Madras HC stays I-T move against P Chidambaram

The Madras high court on Wednesday stayed the Income Tax proceedings against former Union minister P Chidambaram in connection with a tax exemption claim made by him to the tune of Rs 43 lakh as agricultural income from a coffee estate owned by his family in Karnataka.

Granting the interim stay on a plea filed by Chidambaram seeking to quash the March 27 and May 23 notices issued to him by the I-T department, Justice TS Sivagnanam said, "In my considered view, the factual issue is identical to that of the issue pertaining to the earlier assessment year which was put to challenge."

"This court is convinced that the reopening was not justified and ultimately allowed the earlier petition. In the light of the above, there will be an order of interim stay," he said and posted the case to July six to enable the I-T department to file its counter.

The issue pertained to the Rs 43 lakh tax exemption claimed by Chidambaram as agricultural income. Disputing his claim that the proceeds were agricultural income, the I-T department issued notices to reopen the assessment filed by Chidambaram for the financial year 2011-12.

Challenging this, Chidambaram, in his plea, submitted that he owns a coffee estate in Karnataka from where he extracts raw coffee and sells them to curing houses. Contending that the I-T department had been accepting the returns filed by him all these years, he said, as usual, he had made a similar claim for the assessment year 2011-12 for income to the tune of Rs 43.37 lakhs, Chidambaram said.

After recording the submissions, Justice Sivagnanam adjourned the matter to July six.