Commissioner Of Income Tax Ii v. M/S.fairmacs Shipping & Transport Services Pvt. Ltd., New

In the High Court of Judicature at MadrasDated : 27.08.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAMandThe Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.844 of 2015 Commissioner of Income Tax II,121, Nungambakkam High Road,Chennai - 600 034. ...Appellant/RespondentVs M/s.Fairmacs Shipping & TransportServices Pvt. Ltd.,New No.31, Moore Street, Chennai - 600 001.PAN: ...Respondent/Appellant APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 20.03.2015 made in ITA.No.3049/MDS/2014 on thefile of the Income Tax Appellate Tribunal, Chennai 'C' Bench forthe assessment year 2010-11. Preferred against the order dated 16.9.2014 made in AppealNo.669/2013-14 on the file of the Commissioner of Income Tax(Appeals)-II, Chennai for the Assessment year 2010-11, andagainst the Assessment order of the Assistant Commissioner ofIncome Tax, Company Circle II(1) Chennai dated 20.3.13 for theAssessment year 2010-2011. For Appellant : Mr.Karthik Ranganathan, SSC assisted by Mr.S.Rajesh, SC For Respondent: Mr.R.Sandeep Bagmar We have heard Mr.Karthik Ranganathan, learned SeniorStanding Counsel, assisted by Mr.S.Rajesh, learned StandingCounsel appearing for the appellant/revenue and Mr.R.SandeepBagmar, learned counsel appearing for the respondent/assessee. 1 https://hcservices.ecourts.gov.in/hcservices/ 2.This appeal, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961 is directed against the order dated20.03.2015 made in ITA.No.3049/MDS/2014 on the file of theIncome Tax Appellate Tribunal, Chennai 'C' Bench for theassessment year 2010-11. 3.The appeal was admitted on 14.10.2015 on the followingsubstantial questions of law :“1.On the facts and in the circumstances of thecase, whether the ITAT is justified in holding thatthe loans and advances taken by a Concern cannot besubjected to addition as deemed dividend underSection 2(22)(e) of the Act? 2.Whether, on the facts and in the circumstancesof the case, the ITAT was right in holding that theassessee Company was not the beneficial owner ofshareholding in its Sister Concern when both theshareholders are one and the same in both theCompanies? 3.On the facts and in the circumstances of thecase, whether the restrictive interpretation ofsection 2(22)(e) by the ITAT does not amount toignoring the second limb of provisions to Section 2(22)(e) wherein the word "Concern" is also includedfor the purpose of taxation of deemed dividend inits hands? 4.Whether, on the facts and in the circumstancesof the case, the Honourable ITAT was right ingranting liberty to the Revenue for roping in theshareholders concerned when the law does not provideto do so?" 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 said 2 circular, 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 //True Copy// Sub Assistant Registrar cseTo 1.The Assistant Registrar, The Income Tax Appellate Tribunal, Chennai 'C' Bench.2.The Commissioner of Income Tax(Appeal)-II, Chennai.3.The Assistant Commissioner of Income Tax, Company CircleII(1), Chennai.TCA.No.844 of 2015RSI(CO)CB(19/11/2019) 3