the appellant does not arise, asthe issues have become academic and as the consideration hasbeen offered for tax for the assessment year 2013-14 and tax hasbeen paid subject to payment of interest in accordance with law.No costs. Consequently, the connected CMP is also dismissed. Sd/- Assistant Registrar(CS III) //True Copy// Sub Assistant RegistrarTo1.The Income Tax Appellate Tribunal, Madras 'B' Bench.2.The Commissioner of Income Tax(Appeals)-11, Chennai.3.The Assistant Commissioner of Income Tax Corporate Circle-3(1), Chennai-34.4.The Commissioner of Income-Tax, Appeals-11,Chennai-34.+1cc to Mr.Lakshmi kumaran, Advocate sr.no.82515TCA.No.876 of 2018 &CMP.No.21261 of 2018rsv(co)nr 03/01/2019