Commissioner Of Income Tax-3, Coimbatore-18 v. M/S.noyyal Common Effluent Treatment Company Ltd., Tirupur

In the High Court of Judicature at MadrasDated : 06.7.2020 The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Commissioner of Income Tax-3, Coimbatore-18...Appellant/AppellantVs M/s.Noyyal Common EffluentTreatment Company Ltd.,Tirupur-641601. ...Respondent/ Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 26.10.2016 made in ITA.No.2068/Mds/2016 on thefile of the Income Tax Appellate Tribunal, Chennai 'C' Bench forthe assessment year 2007-08, and against the order dated30/03/2016 made in I.T.A.No.131/15-16 on the file of the IncomeTax Appeals(3)- Coimbatore for the assessment year 2007-2008,and against the order dated 30.03.2015 made in PAN/GIRNo. on the file of the Income Tax Officer ward 1(2),Tirupur, for the Assessment year 2007-2008. For Appellant: Mr.T.R.Senthilkumar, SSC assisted by Ms.K.G.Usharani, SC For Respondent: Mr.R.Sivaraman We have heard Mr.T.R.Senthilkumar, learned Senior StandingCounsel, assisted by Ms. K.G.Usharani, learned Standing Counselappearing for the appellant – Revenue and Mr.R.Sivaraman,learned counsel appearing for the respondent. 2. This appeal, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961 (for short, the Act) is directed https://hcservices.ecourts.gov.in/hcservices/ against the order dated 26.10.2016 made in ITA.No.2068/Mds/2016on the file of the Income Tax Appellate Tribunal, Chennai 'C'Bench (for brevity, the Tribunal) for the assessment year 2007-08. 3. The Revenue filed this appeal by raising the followingsubstantial questions of law : “i. Whether, on the facts and in thecircumstances of the case, the AppellateTribunal is right in law in deleting thedisallowance of Rs.1,72,24,412/- being theinterest received by the assessee fromdeposits made and assesable as income underthe head 'income from other sources' ? And ii. Whether, on the facts and in thecircumstances of the case, the Tribunal isjustified in allowing the interest paid onloans, which is a pre-operational expense,as deduction against the interest earnedfromdeposits,whichisseparatelyassessable under the head 'income from othersources ? Andiii. Whether the Tribunal is right instating that no evidence was brought onrecord by the Revenue to prove that thedeposits are placed with UTI from thesurplus funds, with an intention to earn theinterest income, when the assessee companyhad not commenced operation and as such,there was no computation of business incomeor loss incurred by the assessee company inthe relevant accounting year? Andiv. Whether, on the facts and in thecircumstances of the case, the Tribunal isright in law in not distinguishing that theobject of the assessee company was to starteffluent treatment plant and not to earninterest income? ” 4. The learned Senior Standing Counsel for the appellantsubmits that the above appeal is not pursued by the Revenue onaccount of the low tax effect in terms of Circular No.17/2019dated 08.8.2019 issued by the Central Board of Direct Taxes. Bythe said Circular, the monetary limit for filing or pursuing anappeal before the High Court has been increased to Rs.1 Crore.It is further submitted that the tax effect in this case is lessthan the threshold limit. 5. In the light of the said submissions, the above tax caseappeal is dismissed on account of the low tax effect. Thesubstantial questions of law raised are left open. In the eventthe tax effect is above the threshold limit fixed in the saidcircular, liberty is granted to the Revenue to make a mention tothis Court to restore the appeal to be heard and decided onmerits. No costs. Sd/- Assistant Registrar //True Copy// Sub Assistant RegistrarRSTo1.The Income Tax Appellate Tribunal, Chennai 'C' Bench.2.The Commissioner of Income Tax (Appeals)-3,Coimbatore.3.The income Tax Officer Ward 1(2), Tirupur.TCA.No.244 of 2017NR(CO)RMP(01/09/2020)