Commissioner Of Income Tax - Ii, Tiruchirapalli v. M/S.raman & Raman Automobiles Ltd

CORAM: THE HON'BLE MR. JUSTICE M.DURAISWAMYAND THE HON'BLE MRS.JUSTICE T.V.THAMILSELVI Commissioner of Income Tax - II,Tiruchirapalli... AppellantVs.M/s.Raman & Raman Automobiles Ltd.,48, Thiruvidaimarudur Road,Kumbakonam.... Respondent Appeal preferred under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal,Madras, "D" Bench, dated 30.03.2011 in I.TA.No.661/Mds/2010,Assessment Year 2006-07, against the order of the Commissionerof Income Tax(Appeals) in ITA.No.364/08-09 dated 01.02.2010 inG.I.No./PAN.No. for the Assessment year 2006-07against the proceedings of the Assistant Commissioner of IncomeTax, Circle -I, Kumbakonam, dated 24.12.2008.For Appellant : Ms.V.Pushpa Standing CounselFor Respondent : Mr.R.Sivaraman for M/s.C.V.RajanJUDGMENT (Judgment was delivered by M.DURAISWAMY, J.) We have heard Ms.V.Pushpa, learned Standing Counsel for theappellant/Revenue and Mr.R.Sivaraman, learned counsel for therespondent/assessee. 2.The appeal, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961 (for short, the Act) are directedagainst the order dated 30.03.2011 made in I.TA.No.661/Mds/2010on the file of the Income Tax Appellate Tribunal, Chennai, "D"Bench (for brevity, the Tribunal) for the Assessment Years 2006-07. 3.The appeal was admitted on 28.09.2011 on the followingsubstantial questions of law:“1)Whether on the facts and circumstances ofthe case, the Income Tax Appellate Tribunal was https://hcservices.ecourts.gov.in/hcservices/ right in holding that the assessing officer wasnot justified in disallowing the additionalremuneration paid to the directors as incentivepayment to the tune of Rs.27,04,285/- even thoughsuch payments were not warranted in addition tothe normal remuneration for performing the dutiesof the directors in contributing to theprofitable operation of the company and withoutappreciation that in any case the liability hadnot accrued as on 31.03.2006 since the board ofdirectors had ratified the payment only a thetime of the annual general meeting in September2006? 2)Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding that theexpenditure incurred on partitions and falseceilings in the leasehold building could berevenue expenditure? 3)Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was justified in failing totake into consideration explanation 1 to Section32 of the Income TaxAct, 1961 which covered suchexpenditure and treated them as “capitalexpenditure”onwhichdepreciationwasavailable?” 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 08.08.2019 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 these cases areless than the threshold limit. 5.In the light of the said submissions, the above Tax CaseAppeal is dismissed as withdrawn on account of the Low TaxEffect. The substantial questions of law framed are left open.In the event the tax effect in these cases is above thethreshold limit fixed in the said Circular, liberty isgranted to the Revenue to make a mention to this Court torestore the appeal to be heard and decided on merits. No costs.Sd/-Assistant Registrar (CS.VI) /True Copy/ Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai, "D" Bench. 2.The Assistant Commissioner of Income Tax, Circle I,Kumbakonam. 3.The Commissioner of Income Tax(Appeals),No.44, Williams Road, Cantonment,Tiruchirappalli- 620 001. AKM/17.03.21/3P-4C/ T.C.A.No.391 of 2011 19.02.2021