Commissioner Of Income Tax I, Chennai v. M/S.indian Additives Ltd., Express Highway, Manali, Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 11.09.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY Tax Case (Appeal) No.690 of 2011 Commissioner of Income Tax I,Chennai ...Appellant/Respondentvs M/s.Indian Additives ltd.,Express Highway, Manali,Chennai 600068 ... Respondent/Appellant Prayer:Tax Case Appeal filed against the order of the Income TaxAppellate Tribunal Madras "A" Bench dated 17.06.2011 in ITANo.703/MDS/2009 and against the order of the Commissioner ofIncome Tax (Appeals)-XI Chennai-34 made in I.T.ANo.54/07-08,Tr.No.883/06-07 dated 27.03.2009 for the assessment year 2004-2005 and against the order of the Assistant Commissioner ofIncome tax Company Circle 11(3), Chennai-34 made inG.I.No./P.A.No.2002-1/AAAC11445C, dated 27.12.2006 for theassessment year 2004-2005. JUDGMENT (Delivered by DR.VINEET KOTHARI, J.) This Tax Case Appeal has been filed by the Revenue, callingin question the correctness of the order passed by the IncomeTax Appellate Tribunal, "A" Bench dated 11.06.2011 in ITANo.703/MDS/2009, by raising the following substantial questionsof law: https://hcservices.ecourts.gov.in/hcservices/ "Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatonly the lumpsum payment made towardsacquisition of technical knowhow fromM/s.Chevron Oroite Company LLC, USA could betreated as capital expenditure and therunning royalty paid every year on the basisof volume of sales ought to be allowed asRevenue Expenditure, even though both thetypes of payments were towards acquisitionof technical knowhow and the right toexclusive use within India as per theagreement ?” 2. When the matter is taken up for hearing, learnedStanding Counsel brought to our notice the Circular issued bythe Central Board of Direct Taxes vide Circular No.17/2019 dated8 August 2019, wherein, it is stipulated that appeals shall notbe filed/pursued by the Department before the High Court incases where the tax effect does not exceed Rs.1,00,00,000/-(Rupees One Crore). 3. In the instant case, the tax effect is said to be lessthan the monetary limit imposed and therefore, the Appeal filedby the Revenue is dismissed as withdrawn, keeping open thesubstantial questions of law for determination in appropriatecases. No costs. Assistant Registrar /true copy/Sub Asst. Registrar tarTo1.The Income Tax Appellate Tribunal'A Bench Chennai 2.The Commissioner of Income tax(Appeals)XI121 Mahatma Gandhi Road Chennai-34 3.The Assistant Commissioner of Income Tax,Company Circle 11(3)121 N.H.Road Chennai-34 +1 cc to Mr.N.Muthukumar Advocate sr29844 Tax Case (Appeal) No.690 of 2011 mr(co)aa19/10/2020