Commissioner Of Income Tax,Chennai v. M/S.indian Additives Limited,Express Highway,Manali, Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 02.08.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAMand The Honourable Ms.Justice SATHI KUMAR SUKUMARA KURUP Tax Case Appeal No.1382 of 2010 Commissioner of Income Tax,Chennai....Appellant Vs M/s.Indian Additives Limited,Express Highway,Manali, Chennai....Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 13.11.2009 made in ITA.No.2238/mds/2008 on thefile of the Income Tax Appellate Tribunal, 'A' Bench, Chennaifor the assessment year 1999-2000, against the order of theCommissionerofIncome-Tax(Appeals-III),Chennai-34inITA.No.884/06-07/A-III dated 26/08/2008 and arising out ofAssessment Order of Assistant Commissioner of Income Tax,Company Circle 11(3), Chennai-34 dated 11/12/2006 in PAN-2002-01/AAAC11445G for the Assessment year 1999-2000, (Status-Company). For Appellant: Mr.Karthick Ranganathan Senior Standing CounselFor Respondent: Mr.G.Baskar JUDGMENT (Delivered by T.S.Sivagnanam,J) This appeal, filed by the Revenue under Section 260A of theIncome Tax Act, 1961 (for short, the Act) is directed againstthe order 13.11.2009 made in ITA.No.2238/mds/2008 on the file ofthe Income Tax Appellate Tribunal, 'A' Bench, Chennai (forbrevity, the Tribunal) for the assessment year 1999-2000 2.The following two substantial questions of law were raisedby the revenue when the tax case appeal was listed for admission:“1.Whether, on the facts and in thecircumstances of the case, the Income Tax https://hcservices.ecourts.gov.in/hcservices/ Appellate Tribunal was right in holding that the“running royalty” paid by the assessee to theforeign company is allowable as revenueexpenditure? 2.Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in holding that interest under Sections 234Band 234C should be levied after allowing MATcredit contrary to the scheme of schedule G toForm 1 viz., the return form prescribed for thecompanies which clearly gives the order andsequence in which credit for various payments oftax is to be allowed and as per which, MAT creditis to be set off only after TDS, advance tax andself assessment tax?” 3.We have heard Mr.Karthick Ranganathan, learned SeniorStanding Counsel for the appellant/revenue and Mr.G.Baskar,learned counsel appearing for the respondent/assessee. 4.By order dated 22.03.2011, the Hon'ble Division Benchentertained the tax case appeal with regard to the firstsubstantial question of law as framed above. With regard to thesecond substantial question of law, the Hon'ble Division Benchheld that the same is covered by the decision of the Hon'bleSupreme Court in the case of Commissioner of Income Tax vs.Tulsyan Nec Ltd. [(2011) 330 ITR 226(SC)]. Thus, the questionto be decided in this appeal is question No.1 as framed above.If such is the position, then the tax liability arising out ofthe said issue is less than the threshold limit. Therefore, theappeal filed by the revenue cannot be proceeded on the ground oflow tax effect in terms of Circular No.17/2019 dated 08.08.2019issued by the Central Board of Direct Taxes, by which, themonetary limit for filing or pursuing an appeal before the HighCourt has been increased to Rs.1 Crore. 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 saidcircular, liberty is granted to the Revenue to file a petitionbefore this Court to restore the appeal to be heard and decidedon merits. No costs. Sd/- Assistant Registrar(CS-IX) //True Copy// Sub Assistant Registrar cseTo 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 saidcircular, liberty is granted to the Revenue to file a petitionbefore this Court to restore the appeal to be heard and decidedon merits. No costs. Sd/- Assistant Registrar(CS-IX) //True Copy// Sub Assistant Registrar cseTo 1.The Assistant Registrar, The Income Tax Appellate Tribunal, 'A' Bench, Chennai.2.The Commissioner of Income Tax (Appeals)-III, 121, Mahatma Gandhi Road, Chennai-34.3.The Assistant Commissioner of Income Tax, Company Circle II(3), 121, N.H.Road, Chennai-34.+1cc to Mr.G.Baskar, Advocate, S.R.No.37495 GPL(CO)CB(18/08/2021) TCA.No.1382 of 2010