Principal Commissioner Of Income Tax 1 v. M/S.essilor Sankar & Co-Optics Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 19.12.2018 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MR.JUSTICE N.SATHISH KUMAR Tax Case (Appeal) Nos.684 and 685 of 2018and C.M.P.No.14250 of 2018 Principal Commissioner of Income Tax 1,No.63, Race Course Road,Coimbatore. ... Appellantin both the Appeals -vs- M/s.Essilor Sankar & Co-optics Pvt. Ltd.,321, A & B, Mettupalayam Road,Opp. Murugan Mill Road,Coimbatore - 641 043.PAN: AABCE 9781G ... Respondent in both the Appeals Tax Case (Appeals) filed under Section 260-A of theIncome Tax Act, 1961 against the order of the Income-taxAppellate Tribunal 'A' Bench, Chennai, dated 16.01.2018 inI.T.A.Nos.1511 and 1512/Mds/2017 for the assessment year 2013-14and 2014-15. Appeal against the order of the Income Tax, AppellateTribunal Madras A Bench, Dated 16/01/2018 in ITA.No.154/MDS/2017 Assessment Year 2013-2014 and the Income Tax AppealTribunal Madras A Bench, Dated 16/01/2018 in ITA.No.1512/MDS/2017 Assessment Year 2014-2015 against the Commissionerof Income Tax (Appeals)-1, Coimbatore dated 29/03/2017 Appn.No.163/16-17 PAN.No. Assessment Year 2014-2015 againstthe Commissioner of Income Tax(Appeals)-I, Coimbatore Date oforder 29/03/2017 Appn.No. 19/16-17 PAN.No. AssessmentYear 2013-2014 against Asst. Commissioner of Income TaxCorporate Circle – 2, Coimbatore PAN.No. AssessmentYear 2014-2014 against PAN.No. AABCE 9781G Assessment Year 2013-2014. https://hcservices.ecourts.gov.in/hcservices/ COMMON JUDGMENT(Judgment was delivered by T.S.Sivagnanam, J.) These appeals, by the appellant/Revenue, are directedagainst the order of the Income-tax Appellate Tribunal 'A'Bench, Chennai, dated 16.01.2018 in I.T.A.Nos.1511 and1512/Mds/2017 for the assessment year 2013-14 and 2014-15. 2.Heard Mr.T.R.Senthil Kumar, learned Senior StandingCounsel for the appellant/revenue. 3.The above appeals have been filed by theappellant/revenue by raising the following substantial questionsof law:- “1.Whether the Tribunal is correct inignoring the fact that the entire transactionunder is on slump sale basis and thus the conceptof amortization of the individual assets does notarise? 2.Whether the ITAT is justified whenExplanation 5 to Sec.32(1) inserted by the FinanceAct, 2001 with effect from 01.04.2002 whichclearly lays down that depreciation shall begranted whether or not the assessee claims thesame in computing his total income as per whichamortization claim of the assessee gets exhaustedin the Asst year 2012-13? 3.Whether the ITAT is correct in holding thatthe claim of amortization is made for the firsttime by the assessee in the Asst Year 2013-14without taking into cognizance the lettersubmitted by the assessee wherein it was clearlystated that the claims of amortization havealready been made by them for the Asst Years 2011-12 and 2012-13? 4.We have perused the order of assessment as well as theOrder passed by the Commissioner of Income Tax and we find thatthe tax effect in these appeals is lesser than the thresholdlimit mentioned in Circular No.3 of 2018, dated 11.07.2018,issued by the Central Board of Direct Taxes, which fixes themonetary limit as Rs.50,00,000/- for the Department to pursuethe matter. Furthermore, the Revenue has not been able to pointout any distinguishing features, by which the Circular No.3 of2018, dated 11.07.2018, cannot be applied. 5.Thus, for the above reasons, the Revenue cannot pursuethese appeals in view of the low tax effect. Hence, the appealsare dismissed and the substantial questions of law, framed for https://hcservices.ecourts.gov.in/hcservices/ 4.We have perused the order of assessment as well as theOrder passed by the Commissioner of Income Tax and we find thatthe tax effect in these appeals is lesser than the thresholdlimit mentioned in Circular No.3 of 2018, dated 11.07.2018,issued by the Central Board of Direct Taxes, which fixes themonetary limit as Rs.50,00,000/- for the Department to pursuethe matter. Furthermore, the Revenue has not been able to pointout any distinguishing features, by which the Circular No.3 of2018, dated 11.07.2018, cannot be applied. 5.Thus, for the above reasons, the Revenue cannot pursuethese appeals in view of the low tax effect. Hence, the appealsare dismissed and the substantial questions of law, framed for https://hcservices.ecourts.gov.in/hcservices/ consideration, are left open. The Revenue is at liberty to seekfor restoration of appeals if at a later point of time, it isfound that the tax effect is above the threshold limit or tofall under the exceptional clauses mentioned in the Circular.No costs. Consequently, connected miscellaneous petition isclosed. Sd/- Assistant Registrar(CS-VI) //True Copy// Sub Assistant RegistrarcseTo1.The Income-tax Appellate Tribunal 'A' Bench, Chennai.2.The Commissioner of Income Tax (Appeals)-1, Coimbatore.3.The Assistant Commissioner of Income Tax, Corporate circle – 2, Coimbatore.4.The Deputy Commissioner of Income Tax, Corporate Circle – 2, Coimbatore.+1cc to Mr.T.R.Senthil Kumar, Advocate, S.R.No. 88711T.C.(A) Nos.684 and 685 of 2018VSNII(CO)GN(23/01/2019)