Commissioner Of Income Tax I, Tiruchirapalli v. M/S.metro Fabrics, Karur

In the High Court of Judicature at MadrasDated : 19.8.2019 The Honourable Mr.Justice T.S.SIVAGNANAM The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Commissioner of Income Tax I, Tiruchirapalli...Appellant/RespondentVsM/s.Metro Fabrics, Karur....Respondent/ Appellant APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 19.5.2010 made in ITA.No.1705/Mds/2009 on thefile of the Income Tax Appellate Tribunal, Chennai 'D' Bench forthe assessment year 2004-05. Against the order dated 24/8/2009made in ITA No:138/07-08 on the file of the commissioner ofIncome Tax(Appeals) Tiruchirappalli for the assessment year2004-05, against the order dated 12/9/2007 made in PAN/GIRNo: on the file of the Deputy Commissioner of IncomeTax Circle-II,Tiruchirappalli for the assessment year 2004-05. Judgment was delivered by T.S.Sivagnanam,J We have heard Mr.M.Swaminathan, learned Senior StandingCounsel, assisted by Ms.V.Pushpa, learned Standing Counselappearing for the appellant – Revenue and Mr.Ponnaiyan, learnedcounsel 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 dated19.5.2010 made in ITA.No. 1705/Mds/2009 on the file of theIncome Tax Appellate Tribunal, Chennai 'D' Bench for theassessment year 2004-05. 3. The appeal was admitted on 21.12.2010 on the followingsubstantial questions of law :“i. Whether, on the facts and in the https://hcservices.ecourts.gov.in/hcservices/ circumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe assessee was entitled to deduction underSection 80HHC on DEPB even though theconditions prescribed under the Act forexporters having turnover above Rs.10 Croreshad not been satisfied in the assessee'scase ? ii. Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe face value of DEPB is chargeable to taxon accrual basis and that the profit on saleof DEPB representing the excess of saleproceeds of DEPB over its face value isliable to be considered under Section 28(iiid) at the time of its sale ? and iii. Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in not holdingthat the scheme of DEPB is not an automaticbenefit to an exporter in the form of cashassistance, but arises only on makingapplication to the concerned authoritypursuant to exports and is in the nature of'benefit of perquisite arising out ofbusiness' and therefore, is chargeable totax under Section 28(iv) ?” 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(Insp cell) //True Copy// Sub Assistant Registrar rs To 1.The Income Tax Appellate Tribunal, Chennai 'D' Bench. Chennai. Chennai. 2.The Commissioner of Income Tax(Appeals) Tiruchirappalli. Tiruchirappalli. 3.The Deputy Commissioner of Income Tax Circle II Tiruchirappalli. Tiruchirappalli. +1cc to Mr.M.Swaminathan, Advocate SR.70414 +1cc to Mr.N.Quadir Hoseyn, Advocate SR.70269 TCA.No.1180 of 2010 Sd/- Assistant Registrar(Insp cell) //True Copy// Sub Assistant Registrar rs To 1.The Income Tax Appellate Tribunal, Chennai 'D' Bench. Chennai. Chennai. 2.The Commissioner of Income Tax(Appeals) Tiruchirappalli. Tiruchirappalli. 3.The Deputy Commissioner of Income Tax Circle II Tiruchirappalli. Tiruchirappalli. +1cc to Mr.M.Swaminathan, Advocate SR.70414 +1cc to Mr.N.Quadir Hoseyn, Advocate SR.70269 TCA.No.1180 of 2010 VBA(CO)CB(10/10/2019)CB(05/11/2019)