M/S.sundaram Clayton Ltd v. The Additional Commissioner Ofincome Tax

DATED: 15.02.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAMandThe Honourable Ms.Justice R.N.MANJULA M/s.Sundaram Clayton Ltd.,No.29, Haddows Road,Chennai - 600 006. ...Appellant Vs The Additional Commissioner ofIncome Tax, Company Range-VI,Chennai - 34....Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 13.04.2016 made in ITA.No.1431/Mds/2013 on thefile of the Income Tax Appellate Tribunal, 'B' Bench, Chennaifor the assessment year 2009-10, against the order of theCommissioner of Income Tax (Appeals), dated 28.03.2013 for theAssessment Yea 2009-2010 against the Additional Commissioner ofIncome Tax, company circle VI(4) and Joint Commissioner ofIncome Tax, Company Range (VI), Chennai respectively for theAssessment Year 2009-10 dated 29.03.2011 and 28.12.2011. For Appellant : Mr.R.Vijayaraghavan for M/s.Subbaraya Aiyar Padmanabhan This appeal, filed by the assessee, is directed against theorder dated 13.04.2016 made in ITA.No.1431/Mds/2013 on the fileof the Income Tax Appellate Tribunal, 'B' Bench, Chennai ('theTribunal' for brevity) for the assessment year 2009-10. https://hcservices.ecourts.gov.in/hcservices/ 2. The appeal was admitted on 03.04.2018 on the followingsubstantial question of law: "Whether loss on account of cancellation ofan export contract is an allowable businessloss and if so, whether the loss is to berestricted to the total export turnover interms of that export contract?" 3. We have heard Mr.R.Vijayaraghavan, appearing forMr.Subbaraya Aiyar Padmanabhan, learned counsel for theappellant and Mr.J.Narayanasamy, learned Senior Standing Counselappearing for the respondent-Revenue. 4. The assessee is not largely aggrieved by the remand ofthe matter to the Tribunal, but expressed serious reservationand grievances against that part of the order passed by theTribunal restricting the scope of remand. 5. The learned counsel for the appellant submitted that theTribunal ought not to have restricted the remand by observingthat the Assessing Officer should consider the derivativetransaction equivalent to the total export turnover and also toignore the loss on account of premature cancellation/terminationbefore the due date of maturity of the transaction undertaken bythe assessee. In support of this contention, the learned counselplaced reliance on the following decisions:- 6. In the light of the above decisions, we are of theconsidered view that the remand should not be restricted and tothat extent, the order passed by the Tribunal has to be setaside and it should be modified and the remand should be by wayof an open remand. https://hcservices.ecourts.gov.in/hcservices/ 7. Accordingly, the Tax Case Appeal is allowed and the orderpassed by the Tribunal, more particularly in paragraph 11, ismodified and the observations and restrictions placed by theTribunal stand vacated and the matter is remitted back to theAssessing Officer for a fresh consideration in accordance withlaw. The authorized representative of the assessee shall beafforded an opportunity to place all materials and decisionswhich they seek to rely upon. Consequently, the substantialquestions of law framed are left open. No costs. Sd/- Assistant Registrar(CS IX)//True Copy// Sub Assistant RegistrarhvkTo1. The Income Tax Appellate Tribunal, 'B' Bench, Chennai.2. The Additional Commissioner of Income Tax, Company Range-VI, Chennai – 34.3. The Commissioner of Income Tax (Appeals)-V, Chennai-34.4. The Assistant Commissioner of Income Tax, Company Range-VI(4), Chenna-34. +1cc to Mr.Subbaraya Aiyar, Advocate, S.R.No.8930.+1cc to Mr.J.Narayanasamy, Advocate, S.R.No.8627. TCA.No.258 of 2018SS(CO)CSR 31.03.2021