M/S.redington (India) Ltd.,Spl Guindy House v. The Assistant Commissioner Of Income Tax,Company Range – V, Chennai – 600 034

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:25.03.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMYANDTHE HON'BLE MRS.JUSTICE T.V. THAMILSELVI Tax Case Appeal No.1159 of 2015 M/s.Redington (India) Ltd.,SPL Guindy House,95, Mount Road, Guindy,Chennai – 600 032. ... Appellant/Appellant Vs. The Assistant Commissioner of Income Tax,Company Range – V, Chennai – 600 034. ... Respondent/RespondentTax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order of the Income Tax AppellateTribunal, Madras "B" Bench, dated 02.05.2013 passed inI.T.A.No.2164/Mds/2010. Against the order of the Additional Commissioner of IncomeTax, Company Range V(i.c), Chennai made in PANNo.AABCR0347Pdated 28/10/2010 against the order of the Joint Commissioner ofIncome Tax, Transfer Pricing officer-II, Chennai made inF.No.R-202/TPO-II/A.Y.2006-07dated12.10.2009fortheAssessment Year 2006-07. For Appellant : Mr.R.VenkatanarayananFor Respondent : Mr.T.Ravi Kumar, Senior Standing Counsel This appeal filed by the assessee under Section 260A of theIncome Tax Act, 1961 ('the Act' for brevity), is directedagainst the order dated 02.05.2013 passed by the Income TaxAppellate Tribunal, Madras “B” Bench, Chennai ('the Tribunal'for brevity) in I.T.A.No. 2164/Mds/ 2010 for the AssessmentYear 2006-07. The above appeal was admitted on 09.12.2015 on thefollowing Substantial Questions of Law for consideration: “1)Whether on the facts and in the circumstances https://hcservices.ecourts.gov.in/hcservices/ of the case, the Tribunal was right in law in holdingthat the expenditure incurred towards temporarystructure is capital in nature and not allowable asrevenue expenditure? 2)Whether on the facts of the case, the Tribunalwas right in law in holding that the tax is deductibleon the gross royalty payments made to MicrosoftCorporation and not on the net amount payable afterconsidering the sales return? 3)Whether tax is deductible in respect of priceof software returned to Microsoft even before the duedate for payment of the price in view of CBDT CircularNo.790 dated 20.04.2000? 4)Whether on the facts and in the circumstancesof the case, the Tribunal was right in law in holdingthat tax is deductible on the sale of copyrightedarticle (software) without appreciating that the saleconsideration constitutes business profits of theforeign company not taxable in India?” 2. We have heard Mr.R.Venkatanarayanan, learned counsel forthe appellant/assessee and Mr.T.Ravi Kumar, learned SeniorStanding Counsel for the respondent/ Revenue. 3. It may not be necessary for this Court to decide theSubstantial Questions of Law framed for consideration on accountof certain subsequent developments. The Government of Indiaenacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of2020) to provide for resolution of disputed tax and for mattersconnected therewith or incidental thereto. The Act of theParliament received the assent of the President on 17[th] March2020 and published in the Gazette of India on 17[th] March 2020. 4. We are informed by the learned counsel for the appellant/assessee that the assessee has already filed the requisite Forms- 1 & 2 on 31.12.2020 under Section 4 of the Act. 3. It may not be necessary for this Court to decide theSubstantial Questions of Law framed for consideration on accountof certain subsequent developments. The Government of Indiaenacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of2020) to provide for resolution of disputed tax and for mattersconnected therewith or incidental thereto. The Act of theParliament received the assent of the President on 17[th] March2020 and published in the Gazette of India on 17[th] March 2020. 4. We are informed by the learned counsel for the appellant/assessee that the assessee has already filed the requisite Forms- 1 & 2 on 31.12.2020 under Section 4 of the Act. 5. In the light of the fact that the assessee has alreadyavailed the benefit under the Act, no useful purpose would beserved in keeping this appeal pending. At the same time,safeguarding the interest of the assessee in the event the orderto be passed by the Department under the Act is not in favour ofthe assessee. Accordingly, the Tax Case Appeal stands disposedof on the ground that the assessee has already filed therequisite Forms – 1 & 2 and the Department shall process theapplication at the earliest in accordance with the said Act andcommunicate the decision to the assessee at the earliest. Asobserved, the assessee is given liberty to restore the appeal inthe event the ultimate decision to be taken on the Forms filed by the assessee under Section 4 of the said Act is not in favourof the assessee. If such a prayer is made, the Registry shallentertain the prayer without insisting upon any application tobe filed for condonation of delay in restoration of the appealand on such request made by the assessee by filing aMiscellaneous Petition for Restoration, the Registry shall placesuch petition before the Division Bench for orders. 6. With this observation, the Tax Case Appeal standsdisposed of with the aforementioned liberty and consequently,the Substantial Question of Law is left open. No costs. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar vaTo 1. Income Tax Appellate Tribunal, Madras "B" Bench 2.The Assistant Commissioner of Income Tax,Company Range – V, Chennai – 600 034. 3. The Additional Commissioner of Income tAx,Transfer Pricing Officer-II, Chennai. 4. The Joint Commissioner of Income Tax,Transfer pricing officer-ii, Chennai. +1 cc to M/s.Subbaraya Aiyar,Advocate Sr.No. 19732 +1 cc to M/s.T.Ravikumar, Advocate Sr.No. 19757 NMI(CO)RMP(19/04/2021) Tax Case Appeal No.1159 of 2015