Commissioner Of Income Tax,Coimbatore v. M/S.vijayeswari Textiles Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 26.09.2019 CORAM : THE HON'BLE DR.VINEET KOTHARI, ACTING CHIEF JUSTICEANDTHE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case (Appeal) No.96 of 2014 Commissioner of Income Tax,Coimbatore. .. Appellant -vs- M/s.Vijayeswari Textiles Ltd.,10/400 Palghat Road,Kuniamuthur,Coimbatore-641 008. .. Respondent Tax Case Appeals filed under Section 260A of the Income TaxAct, 1961, against the order of the Income tax AppellateTribunal, 'B' Bench, Chennai, dated 23.08.2011 made inITA.No.963/Mds/2011, against the order dated 02/02/2011 made in ITA No.437/2009-2010 on the file of the Commissioner of Income Tax (Appeal)-II,Coimbatore, against the order dated 30/11/2009 made in PAN/GIRNo. on the file of the Assistant Commissioner ofIncome Tax, Coimbatore, for the Assessment Year 2006-2007. For Appellant: Mr.T.R.SenthilkumarSr. Standing Counselassisted byMs.K.G.UsharaniJr. Standing Counsel For Respondent : M/s.Meenakshi Sundaram JUDGMENT (Delivered by The Hon'ble Acting Chief Justice) This Tax Case Appeal has been filed by the Revenue,calling in question the correctness of the order passed by theIncome Tax Appellate Tribunal, 'B' Bench, Chennai, dated23.08.2011, for the Assessment Year 2006-07, by raising thefollowing substantial questions of law: “1.Whether the Tribunal was correct in holdingthat the expenditure incurred by the assessee onreplacement of electronic yarn cleaner is allowableas revenue expenditure as well as current repair? 2.Whether under the facts and circumstances ofthe case the Tribunal was right in holding that theentire payment made for ERP software is foroutright purchase of the software and there is noprovision for rendering any professional serviceand therefore 194 J and consequently 40 (a) (ia) donot apply to the case of the assessee? 3.Whether based on the material availablebefore it the Income Tax Appellate Tribunal couldhave come to the conclusion that it is not possibleto divide the turnkey project into two, one towardsthe cost of software and another towards cost ofimplementation of deliverables? 4.Whether under the facts and in thecircumstances of the case, the Income Tax AppellateTribunal was right in holding that the amount ofRs.3,90,64,745/- written off out of receivabletaken over from the sister concern is allowable asbusiness loss?” 2. When the matter is taken up for hearing, the learnedSenior Standing Counsel brought to our notice the Circularinstruction issued by the Central Board of Direct Taxes videCircular No.17/2019 dated 8[th] August 2019, wherein, it isstipulated that appeals shall not be filed/pursued by theDepartment before the High Court in cases where the tax effectdoes not exceed Rs.1,00,00,000/- (Rupees One Crore). 3. In the instant case, the tax effect is said to be lessthan the monetary limit imposed and therefore, the Appeal filedby the Revenue is dismissed, as withdrawn, keeping open thesubstantial questions of law for determination in appropriatecases. No costs. Sd/- Assistant Registrar(CS VI) //True Copy// Sub Assistant RegistrarbbrTo:1. The Registrar, Income Tax Appellate Tribunal, Madras "B" Bench, Chennai.2. The Commissioner of Income Tax (Appeals)-II, Coimbatore.3. The Assistant Commissioner of Income Tax, Salary Circle I, Coimbatore.+1cc to Mr.T.R.Senthilkumar, Advocate Sr.83042T.C.(A) No.96 of 2014 rsv[co]srg 18/10/2019