Commissioner Of Income Tax Iii,Chennai v. M/S.pierce Leslie India Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22.08.2019 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.234 of 2012 Commissioner of Income Tax III,Chennai. .. Appellant/Appellant -vs- M/s.Pierce Leslie India Ltd.,No.37, Dr.P.V.Cherian Crescent,Egmore, Chennai-600 008. .. Respondent/Respondent Appeal under Section 260A of the Income-tax Act, 1961,against the order dated 16.03.2012, on the file of theIncome-tax Appellate Tribunal 'D' Bench, Chennai, inI.T.A.No.1244/Mds/2011 for the assessment year 2005-06Against the order of the Commissioner of Income Tax AppealsV, chennai in ITA.NO.313/2007-2008 dated 08/04/2011 andagainst the order of Income Tax officer,Company Circle V(2), chennai order dated 22.10.2007 in AAA CP 2746 F/2005-2006. For Appellant :Ms.V.Pushpa,Junior Standing Counsel :for Mr.M.Swaminathan,Senior Standing Counsel For Respondent : Mr.V.S.Jayakumar ****** (Delivered by T.S.Sivagnanam, J.) This appeal filed by the appellant/Revenue under Section260A of the Income-tax Act, 1961, is directed against theorder dated 16.03.2012, passed by the Income-tax AppellateTribunal 'D' Bench, Chennai, in I.T.A.No.1244/Mds/2011 forthe assessment year 2005-06. 2.The above appeal was admitted, on 05.09.2012, on thefollowing substantial questions of law:-“(i) Whether under the facts andcircumstances of the case, the Tribunal wasright in holding that the guarantee paymentsof Rs.200 lakhs made by the assessee toPunjab National Bank on behalf of itssubsidiary company is for the purpose ofassessee's business on account of commercialexpediency and is revenue expenditure?(ii) Whether under facts and circumstancesof the case, the Tribunal was right inholding that the assessee was in the businessof providing guarantee on behalf of itssubsidiary companies?” 3.Heard Ms.V.Pushpa, learned Junior Standing Counsel forMr.M.Swaminathan, learned Senior Standing Counsel for theappellant and Mr.V.S.Jayakumar, learned counsel for therespondent. 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 08.08.2019 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(insp cell) //True Copy// Sub Assistant RegistrarabrTo1.The Income Tax Officer (OSD), Company Circle V(2), Chennai.2.The Commissioner of Income-tax (Appeals)-V, 121, Mahatma Gandhi Road, Chennai-600 034.3.The Income-tax Appellate Tribunal 'D' Bench, Chennai.+1cc to Mr.M.Swaminathan , Advocate SR.No. 72334+1cc to Mr.U.S.Jaya kumar , Advocate SR.No. 71911T.C.A.No.234 of 2012A.SK(20/11/2019)