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

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 19.8.2019 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM AND THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.785 of 2010 Commissioner of Income Tax-I, Tiruchirapalli...AppellantVsM/s.Metro Fabrics, Karur...RespondentAPPEAL under Section 260A of the Income Tax Act, 1961againsttheorderdated12.1.2010madeinITA.No.1704/Mds/2009 on the file of the Income TaxAppellate Tribunal, Chennai 'D' Bench for the assessmentyear 2002-03 against the order dated 24.08.2009 made inITA.NO.137/07-08 for the Assement year 2002-2003 on thefile of the Commissioner of Income tax (Appeals)Tiruchirapalli against the order ate 31.03.2002 made inPAN GIR NO.AAAFM5247P on the file of the DeputyCommissioner of Income Tax Circle II, Tiruchirapalli. For Appellant:Mr.M.Swaminathan, SSC, assisted by Ms.S.Premalatha, SCFor Respondent:Mr.N.Quadir Hoseyn We have heard Mr.M.Swaminathan, learned Senior StandingCounsel, assisted by Ms.S.Premalatha, learned StandingCounsel appearing for the appellant – Revenue andMr.N.Quadir Hoseyn, learned counsel appearing for therespondent – assessee. 2. This appeal, filed by the Revenue under Section 260Aof the Income Tax Act, 1961 is directed against the orderdated 12.1.2010 made in ITA.No. 1704/Mds/2009 on the fileof the Income Tax Appellate Tribunal, Chennai 'D' Bench forthe assessment year 2002-03. 3. The appeal was admitted on 23.8.2010 on the followingsubstantial questions of law : “i. Whether, on the facts andcircumstances of the case, the IncomeTax Appellate Tribunal was right inholding that the face value of DEPB ischargeable to tax on accrual basis andthat the profit on sale of DEPBrepresenting the excess of saleproceeds of DEPB over its face value isliable to be considered under Section28(iiid) at the time of its sale? Andii. Whether, on the facts and in thecircumstances of the case, the IncomeTax Appellate Tribunal was right in notholding that the scheme of DEPB is notan automatic benefit to an exporter inthe form of cash assistance, but arisesonly on making application to theconcerned Authority pursuant to exportsand is in the nature of 'benefit ofperquisite arising out of business' andtherefore, is chargeable to tax underSection 28(iv)?” 4. The learned Senior Standing Counsel for the appellantsubmits that the above appeal is not pursued by the Revenueon account of the low tax effect in terms of CircularNo.17/2019 dated 08.8.2019 issued by the Central Board ofDirect Taxes. By the said Circular, the monetary limit forfiling or pursuing an appeal before the High Court has beenincreased to Rs.1 Crore. It is further submitted that thetax effect in this case is less than the threshold limit. 5. In the light of the said submissions, the above taxcase appeal is dismissed on account of the low tax effect.The substantial questions of law framed are left open. Inthe event the tax effect is above the threshold limit fixedin the said circular, liberty is granted to the Revenue tomake a mention to this Court to restore the appeal to beheard and decided on merits. No costs. Sd/- Assistant Registrar(CS) //True Copy// Sub Assistant Registrar To THE INCOME TAX APPELLATE TRIBUNAL, CHENNAI 'D' BENCH. 2.THE COMMISSIONER OF INCOME TAX (APPEALS) TIRUCHIRAPALLI 3.THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE II,TIRUCHIRAPALLI.