Principal Commissioner Of Income Tax 6 v. M/S.sri Krishna Tiles & Potteries Pvt. Ltd.,A

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :28.08.2019 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMANDTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN TAX CASE APPEAL NOS.442 TO 445 OF 2018AND C.M.P.NOS.9796 TO 9798 OF 2018IN T.C.A.NOS.443 TO 445 OF 2018 Principal Commissioner of Income Tax 6,No.121, Nungambakkam High Road,Chennai - 600 034. ...Appellant Vs M/s.Sri Krishna Tiles & Potteries Pvt. Ltd.,A-1, Kumara Vijayam Flats, Opp.Vidhya Mandir,99, R.H.Road, Mylapore, Chennai - 600 004.PAN: ...Respondent APPEALS under Section 260A of the Income Tax Act, 1961 againstthe common order dated 30.03.2017 made in ITA.Nos.2023 and2024/Mds/2016 and C.O.Nos.118 and 119/Mds/2016 on the file ofthe Income Tax Appellate Tribunal, Chennai 'C' Bench for theassessment years 2012-13 and 2011-12 and 2012-13 & 2011-12respectively against the order dated 09.03.2016 and 16.03.2016made in ITA.No.48/CIT(A)-15/14-15 and ITA.No.281/CIT(A)-15/14-15passed by the Commissioner of Income Tax (Appeals)-15, Chennai-600 034 and against the order dated 13.03.2015 and 28.03.2014passed by the Deputy Commissioner of Income Tax, Company CircleVI(2), Chennai for the Assessment year 2012-13 and the DeputyCommissioner of Income Tax, Company Circle VI(4) Chennai for theAssessment Year 2011-12 respectively. We have heard Mr.T.R.Senthilkumar, learned Senior StandingCounsel assisted by Ms.K.G.Usharani, learned Counsel appearingfor the appellant – Revenue. https://hcservices.ecourts.gov.in/hcservices/ 2.These appeals, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961, are directed against the common orderdated 30.03.2017 made in ITA.Nos.2023 and 2024/Mds/2016 andC.O.Nos.118 and 119/Mds/2016 on the file of the Income TaxAppellate Tribunal, Chennai 'C' Bench for the assessment years2012-13 and 2011-12. 3.The appeals have been filed by raising the followingsubstantial questions of law : “[for the Asst. year 2011-12 & 2012-13]1.Whether the Tribunal was right in remittingthe issue of investment made in sister concerns arenot liable for disallowance u/s.14A when theprovisions of the said section as well as Rule 8Ddoes not provide for any such exception?2.Whether the Tribunal was right in remittingthe disallowance u/s.14A holding that free funds inthe form of reserves and surplus held by theassessee is more than the investment made in assetsyielding exempt income, when the assessee wasmaintaining mixed bag of funds and failed tosubstantiate that such investment in assets yieldingexempt income are out of interest free funds?[for the Asst. Year 2011-12 only]3.Whether the Appellate Tribunal was right inremitting the issue to the Assessing Officer toverify the interest free loans given to sisterconcerns were out own funds or borrowed fundswithout considering the jurisdictional High Courtjudgment in the case of K.Somasundaram & Bros vs.CIT reported in 238 ITR 939 (Mds)?4.Whether the Appellate Tribunal was right infollowing Punjab & Haryana High Court judgment inthe case of CIT vs- Abhishek Industries Ltd. whichis explicitly over ruled by Hon'ble Supreme Court in298 ITR 298 in the case of Manjil SalesCorporation?" 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.17/2019dated 08.8.2019 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 the respectivecases is less than the threshold limit. 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.17/2019dated 08.8.2019 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 the respectivecases is less than 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 in the respective cases is above the thresholdlimit fixed in the said circular, liberty is granted to theRevenue to make a mention to this Court to restore the appealsto be heard and decided on merits. No costs. Consequently,connected miscellaneous petitions are closed. Sd/- Assistant Registrar(CCC) //True Copy// Sub Assistant Registrarcse To1. The Income Tax Appellate Tribunal, Chennai 'C' Bench.2.The Commissioner of Income Tax (Appeals)-15, Chennai-600 034.3.The Deputy Commissioner of Income Tax, Company Circle VI(2), Chennai.4. The Deputy Commissioner of Income Tax, Company Circle VI(4), Chennai.+1cc to Mr.T.R.Senthilkumar, Advocate, S.R.No.74188TCA.Nos.442 to 445 of 2018and C.M.P.Nos.9796 to 9798 of 2018in T.C.A.Nos.443 to 445 of 2018 SAI(CO)CS/31/10/2019