Principal Commissioner Of Income Tax 4 v. M/S.mecaplast India P. Ltd.,P

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Principal Commissioner of Income Tax 4,No.121, Mahatma Gandhi Road,Chennai-600 034... Appellant inall Appeals -vs- M/s.Mecaplast India P. Ltd.,P-43, 8[th] Avenue, Mahindra World City,Chengleput Taluk, Kanchipuram District.PAN: AAE CM 2854 M.. Respondent in all Appeals Appeals under Section 260A of the Income-tax Act, 1961,against the common order dated 15.07.2016, made inI.T.A.Nos.6074, 6075 & 6076/Mds/2011 respectively on the file ofthe Income Tax Appellate Tribunal 'B' Bench, Chennai for theassessment years 2006-07, 2007-08 and 2008-09 respectivelyagainst the order dated 10.02.2010, 08.06.2010 and 25.04.2011made in Appeal Nos.CIT (A) 20/IX/9(2)I7-101/2009-10, 219/2009-10and 161/2010-11 respectives by the Commissioner of Income Tax(Appeals) – 20, Mumbai against the Assessment order dated18.11.2008, 30.09.2009 and 29.10.2010 respectively by theDepputy Commissioner of Income Tax – 9 (2), Mumbai. These appeals filed by the Revenue under Section 260A of theIncome-tax Act, 1961 are directed against the common order dated15.07.2016, made in I.T.A.Nos.6074, 6075 & 6076/Mds/2011 on the https://hcservices.ecourts.gov.in/hcservices/ file of the Income Tax Appellate Tribunal 'B' Bench, Chennai forthe assessment years 2006-07, 2007-08 and 2008-09 respectively. 2.The appeals have been filed raising the followingsubstantial questions of law:-“(i) Whether on the facts and circumstances ofthe case and in law, the ITAT was correct andjustified in holding that the assessee is eligiblefor the claim on revenue expenses and carryforward of losses to be set off against otherincome under the Income-tax Act, 1961, even thoughthe assessee had not yet set up business?(ii) Whether the ITAT was correct and justifiedin not appreciating the provisions of Section 3 ofthe I.T.Act, as per which, in respect of a newlyset up business from the date of setting up ofbusiness up to the end of the financial year.Since the assessee's business had not yet been setup, therefore, there was no previous year underthe head business income. Accordingly, there wasno question of computing business income/loss and,therefore, there was no question of allowing anyexpenses and whether as a result, the order underreference has turned perverse both on facts aswell as in law? and(iii) Whether the ITAT was correct andjustified in not following the decisions in thecase of Western India Vegetable Products Ltd. vs.CIT (1954) 26 ITR 151 (Bombay) and CWT vs.Ramaraju Surgical Cotton Mills Ltd. (1967) 63 ITR478 (SC)?” 3.Heard Mr.Karthik Ranganathan, learned Senior StandingCounsel assisted by Mr.S.Rajesh, learned Standing Counsel forthe appellant. 4.The learned Senior Standing Counsel for the appellantsubmits that the above appeals are 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 caseappeals are 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 saidcircular, liberty is granted to the Revenue to make a mention to https://hcservices.ecourts.gov.in/hcservices/ this Court to restore the appeals to be heard and decided onmerits. No costs. Consequently, connected miscellaneouspetitions are closed. Sd/-Assistant Registrar (CS-III)//True Copy// Sub Assistant Registrar abr 5.In the light of the said submissions, the above tax caseappeals are 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 saidcircular, liberty is granted to the Revenue to make a mention to https://hcservices.ecourts.gov.in/hcservices/ this Court to restore the appeals to be heard and decided onmerits. No costs. Consequently, connected miscellaneouspetitions are closed. Sd/-Assistant Registrar (CS-III)//True Copy// Sub Assistant Registrar abr To1.The Income Tax Appellate Tribunal 'B' Bench, Chennai.2.Principal Commissioner of Income Tax -4, 121, Mahatma Gandhi Road, Mumbai.3.The Commissioner of Income Tax (Appeals)-20, Mumbai.4.The Deputy Commissioner of Income Tax – 9 (2), Mumbai.T.C.A.Nos.800 to 802 of 2017GJ II(CO)GN(06/11/2019)