Principal Commissioner Of Income Taxno v. Cri Pumps Pvt Ltd

I IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 23.10.2024 CORAM THE HON'BLE MR.JUSTICE R.SURESH KUMARANDTHE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case Appeal No.406 of 2017 Principal Commissioner of Income TaxNo.63, Race Course Road, Coimbatore.....Appellant Vs. CRI Pumps Pvt Ltd 7/46-1 Keeranatham Road Saravanamatti, Coimbatore -35.PAN AAA CC 9497 N....Respondent ----- Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, 'D' Bench Chennai, dated 30/11/2016 in ITA.No.1012/Mds/2015. For Appellant : Mr.Karthik Ranganathan Senior Standing Counsel For Respondent : Mr.A.S.Sriraman J U D G M E N T (Delivered by R.SURESH KUMAR, J.) This Tax Case Appeal has been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, Chennai by raising the following substantial questions of law: 1 of 4 1. Whether on the facts and circumstances of the case, the ITAT is justified in allowing the royalty payment when the transfer of trade mark "CRI" was not allowed during the merger proceedings before the Hon'ble High Court and which was subsequently transferred from CRI Industries P Ltd., to CRI Amalgamations P Ltd through a family arrangement for a meager amount of Rs.1000/-?the ITAT is justified in allowing the royalty payment when the transfer of trade mark "CRI" was not allowed during the merger proceedings before the Hon'ble High Court and which was subsequently transferred from CRI Industries P Ltd., to CRI Amalgamations P Ltd through a family arrangement for a meager amount of Rs.1000/-? 2. Whether on the facts and circumstances of the case, the ITAT is justified in allowing the royalty payment, when the value of the CRI Trade Mark as fixed by the directors of the transferor company was low and the payment made to the holding company as royalty for using the trade mark was excessive and unreasonable having regard to the fair market value of the trade mark itself?the ITAT is justified in allowing the royalty payment, when the value of the CRI Trade Mark as fixed by the directors of the transferor company was low and the payment made to the holding company as royalty for using the trade mark was excessive and unreasonable having regard to the fair market value of the trade mark itself? 3. Whether on the facts and circumstances of the case, the Hon'ble ITAT is justified in not considering the Section 40A(2)(a) and that there is a violation of Section 40A(2)(b) of the Income Tax Act irrespective of the fact that the receipt has offered the same to tax?the Hon'ble ITAT is justified in not considering the Section 40A(2)(a) and that there is a violation of Section 40A(2)(b) of the Income Tax Act irrespective of the fact that the receipt has offered the same to tax? 2. It is brought to our notice by the learned Standing Counsel for the appellant Revenue that in the instant case, as per the CBDT's Circular No.9 of 2024 dated 17.09.2024 the tax effect is said to be less than the monetary limit 2 of 4 imposed and therefore, the appeal can be disposed of, keeping the substantial questions of law raised in this appeal open for adjudication at a later point of time. 3. Recording the aforesaid submission made by the learned Standing Counsel for the appellant Revenue, this Tax Case Appeal is dismissed for low tax effect, keeping open the substantial questions of law for adjudication at appropriate stage. No costs. NCS : Yes/NoKST (R.S.K.,J.) (C.S.N.,J.) 23.10.2024 To The Income Tax Appellate Tribunal'D' Bench, Chennai. 3 of 4 https://www.mhc.tn.gov.in/judis 4 of 4 T.C.A.No.406 of 2017 R.SURESH KUMAR, J.ANDC.SARAVANAN, J. KST T.C.A.No.406 of 2017 23.10.2024