M/S. Madras Engineering Industries P Ltd.,14, Sathyanarayana Avenue,R.a.puram,Chennai - 600 028Pan : Aaacm 4509 P v. The Deputy Commissioner Of Income Tax.circle - 4(1),Chennai - 600 034

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 23.02.2021 THE HON'BLE MR. JUSTICE M.DURAISWAMYAND THE HON'BLE MRS.JUSTICE T.V.THAMILSELVI M/s. Madras Engineering Industries P Ltd.,14, Sathyanarayana Avenue,R.A.Puram,chennai - 600 028PAN : AAACM 4509 P ... Appellant/Appellant in both TCAs vs. The Deputy Commissioner of Income Tax.Circle - 4(1),Chennai - 600 034. ... Respondent/Respondent in both TCAs Appeals preferred under Section 260A of the Income TaxAct, 1961, against the order of the Income Tax AppellateTribunal, Chennai, ''A'' Bench, dated 21.09.2016 inI.T.A.Nos.2259 Mds/2015 & 126/Mds/2016 for the AssessmentYear 2010-2011 and this appeal preferred against theCommissioner of Income Tax (Appeals) 8 Chennai order dated30.10.2015 made in ITA.No. 18/2013-14, 18/2014-15 & 61/2015-16for the Assessment Year 2010-2011, 2011-12 & 2012-2013 andagainst the Deputy Commissioner of Income Tax, Company Circle– IV, (1), Chennai order dated 27.03.2013 made inPAN/GIR.No.AAACM4509A for the Assessment Year 2010 -2011. COMMON JUDGMENT (Judgment was delivered by M. DURAISWAMY, J.) These appeals, filed by the Revenue under Section 260Aof the Income Tax Act, 1961 (for short, the Act) are directedagainst the common order dated 21.09.2016 made inI.T.A.Nos.2259 Mds/2015 & 126/Mds/2016 on the file of theIncome Tax Appellate Tribunal, Chennai, ''A'' Bench (forbrevity, the Tribunal) for the Assessment Year 2010-2011.https://hcservices.ecourts.gov.in/hcservices/ 2.The appeals were admitted on 14.11.2017 on thefollowing substantial questions of law: “(i) Whether the Income Tax AppellateTribunal is correct in law in sustaining thedisallowance of the claim for deduction ofguarantee commission paid to the Directors ofthe assessee company, including a non-wholetime Director, by questioning the necessity ofsuch payment in the course of business of theassessee company? (ii) Whether the Revenue is empowered toquestion the necessity of payment in the courseof business of the assessee company eitherunder section 37(1) of the Income Tax Act, 1961or under section 40A(2)(a) of the said Act orunder any other provision of the said Act? (iii) Whether the Income Tax AppellateTribunal erred in law in sustaining thedisallowance or rent payments to a Directortowards rent of a property owned by suchDirector and taken by the company on leaseand/or tenancy to provide rent freeaccommodation to the same Director under thecontract of employment of the Director with theassessee company? (iv) Whether the Income Tax AppellateTribunal erred in law in disregarding theoriginal transaction between the assesseecompany and its Director under section 40A(2)(a) of the Income Tax Act, 1961 with regard topayment of rent to a Director in respect of thepremises leased from such Director and treatingthe same as payment of remuneration in anotherform notwithstanding the existence of anenforceable lease agreement and/or rentalagreement? (v) Whether the Income Tax AppellateTribunal erred in law in sustaining thedisallowance fo payment of rent by the assesseecompany to its Director for the property takenon lease/rent from the Director, though noauthority had questioned ;the fair market valueof the rent paid to the Director of theproperty leased to the assessee company?" .3. We have heard Mr.M. Kaushik, learned counsel for theappellant and Mr. Karthik Ranganathan, learned StandingCounsel for the respondent. https://hcservices.ecourts.gov.in/hcservices/ (v) Whether the Income Tax AppellateTribunal erred in law in sustaining thedisallowance fo payment of rent by the assesseecompany to its Director for the property takenon lease/rent from the Director, though noauthority had questioned ;the fair market valueof the rent paid to the Director of theproperty leased to the assessee company?" .3. We have heard Mr.M. Kaushik, learned counsel for theappellant and Mr. Karthik Ranganathan, learned StandingCounsel for the respondent. https://hcservices.ecourts.gov.in/hcservices/ 4. It may not be necessary for this Court to decide theSubstantial Questions of Law framed for consideration onaccount of certain subsequent developments. The Government ofIndia enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3of 2020) to provide for resolution of disputed tax and formatters connected therewith or incidental thereto. The Act ofthe Parliament received the assent of the President on 17[th]March 2020 and published in the Gazette of India on 17[th] March2020. 5. We are informed by the learned counsel for theappellant that the assessee has already been issued with Form– 3 on 11.12.2020 and the learned counsel for the appellantseeks permission of this Court to withdraw the appeals. 6. In view of the submission made by the learned counselfor the appellant, the Tax Case Appeals are dismissed aswithdrawn. No costs. Sd/-Assistant Registrar //True Copy//Sub Assistant RegistrarRjTo 1. The Income Tax Appellate Tribunal, Chennai, ''A'' Bench. 2.The Commissioner of Income Tax (Appeals) 8, Chennai. 3. The Deputy Commissioner of Income Tax. Circle - 4(1), Chennai - 600 034. T.C.A.Nos.481 & 484 of 2017 KJ(CO)GN(24/03/2021)