Commissioner Of Income Tax – Iv, Chennai v. M/S.gomathy & Co. Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 05.12.2019 CORAM : THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN andTHE HONOURABLE MR.JUSTICE P.VELMURUGAN T.C.A.No.989 of 2019 Commissioner of Income Tax – IV,Chennai.... AppellantVs M/s.Gomathy & Co.Chennai. ... Respondent PRAYER : Appeal under Section 260A of the Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal, Madras“B” Bench, dated 30.05.2003 passed in ITA.No.125/Mds/95 againstthe order of the Commissioner of Income Tax (Appeals VI),Madras, dated 3/10/1994 in made in IT/INT/CIT/Appeal No.129/94-95/Spl.Range VIII and against the order of the DeputyCommissioner of (IT) Spl. Range VIII, Madras, in made in PANGIRNo.304-C dated 28.02.1994 for the Assessment Year 1991-92. For Appellant : Ms.S.Premalatha Junior standing counsel J U D G M E N T (Judgment of the Court was delivered by N.KIRUBAKARAN, J) This Tax Case Appeal has been preferred by the Revenueagainst the order dated 30.05.2003 passed in ITA.No.125/Mds/95on the file of the Income Tax Appellate Tribunal, Chennai 'B'Bench for the assessment year 1991-92. 2.The order of the CIT(A) for the assessment year, 1991-92 was challenged before the Tribunal by the Revenue. TheAppellate Tribunal rejected the contention of the Revenue anddismissed the same. Against the order of the Appellate Tribunalonly, the present appeal has been filed. https://hcservices.ecourts.gov.in/hcservices/ 3.The appeal is admitted on the following substantialquestions of law :(i)Whether in the facts and circumstances of the case,the Tribunal was right in allowing a deducting of theamounts spent on replacement of old manual coners bynewimportedautoconersasrevenueexpenditure/current repairs?(ii)Whether in the facts and circumstances of thecase, replacement of independent complete machinerywhich resulted in reduction of labour and increase ofefficiency/capacity can be treated as revenueexpenditure? (iii)Whether in the facts and circumstances of thecase, the Tribunal was right in treating theexpenditure as a revenue expenditure, when the claimby the assessee was that it was repairs to existingmachinery? 4.Ms.S.Premalatha, learned Standing Counsel appearing onbehalf of the appellant would submit that the tax effect in thiscase is less than Rs.1 crore and is covered by CircularNo.17/2019 dated 08.08.2019 issued by the Director, CentralBoard of Direct Taxes, Department of Revenue, Ministry ofFinance, Government of India, Delhi. As per the said circular,the monetary limit to file an appeal before the High Court isfixed at Rs.1 crore. In this case, tax effect is less than Rs.1crore and therefore, the case has to be dismissed. 5.This Court perused the circular dated 08.08.2019 andParagraph No.2 of the said Circular, which prescribes monetarylimit for filing appeal is usefully extracted as follows: 6.In view of the submissions made by the learned counselappearing on behalf of the appellant and also in view of theCircular No.17/2019 dated 08.08.2019 issued by the Director,Central Board of Direct Taxes, Delhi, the Tax Case Appeal isdismissed on account of tax effect. However, the substantialquestions of law framed is left open. In the event the taxeffect is above the 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// True Copy//Sub Assistant RegistrarsaiTo1.The Commissioner of Income Tax – I,63, Race Course Road,Coimbatore 641 018.2.Income Tax Appellate Tribunal 'B' Bench,Chennai.3.The Deputy Commissioner (IT),Special Range VIII, Madras.T.C.A.No.989 of 2019VGII(CO)CSR: 20/01/2020