Hire Purchase And Lease Rentals Accrued On “Nonperforming Assets”? v. Assistant Registrar(Cs-Ix

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 23.07.2018 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.131 of 2007 Commissioner of Income Tax,Chennai. ... Appellant -vs- Upasana Finance Ltd.,96/1 Luz Church Road,Chennai-600 004 Tax Case (Appeal) filed under Section 260A of the Income TaxAct, 1961 against the order of the Income Tax Appellate TribunalMadras 'B' Bench, dated 20.01.2006 in I.T.A.No.726/Mds/99 forthe assessment year 1995-96 preferred against the order of theCommissioner of Income Tax (Appeals)X Chennai in I.T.A. No.104/98-98 dated 12.02.1999 and filed against the order of theDeputy Commissioner of Income Tax, Special Range XI, Chennai inPAN /GIR/No.4.U/95-96 dated 25.03.1998 in the assessment year1995-1996. For Appellant:Mr.M.Swaminathan, Standing CounselFor Respondent :Mr.P.J.Rishikesh Heard Mr.M.Swaminathan, learned Standing Counsel for theappellant and Mr.P.J.Rishikesh, learned counsel for therespondent. 2.This tax case appeal has been filed challenging the orderof the Income Tax Appellate Tribunal Madras 'B' Bench, dated20.01.2006 in I.T.A.No.726/Mds/99 for the assessment year 1995-96. 3.The above appeal has been admitted on the followingsubstantial questions of law:-“1.Whether in the facts and circumstances ofthe case, the Tribunal was right in deleting the https://hcservices.ecourts.gov.in/hcservices/ hire purchase and lease rentals accrued on “non-performing assets”? 2.Whether in the facts and circumstances of thecase, the Tribunal was right in holding that theassessee can be allowed to account for income fromnon-performing assets alone on a cash basis, when itis following a mercantile system of accounting, andhybrid system is not allowed under the Income TaxAct?” 4.Before we proceed to consider the substantialquestions of law raised in this appeal, we have to first takenote of the fact that the tax effect in the present appealrelevant for the assessment year 1995-96 is less than thethreshold limit. In the case of Commissioner of Income Tax vs.N.Meenakshisundaram [Tax Case (Appeal) Nos.868 and 869 of 2008;Dated 23.04.2018], one of us (TSSJ) had an occasion to considerthe various circulars issued by the Central Board of DirectTaxes (CBDT) as regards the threshold limits fixed for filingthe appeals by the Revenue or pursue the appeals, which arepending from 2008 onwards. 5.Further, it is relevant to note that by CircularNo.3/2018, dated 11.07.2018, monetary limit has further beenincreased and appeals be maintainable before the High Courts.It has been increased to Rs.50,00,000/-. Hence, viewed from anyangle, this appeal could not have been filed. 6.Thus, by applying the above Circular issued by the CBDT,this appeal ought not to have been filed by the Revenue andhence, for that reason, this tax case appeal is dismissed andthe substantial questions of law, framed for consideration, areleft open. No costs. -s/d- Assistant Registrar(CS-IX) True Copy Sub-Assistant Registrar abrTo 1.The Commissioner of Income Tax, Chennai. Chennai. https://hcservices.ecourts.gov.in/hcservices/ 2.The Income Tax Appellate Tribunal Madras 'B' Bench. 3.The Commissioner of Income Tax (Appeals) III, 121, Mahatma Gandhi Road, Chennai-600 034. 121, Mahatma Gandhi Road, Chennai-600 034. 4. The Commissioner of Income Tax(appeals )X 121, Mahathma Gandhi Salai Chennai 34. Chennai 34. 5. The Dpeuty Commissioner of Income Tax Special Range XI Chennai 34. +1 CC to Mr.P.J.Rishikesh, Advocate sr 58996. Tax Case Appeal No.131 of 2007 CP(CO)SP(18/09/2018)