Commissioner Of Income Taxchennai v. M/S.jai Motors Limited

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 7.12.2018 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE DR.JUSTICE ANITA SUMANTH Tax Case No.1467 of 2007 Commissioner of Income TaxChennai Appellant Vs. M/s.Jai Motors Limited,No.10, Smith Road,Chennai 600 002. Respondent Tax Case Appeal filed under Section 260A of the IncomeTax Act, 1961 against the order of the Income Tax AppellateTribunal, Madras 'B' Bench, Chennai, dated 1.6.2007 made inITA No.599/Mds/2001 against the order of the commisioner ofIncome Tax (Appeals) X in ITA NO.313/1999-2000 Dated31.01.2001 for the Assessment Year 1997-1998 against theorder of the Joint commisioner of Income Tax -special Range-XI, Chennai. 34 in AAAC30848 A GI NO.103,dated 17.12.1999for the Assessment year 1997-98 . For Appellant : Mr.T.R.Senthilkumar Senior Standing Counsel For Respondent : Mr.A.s.Sriraman for Mr.S.Sridhar This Tax Case Appeal has been filed by the Revenuecalling in question the correctness of the order passed bythe Income Tax Appellate Tribunal, Madras 'B' Bench,Chennai, dated 1.6.2007 made in ITA No.599/Mds/2001 byraising the following substantial questions of law:"(i) Whether in the facts and circumstances ofthe case, the Tribunal was right in holdingthat the payment equal to the book value ofroyalty paid while taking over the business ofa firm should be treated as revenue https://hcservices.ecourts.gov.in/hcservices/ expenditure?ii) Whether in the facts and circumstances ofthe case, the Tribunal was right in holding anon compete fee termed as payment for "businessrights" is to be treated as revenueexpenditure, since the rights were initiallyfor a term of 10 years and not in perpetuity?iii) Whether in the facts and circumstances ofthe case, the Tribunal was right in upholdingthe claim of the assessee made for the firsttime in the revised return found to be invalidhaving been filed beyond time?"2. When the matter is taken up for admission, thelearned Standing Counsel brought to our notice the Circularinstruction issued by the Central Board of Direct Taxesvide Circular No.3/2018 dated 11.7.2018 wherein it isstipulated that appeals shall not be filed/pursued by theDepartment before the High Court in cases where the taxeffect does not exceed Rs.50 lakhs. 3. In the instant case, the tax effect is said to beless than the monetary limit imposed and therefore, theappeal filed by the Revenue is dismissed as not pressed,keeping open the substantial questions of law fordetermination in an appropriate case. Sd/-- Assistant Registrar(CS ) //True Copy// Sub Assistant Registrar 1.The commisioner of Income Tax (Appeals) X, Chennai.2.The Joint commisioner of Income Tax -special Range -XI,Chennai. 34