Commissioner Of Income Tax, Chennai v. M/S Pentasoft Technologies Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS CoramThe Hon'ble Mr.Justice T.S.SivagnanamandThe Hon'ble Mrs.Justice V.Bhavani Subbaroyan Commissioner of Income Tax,Chennai.AppellantVs. M/s Pentasoft Technologies Ltd.,25, 1 Main Road, United India Colony,Kodambakkam, Chennai – 24. ...Respondent This Tax Case Appeal is filed under Section 260 - A ofthe Income Tax Act, 1961 against the order of the IncomeTax Appellate Tribunal Madras “B” Bench Chennai, dated15.02.2008 passed in I.T.A.No. 216/Mds/2007 for theassessment year 1999-2000 and against the order of thecommissioner of Income Tax (Appeal) VI dated 10.10.2006 andmade ITA.NO.329/04-05 and against the order of the Deputycommissioner of Income Tax ,Central Circle III(4), ChennaiDated 28.03.2002 in P.A.NO./GI NO.34104 -p for theAssessment year 1999-2000. For Appellant : Mrs.R.Hemalatha This appeal filed by the Revenue, under Section 260-Aof Income Tax Act, 1961 (herein after “the Act” forbrevity) is directed against the order passed by the IncomeTax Appellate Tribunal 'B' Bench in ITA No. 216/Mds/2007,for the assessment year 1999 to 2000. 2.The appeal has been admitted, vide order dated25.08.2008, on the following Substantial Questions of Law: https://hcservices.ecourts.gov.in/hcservices/ “1. Whether in the facts and circumstances ofthe case, the Tribunal was right in holding thatthe commission paid towards the properties takenon lease is revenue expenditure? 2. Whether in the facts and circumstances ofthe case, the Tribunal was right in holding thatinterest earned on deposits held as margin moniesfor availing the LC facilities when the assesseehad sufficient cash reserves is eligible for onspecial deduction under Section 80HHE?” 3.When the case was heard by us on 18.09.2018, a memowas filed by the learned counsel for the respondent/assesseestating that the appeal filed by the Revenue cannot bepursued in view of the low tax effect as stipulated inCircular 3/2018, dated 11.07.2018. The memo filed by therespondent/assessee is to the following effect: “1. The two issues raised in the Appeal by theDepartment are:a. Allowing Rs. 3,89,600/- being the brokeragepaid as revenue expenditure; and b. Grant of further deduction under Section80HHE.2. It is submitted that by the order ofAssessment, the Assessing Officer had allowed80HHE of Rs. 2,69,81,026/-. Giving effect tothe impugned order, it is now enhanced to Rs.3,04,67,910/-. The difference is thus Rs.34,04,67,910/-.3. Thus the relief contested in the appeal isthus an aggregate sum of Rs. 38,76,484/-. Thetax effect thereon at the rate of 35% is onlyRs.13,56,769/-. 4. The Appeal of the Department is, therefore,not maintainable in view of the Circular No.3/2018 and hence it is prayed that the appealbe dismissed.” 4.On a perusal of the materials placed before us, wefind that the facts and figures, as mentioned by therespondent/assessee (in the memo extracted above), appearsto be a correct factual position. https://hcservices.ecourts.gov.in/hcservices/ 5.In the light of the above, the Revenue cannot pursuethis Appeal in view of the low tax effect. Hence, theAppeal is dismissed and the Substantial Questions of Law,framed for consideration, are left open. No costs. Sd/- Assistant Registrar(CS v) //True Copy// Sub Assistant Registrar msk/mrmTo1.Income Tax Appellate Tribunal Madras “B” Bench Chennai2.The commissioner of Income Tax (Appeal) VI ,Chennai 34.3.The Deputy commissioner of Income Tax,Central cirlcle III(4) , Chennai 34. +1cc to Mr.N.Muthukumar , Advocate SR.No. 70392+1cc to Mr.T.Ravi kumar , Advocate SR.No. 69967Tax Case No. 1327 of 2008ASK(12/11/2018)