Principal Commissioner Of Income Tax 4 v. M/S. Mcc Finance Ltd., (Formerly Mercantile Credit Corporation Ltd.,)

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 06.03.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) Nos.77 to 79 of 2017 Principal Commissioner of Income Tax 4No.121, Mahatma Gandhi Road,Chennai 600 034. ... Appellant in all appealsVs.M/s. MCC Finance Ltd.,(Formerly Mercantile credit Corporation Ltd.,)No.21, 3[rd] Floor, Arhti Arcade,No.84, Dr. Radhakrishnan Road,Mylapore, Chennai 600 004....Respondent in all appeals----- Tax Case Appeals filed under Section 260A of the IncomeTax Act, 1961 against the order of the Income Tax AppellateTribunal 'C' Bench, Chennai dated 4.5.2016 in ITANos.911/Mds/2015,1597/Mds/2015and1598/Mds/2015respectively. Against the order of the commissioner of Income Tax(Appeals ) - IV, Chennai dated 30.10.2014 and made in ITA.Nos. 353, 354 and 355 /10-11 for the Assessment Yar 1994-95,1995-96 1996-97 respectively. Against the order of the Assistant Commissioner of IncomeTax Company circle IV (1), Chennai 34, Joint commissioner ofIncome Tax, Special Range VI, Chennai 34 dated 09.01.2009,29/03/2001 and 22.03.1999 and made in PAN/GIR.No. MC-2, PA.No.GI.No. 9-M PAN/GIR.No. 47-005-CQ-7766/9-M for the Assessmentyear 1994-95, 1995-96 1996-97 respectively. For Appellant : Mr.Karthik Ranganathan Senior Standing Counsel assisted by Mr.V.Rajesh, Jr. Standing counsel https://hcservices.ecourts.gov.in/hcservices/ [Judgment of the Court was delivered by DR.VINEET KOTHARI,J] These Tax Case Appeals have been filed by the Revenuecalling in question the correctness of the order passed by theIncome Tax Appellate Tribunal, 'C' Bench, Chennai, by raisingthe following substantial questions of law: "1. Whether, on the facts and in the circumstancesof the case and in law, Appellate Tribunal wasright in holding that no interest disallowanceunder section 36(1)(iii) could be made sinceassessee had surplus funds at its disposal? 2. Whether, on the facts and in the circustancesof the case and in law, Appellate Tribunal wascorrect and justified in deleting the disallowanceof interest when assessee NBFC engaged in financebusiness failed to prove the commercial expediencyin advancing interest free loan to employees ofMAC group or to Star Enterprises?” and in addition to the above questions of law, the followingquestions of law were also raised for consideration inrespect of TC.(A) No.79 of 2017. ' 1. Whether, on the facts and in thecircumstances of the case and in law, AppellateTribunal was right and justified in holding thatassessee is entitled to depreciation on assetswhich were retained by lessees even after expiryof lease period? 2. Whether, on the facts and in thecircumstances of the case and in law, Tribunalwas correct and justified in grantingdepreciation on assets which the assessee didnot put to use for any business purposes and waslying with the lessees after expiry of leaseperiod?' 2. When the matter was taken up for hearing, the learnedStanding Counsel brought to our notice the Circularinstruction issued by the Central Board of Direct Taxes videCircular No.17/2019 dated 8th August 2019, wherein, it isstipulated that appeals shall not be filed/pursued by theDepartment before the High Court in cases where the tax effectdoes not exceed Rs.1,00,00,000/- (Rupees One Crore) . 3. In the instant case, the tax effect is said to be lessthan the monetary limit imposed and therefore, the appealsfiled by the Revenue is dismissed as not pressed, keeping open https://hcservices.ecourts.gov.in/hcservices/ the substantial questions of law for determination in anappropriate case. Sd/-Assistant Registrar (CO MDU) //True Copy// Sub Assistant Registrar Msr 2. When the matter was taken up for hearing, the learnedStanding Counsel brought to our notice the Circularinstruction issued by the Central Board of Direct Taxes videCircular No.17/2019 dated 8th August 2019, wherein, it isstipulated that appeals shall not be filed/pursued by theDepartment before the High Court in cases where the tax effectdoes not exceed Rs.1,00,00,000/- (Rupees One Crore) . 3. In the instant case, the tax effect is said to be lessthan the monetary limit imposed and therefore, the appealsfiled by the Revenue is dismissed as not pressed, keeping open https://hcservices.ecourts.gov.in/hcservices/ the substantial questions of law for determination in anappropriate case. Sd/-Assistant Registrar (CO MDU) //True Copy// Sub Assistant Registrar Msr To1.Income Tax Appellate Tribunal 'C' Bench,Chennai.2. The Commissioner of Income Tax (Appeals-IV), Chennai.3.The Assistant Commissioner of Income Tax Company Circle IV (1), Chennai 34.4.The Joint Commissioner of Income Tax, Special Range VI , Chennai 34.Tax Case (Appeal) Nos.77 to 79 of 2017SV(CO)GN(25/06/2020)