Commissioner Of Income Tax -I, Chennai v. M/S.dsm Soft Pvt. Ltd., Chennai-20

In the High Court of Judicature at MadrasDated : 19.8.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAMandThe Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.1265 of 2010 Commissioner of Income Tax-I, Chennai ...Appellant/RespondentVs M/s.DSM Soft Pvt. Ltd., Chennai-20....Respondent/Appellant APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 11.6.2010 made in ITA.No.11/Mds/2010 on the fileof the Income Tax Appellate Tribunal, Chennai 'A' Bench for theassessment year 2004-05, as against the orders dt.08/12/09 ofthe Commissioner of Income Tax in ITA.416/07-08 & TA.47/07-08and as against the order dt.27/12/07 of the Income Tax Officer,Chennai for the assessment year 05-06 and as against the orderdt.24/12/07 of the Income Tax Officer Chennai, for theassessment year 2004-05 in GI NO./PAN.No. . For Appellant:Mrs.R.Hemalatha, SSCFor Respondent:Mr.R.Sivaraman Judgment was delivered by T.S.Sivagnanam,J We have heard Mrs.R.Hemalatha, learned Senior StandingCounsel appearing for the appellant – Revenue andMr.R.Sivaraman, learned counsel appearing for the respondent –assessee. 2. This appeal, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961 is directed against the order dated11.6.2010 made in ITA.No. 11/Mds/2010 on the file of the IncomeTax Appellate Tribunal, Chennai 'A' Bench for the assessmentyear 2004-05. Page numbers https://hcservices.ecourts.gov.in/hcservices/ 3. The appeal was admitted on 07.2.2011 on the followingsubstantial questions of law : “i. Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in deleting thedisallowance of interest on borrowed capitaldiverted for giving interest free loans tothe group concerns of the assessee viz.M/s.Margon Industries Ltd., and M/s.DSMInfosystems P. Ltd., and for investment inthe equity shares of the assessee'ssubsidiary company M/s.DSM Deodata Ltd.,applying the decision of the Supreme Courtin 288 ITR 1 without considering thedifference in the facts involved in theassessee's case ? ii. Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe belated remittance of employees'contributions to Provident Fund andEmployees' State Insurance could not bedisallowed disregarding the provision underSection 36(1)(va) and Section 2(xiv) andwithout appreciating that the decision ofthe Supreme Court in 213 CTR 268 was notapplicable to employees' contribution to PFand ESI ? iii. Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in deleting thedisallowance of the claim of bad debts eventhough the assessee had claimed only aprovision for bad debts without appreciatingthat the Commissioner of Income Tax(Appeals) had allowed the claim afteradmittingandconsideringadditionalevidence in violation of Rule 46A andwithout giving an opportunity to theAssessing Officer to examine such additionalevidence ? iv. Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in giving the Page numbers direction mentioned in the precedingquestion without appreciating that theCommissioner of Income Tax (Appeals) hadallowed the claim after admitting andconsidering additional evidence under Rule46A and without giving an opportunity to theAssessing Officer to examine the same ? Andv. Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe export proceeds transferred to itswholly owned foreign subsidiary could betreated as having been remitted to India inforeign exchange within the stipulated timeeven considering Explanation 2 to Section10A(3)?” Page numbers direction mentioned in the precedingquestion without appreciating that theCommissioner of Income Tax (Appeals) hadallowed the claim after admitting andconsidering additional evidence under Rule46A and without giving an opportunity to theAssessing Officer to examine the same ? Andv. Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe export proceeds transferred to itswholly owned foreign subsidiary could betreated as having been remitted to India inforeign exchange within the stipulated timeeven considering Explanation 2 to Section10A(3)?” 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 framed 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(CCC) RS //True Copy// Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai 'A' Bench. Chennai 'A' Bench. 2.The Income Tax Officer(OSD), Company Circle 1(4), Chennai. Company Circle 1(4), Chennai. Page numbers https://hcservices.ecourts.gov.in/hcservices/ 3.The Commissioner of Income Tax, Appeals III, Chennai-34. Appeals III, Chennai-34. TCA.No.1265 of 2010 SVI(CO)CB(12/02/2021) Page numbers