Principal Commissioner Of Income Tax 3 v. M/S.indian Stitches Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 29.08.2019CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Principal Commissioner of Income Tax 3,No.63, Race Course Road,Coimbatore....Appellant/ Respondents -vs- M/s.Indian Stitches Pvt. Ltd.,24/64, Asher Nagar, 60 Feet Road,Gandhi Road, Tirupur-641 603.PAN: AABCI 1268C..Respondent/ Appellant Appeal under Section 260A of the Income-tax Act, 1961,againsttheorderdated29.06.2017,madeinI.T.A.No.1222/Mds/2015 on the file of the Income Tax AppellateTribunal 'A' Bench, Chennai for the assessment year 2009-10against the Order dated 25.02.2019 made in ITA No.547/2014-15on the file of the Commissioner of Income Tax (Appeals)-3,Coimbatore, and against the Order dated 05.12.2014 made in ITANo.1476/mds/2014, Income Tax Appellate Tribunal 'C' Bench,Chennai and against the Order dated 26.02.2014 made in ITANo.263/11-12,and the Commissioner of Income Tax Appeals -IICoimbatore and against the Order dated 31.12.2011 on the file ofthe Asst. Commissioner of Income Tax Company Circle, Tirupurmade in PA No/GIR No.AABC11286C for the Assessment Year 2009-10. JUDGMENT(Delivered by T.S.Sivagnanam, J.) This appeal filed by the Revenue under Section 260A of theIncome-tax Act, 1961 is directed against the order dated29.06.2017, made in I.T.A.No.1222/Mds/2015 on the file of the https://hcservices.ecourts.gov.in/hcservices/ Income Tax Appellate Tribunal 'A' Bench, Chennai for theassessment year 2009-10. 2.The appeal has been admitted on 06.02.2018, on thefollowing substantial questions of law:- “(i) Whether on the facts and in thecircumstances of the case, the Appellate Tribunalis correct in deleting the disallowance of forexderivative loss arising on account of loss onforex derivative transactions by treating it as atrading loss? (ii) Whether on the facts and in thecircumstances of the case, the Tribunal isjustified in law in holding that the loss onderivative transactions is trading loss therebyover viewing the fact that when no actual deliveryhas taken place, the transactions in question fallwithin the definition of speculative transactionas per section 43(5) of the Income Tax Act? And (iii) Whether on the facts and in thecircumstances of the case, the Tribunal isjustified in law in holding that the forexderivative transactions of the assessee haveproximity to the export turnover thereby impliedlyruling that the issue is covered by proviso (a) toSection 43(5), when the proviso clearly mandatesthat to be categorised as hedge, the transactionsshould only be in respect of goods or merchandisemanufactured or traded by the assessee?” 3.Heard Mr.T.R.Senthil Kumar, learned Senior Standing Counselassisted by Ms.K.G.Usharani, learned Standing Counsel for theappellant. 4.The learned Senior Standing Counsel for the appellantsubmits that the above appeal is not pursued by the Revenue onaccount of the low tax effect in terms of Circular No.17/2019,dated 08.08.2019 issued by the Central Board of Direct Taxes. Bythe said Circular, the monetary limit for filing or pursuing anappeal before the High Court has been increased to Rs.1 Crore.It is further submitted that the tax effect in this case is lessthan the threshold limit. 5.In the light of the said submissions, the above tax caseappeal is dismissed on account of the low tax effect. Thesubstantial questions of law framed are left open. In the eventthe tax effect is above the threshold limit fixed in the said https://hcservices.ecourts.gov.in/hcservices/ circular, liberty is granted to the Revenue to make a mention tothis Court to restore the appeal to be heard and decided onmerits. No costs. abr Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar 5.In the light of the said submissions, the above tax caseappeal is dismissed on account of the low tax effect. Thesubstantial questions of law framed are left open. In the eventthe tax effect is above the threshold limit fixed in the said https://hcservices.ecourts.gov.in/hcservices/ circular, liberty is granted to the Revenue to make a mention tothis Court to restore the appeal to be heard and decided onmerits. No costs. abr Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar To1.The Income Tax Appellate Tribunal 'A' Bench,Chennai. 2. The Income Tax Appellate Tribunal 'C' Bench, Chennai.3. The Commissioner of Income Tax (Appeals)-3, Coimbatore, 4.The Commissioner of Income Tax Appeals -II,Coimbatore 5.The Asst. Commissioner of Income Tax Company Circle, Tirupur+1cc to Mr.T.R.SenthilKumar, Advocate, SR.No.75119T.C.A.No.808 of 2017Kak(11/11/2019) https://hcservices.ecourts.gov.in/hcservices/