=1= IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITIN NO. 321 OF 2009 Mr. John D'Souza, aged about 60 yrs. Son of Mr. Domingo D'Souza, Hno. 5/1, Jesus Nazareth, Condo, Siridao, Ilhas, Goa. ... Appellants. Verses 1. The Commissioner of Income-tax, Income-tax Department, No. 5, Patto, Aayakar Bhavan, Panaji  403 001. 2. The Income-tax Officer, Ward-1 (1), Panaji. ... Respondents. Ms. D. V. Manerkar, Advocate holding for arguing Counsel Mr. S. Parthasarathi, Advocate with Mr. P. Dinesh, Advocate and Mr. Santosh H. Bharne, Advocate for the appellants. Mr. S. R. Rivonkar, Government Advocate for the respondents. Coram : S. B. Deshmukh & U. D. Salvi, JJ. Date : 13 th August, 2009 ORAL JUDGMENT 1. Rule returnable forthwith. Taken up for final hearing. Mr. S. R. Rivonkar, Government =2= Advocate waives service. 2. The petitioner, in this Writ Petition, has challenged the order passed by the learned Commissioner of Income-tax, Panaji, State of Goa in a Revision Application bearing no. F.No. CIT-P/264 (22)/07-08/1323 dated 26.2.2009. 3. The petitioner (hereinafter referred to as Assessee ) filed return of income for the Assessment Year 2005-2006 of his income on 22.12.2005. The Assessee declared his income of Rs. 1,33,920/-. The statement of accounts, forming part of his return of income disclosed the receipt of compensation of Rs. 25 lakhs received by him during the financial year 2004-2005. The assessee claimed it to be exempted from the taxation. The Income-tax Officer, Ward  1(1), Panaji, State of Goa on 10.12.2007 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 Section 271(1) (c) of Income-tax Act 1961. This order was passed by the Income-tax Office, Ward  1(1), Panaji (hereinafter referred as Assessing Officer ). The order passed by Assessing Officer =3= was challenged by the Assessee by filing Revision Application under Section 271 of the Income-tax Act, 1961 (hereinafter referred to as the Act, 1961 ) before the learned Commissioner of Income-tax, Panaji, Goa. This Revision Application after hearing the parties, is dismissed by the learned Commissioner of Income-tax by his order passed on 26.2.2009. 4. Return of income filed by the Assessee declaring total income of Rs. 1,33,920 was processed under Section 143 (1) by the Assessing Officer. Notice under Section 142 (1) of the Act 1961 was issued to the Assessee. In response to the notice, Assessee's authorised representative appeared before the Assessing Officer 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 consisting of three ponds. A statement is made on behalf of Assessee that he was neither a tenant nor a mundkar in the property. The Assessee claimed =4= that there was an agreement entered into between the Assessee and M/s Goa International School Pvt. Ltd. on 18.8.2004. By this agreement dated 18.8.2004, M/s Goa International School Pvt. Ltd. was to pay Rs. 25 Lakhs to the Assessee. According to the contention raised by the Assessee, this amount of Rs. 25 Lakhs was paid to him by M/s Goa International School Pvt. Ltd. to stop fish farming in the ponds located in the property. According to the Assessee, this amount was paid to him since Assessee would be deprived of his business and resultant income. The Assessing Officer by passing the order held that sub-Section (va) of Section 28 of the Act 1961 applies. This is because, according to the Assessing Officer, the Assessee had entered into an agreement not carrying out any activity in relation to any business. The Assessing Officer reached to a conclusion that Rs. 25 Lakhs received by the Assessee constitutes income and is chargeable to tax. 5. Learned Counsel for the petitioner fairly concedes that the order passed by the Assessing Officer under sub-Section (3) of Section 143 was not challenged by filing appeal, by the Assessee. He =5= does not dispute the date of passing of the order by the Assessing Officer under sub-Section (3) of Section 143. He also does not dispute the date of filing of the Revision Application before the learned Commissioner of Income-tax. The learned Counsel for the petitioner however submitted that the sum of Rs. 25 Lakhs received by the Assessee cannot be considered to be compensation on account of stopping of fish farming by the Assessee in the property in question. He submitted that sub-Section (va) of Section 28, has no application to the case on hand. It is his alternate submission that the sum received by the Assessee of Rs. 25 Lakhs can be considered to be the capital gain. He further submitted that the order passed by the learned Commissioner of Income-tax, under revisional jurisdiction is non-speaking order. He therefore seeks annulment of the order passed by the Commissioner of Income-tax and that of the order passed by the Assessing Officer under the said Act 1961. The learned Counsel for the petitioner relies on some judicial pronouncements to which we shall make reference at appropriate stage. The Counsel appearing for the petitioner has referred to the reply to the affidavit filed on behalf of respondent =6= no. 2. Mr. S. R. Rivonkar, Government Advocate on behalf of respondents no. 1 and 2 support the judgment and the order passed by the Assessing Officer and that of the learned Commissioner of Income-tax, Panaji, Goa. According to the submissions of learned Government Advocate, its a case having application of sub-Section (va) of Section 28 of the Act 1961. The petitioner had entered into an agreement with M/s Goa International School Pvt. 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 Section (va) of Section 28, of the Act 1961. According to him, the order passed by the learned Commissioner of Income-tax cannot be said to be prejudicial to the interest of the petitioner. For this proposition, he invites our attention to the Section 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 Section 264 of the Act 1961. According to him, this petition is under Articles 226 and 227 of =7= 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 circumstances of the case Section 28 (va) of Act 1961 applies? 2. Whether the order passed by the learned Commissioner of Income- tax, under revisional jurisdiction is legal and proper? 3. Whether the case for judicial review under Articles 226 and 227 of the Constitution is established? 7. An Assessee is defined under Section 2(7) of Act 1961, meaning thereby a person by whom any tax or any other sum of money is payable under this Act and includes every person in respect of whom any proceeding under this Act has been taken for the assessment of his income. An Assessing Officer is also defined under Section 2(7A) of Act 1961. In the case at hand, petitioner is an Assessee and respondent no. 2 is an Assessing Officer. The elementary question is nature and meaning of an =8= agreement, which is part of the compilation of this Writ Petition. This agreement is dated 18.8.2004 (page 14, Annexure A ). This agreement details the description of the parties i.e. Assessee along with one more person i.e. Smt. Emilia D'Souza, consisting of first party of one part and M/s Goa International School Pvt. Ltd.- Company of the other part represented by its Director one Mr. Parag Ishwarlal Mody. The description of the landed property is given in this agreement dated 18.8.2004. In para 6 of the agreement it has been stated that the first party (Assessee) will be deprived of their business opportunities and the resultant income. It is further mentioned in this para 6 that the Company i.e. M/s Goa International School Pvt. Ltd. has agreed to pay sum of Rs. 25 Lakhs towards the compensation to the first party which includes the present Assessee. This agreement continues in or about nine paras. We have minutely considered all these nine items and the terms and conditions of the agreement apart from stipulation of payment of Rs. 25 Lakhs to the Assessee. Item no. 8 of the agreement provides a declaration by the Assessee that with effect from 31.8.2004 Assessee shall have no claim of any kind whatsoever in respect of the =9= said ponds located in survey no. 15/0 and the sluice gates nor the Assessee shall have any claim of any kind whatsoever against the Company and / or first five owners. Item no. 9 of this agreement duly signed by the Assessee further makes it clear that Assessee will withdraw all complaints / objections lodged before different authorities / forums, objecting to the development of the said property by the Company. This agreement is a notarized 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 Section 28 (va) of the Act 1961. Section 28, bears title as profits and gains of business or profession . It has been provided under Section 28 (va)(a) that income shall be chargeable to income-tax under the head profits and gains of business or profession , of any sum, =10= whether received or receivable, in cash or kind, under an agreement for not carrying out any activity in relation to any business. This Section 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 International School Pvt. Ltd. is on record. There is a passing of consideration and / or passing of a definite sum of Rs. 25 Lakhs from M/s Goa International School Pvt. Ltd. to the Assessee. This sum of Rs. 25 Lakhs has been received by the Assessee for not carrying out any activity in relation to fish farming. Thus, in other words, it can be said that by this agreement the assessee is paid Rs. 25 Lakhs by M/s Goa International School Pvt. Ltd. and this payment is for not carrying out any activity or for refraining from carrying out activity in relation to fish farming business which otherwise was being allowed to be carried out by the petitioner, by the erstwhile owner Mr. Vasant =11= Manohar Wagle. In our view, in the facts and circumstances of the case at hand, this Section 28 (va) (a) squarely applies. Assessing Officer, therefore, was justified in holding that the amount of Rs. 25 Lakhs was received by the Assessee, by way of compensation and / or a sum for not carrying out any activity in relation to business and was the income of the Assessee chargeable to income-tax under the head of profits and gains of business or profession . At this juncture, we shall also refer the contention raised by the petitioner i.e. alternate submission on behalf of the petitioner that sum of Rs. 25 Lakhs was received by the petitioner towards capital gains. Capital gains is provided under Section 45 of the Act 1961. It has been laid down under sub-Section (1) of Section 45 that the profits and gains arising from the transfer of a capital asset effected for the previous year shall, save as otherwise provided in various Sections of the Act 1961 enumerated there under sub- Section (1) be chargeable to income-tax under the head capital gains , and shall be deemed to be the income of the previous year for which the transfer took place. Thus, sub-Section (1) of Section 45 contemplates any profits or gains arising from the =12= transfer of capital assets effected in the previous year. In the case on hand, we are of the opinion that there is no profits or gains in favour of the Assessee arising from the transfer of capital asset. Assessee was not owner of any asset (s) in the first place and there is no transfer of such alleged capital asset during the previous year. All that has been agreed by the Assessee by the agreement of August 2004 is abstaining himself from carrying out any activity, relating to fish farming in the ponds located, in the land in question. Considering the contents of the agreement Annexure A in our view, it cannot be said that receipt of Rs. 25 Lakhs under the agreement dated 18.8.2004 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 082 I.T.R. 0804 (SC) : (1972) 1972 CTR (SC) 0112, in the matter of Commissioner of Income-tax, Punjab, haryana, Jammu & Kashmir and Himachal =13= Pradesh. It was an Civil Appeal no. 1693 of 1968 decided by the Hon'ble Supreme Court on 6.10.1971. Reference under Section 66 (1), of the Indian Income-tax Act 1922, was decided by the High Court of Punjab and 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 June 11, 1954 was revenue or capital in nature?' The High Court held that the said receipt was a capital receipt. Aggrieved by the order of the High Court, the Commissioner of Income-Tax was in appeal before the Hon'ble Supreme Court. Brief facts noticed by the Supreme Court in that matter, were that, the Assessee was assessed as an individual. The relevant assessment year was 1955-56, the accounting period for the same was ended on Asad Sudi 1, S. Y. 2011. the Assessee was instrumental in discovering the existence of kankar deposits in Jind State. There was an agreement between one Shanti Prasad Jain and the erstwhile State of Jind, now a part of Punjab State for the acquisition of sole and exclusive monopoly rights of =14= manufacturing cement in the said Jind State. It was entered into on April 2, 1938 and the same was to remain operative for a period of 25 years, which term was liable to be extended to 100 years and the option of the said Shanti Prasad Jain or his nominee. Shanti Prasad Jain transferred his rights under that agreement to a public limited Company by name M/s Dalmia Dadri Cement Ltd. on May 4, 1938. The Assessee was one of the promoters of the said Company. The Dalmia Dadri Cement Company agreed to pay him a commission of 1% on the yearly net profits earned by the Company from the said cement factory. That agreement was to subsist so long as the original agreement dated April 2, 1938 subsisted. The Dalmia Dadri Cement Company acted upon the agreement made on May 27, 1938 up till 1950 and, thereafter, did not pay commission agreed to be paid. The Assessee was constrained to file the suit against the Company and it was ended in a compromise which was made a decree of Court. Under that decree, the Assessee was to be paid Rs. 15,000/- as commission for the years 1951 and 1952 and Rs. 15,000/- as commission for the year 1953. Further, the Assessee was to be paid Rs. 70,000/- by way of compensation for the termination of the agreement =15= between him and the Company on 1.1.1954. that compensation was received by the Assessee on 11.6.1954. The Assessee claimed that the sum of Rs. 70,000/- was capital receipt, not taxable in his hands was rejected by the Income-tax Officer holding that the sum of Rs. 70,000/- was a renumeration paid once and for all for the services rendered by the Assessee and as such, taxable in his hands. The Hon'ble Supreme Court considering the facts and circumstances brought before it, provision of the Income-tax Act prevailing at that time, reached to 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 Commissioner of Income-tax 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 =16= 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 Commissioner of Income-tax, Bombay City Vs. Bombay Burmah Trading Corporation reported in (1986) 161 ITR 0386 (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. Under these leases, the assessee-Company was authorised to fell the teak trees and convert them into logs and upon completion of the extraction thereof, to remove the logs after payment of royalty to the Government of Burma for its own purpose. The Hon'ble Supreme Court referred to Clause 27 of the forest leases. The question in that case was as to whether the receipt of Rs. 65,52,153/- for the year ending May 31, 1950, and Rs. 5,18,896/- for the year May 31, 1951 exempt from tax as per the receipt of a capital nature as contended by the Assessee-Company. The Hon'ble Supreme Court in that case considered the main issue that whether the acquisition of forest leases by the Assessee-Company was a capital =17= asset or stock-in-trade. While answering the question no. 1 in that case held that agreement dated June 10, 1949, would be applicable. This sum therefore cannot be taxed. With this, appeals were dismissed with costs. The facts obtained in that case, are all together different, to that of the facts in the case at hand striking difference is in respect of lease in that case in favour of the Assessee. Ratio of this judgment also does not help the present petitioner. 10. Judgment of the Hon'ble Supreme Court in the matter of Oberoi Hotel (P) Ltd. Vs. Commissioner of Income-tax (1999) 236 ITR 0903 (SC), is also pointed out to us. Facts have been listed by Hon'ble Supreme court in para 2 of this judgment. Here also we have noticed the distinguishable facts of the case. In our opinion, this judgment of Hon'ble Supreme Court also has no application to the present case on hand. 11. The Counsel of the petitioner also referred to the judgment of the High court in the matter of CIT Vs. M. Appukutty (2002) 253 ITR 0159 (Ker) that in the case of transfer of possession of shop no. =18= 9/866 is exempted from the computation of capital gains arising during the year was under consideration. By agreement dated July 3, 1986, the possessory right of Shop no. 9/866 was transferred by the firm in favour of one Mohammed Berami and others for a consideration of Rs. 1,00,000/-. Sale deed was executed for transfer of possessory right. In our case, there is no question of transfer of possessory rights or any agreement for the purpose allegedly amongst the Assessee and M/s Goa International School Pvt. Ltd. 12. Admittedly, order passed by the Assessing Officer was not appealed against by the petitioner. It is apposite to refer to the Section 246 of the Act 1961. Section 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 statue providing for an appeal. While considering the nature of appeal provided under Section 246 of the Act 1961, the Hon'ble Supreme Court in the matter of Caltex Oil Refining (India) Ltd. Vs. Commissioner of Income-tax reported in 1993 Vol. 202 page 375, held, that the power of the Income Tax Officer is to make =19= assessment under Sections 143 or 144 of the Act. It is that assessment which is the subject matter of the appeal under Section 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 Income-Tax Officer or make fresh assessment (Section 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 Section 143 and 144. It is in this way appeal is of continuation of the exercise of assessing the income of the Assessee. Substantive statutory right of appeal, by way of Section 246 thus is made available to the aggrieved person / Assessee. Suffice it to say that such substantive right was not resorted to, in the case on hand, by the petitioner / Assessee. 13. The Assessee however had challenged the order passed by the Assessing Officer, by filing the revision before the learned Commissioner of Income- tax. Revisional power of the Commissioner, may be traced to Section 264 of the Act 1961. Legality, propriety and correctness of the order, may be =20= challenged, before the Revisional Authority under Section 264 of the Act 1961. The power vested with the authority concerned i.e. the commissioner is subject to some restrictions which are enumerated under sub-Sections (1), (2), (3) and (4) of Section 264 of the Act. Revisional power can be exercised by the Commissioner either of his own motion or on an application by the Assessee. He may call for the record of any proceeding under this Act in which any such order has been passed and may make such inquiry or cause such inquiry to be made and, subject to the provisions of this Act, may pass such order thereof, not being an order prejudicial to the Assessee, as he thinks fit. It is apparent from Section 264 that there is a wide power with the commissioner under revisional jurisdiction. He may call for records of proceeding under this Act, may make such inquiry or cause such inquiry to be made and pass such order thereon however, not being an order prejudicial to the Assessee. Even though, power vested with the learned Commissioner seems to be wide under Section 264, it cannot be said to be too wide to that