Tca/338/2017 Of Commissioner Of Income Tax v. Tafe Motors & Tractors Limited

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 29.08.2019 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal Nos.338 and 339 of 2017 Commissioner of Income Tax,Corporate Circle-3, Chennai... Appellant in both Appeals-vs- M/s.TAFE Motors & Tractors Limited,No.35, Pottipatti Plaza,Nungambakkam High Road,Chennai-600 034.PAN: AACCT 2459 B.. Respondent in both Appeals Appeals under Section 260A of the Income-tax Act, 1961,against the common order dated 23.11.2016, made inI.T.A.Nos.2107 & 2108/Mds/2016 on the file of the Income TaxAppellate Tribunal 'C' Bench, Chennai for the assessment years2011-12 and 2012-13 respectively. Against the Order dated 17/03/2016 made in ITA.Nos.210/14-15& 125/15-16 CIT(A)-11 on the file of the Commissioner of IncomeTax (Appeals) – II, Chennai for the assessment year 2011-2012 &2012-13. Against the order dated 26/03/2014 & 27/03/2015 made in PANGIR.No. AACCT 2459B on the file of the Assessment Counsel ofIncome Tax Company Circle III (1), Chennai for the assessmentYear 2011-12 and 2012-13. Mr.R.Venkatanarayana,For M/s.Subbaraya AiyarPadmanabhan & Ramamani COMMON JUDGMENT (Delivered by T.S.Sivagnanam, J.) These appeals filed by the Revenue under Section 260A of theIncome-tax Act, 1961 are directed against the common order dated23.11.2016, made in I.T.A.Nos.2107 & 2108/Mds/2016 on the fileof the Income Tax Appellate Tribunal 'C' Bench, Chennai for theassessment years 2011-12 and 2012-13 respectively. 2.The appeals have been admitted on 01.08.2017, on thefollowing substantial questions of law:- “(i) Whether the Tribunal was justified inholding that the investment made in sisterconcern/subsidiary companies are not liable fordisallowance under Section 14A of the Income TaxAct when the provisions of the said Section aswell as Rule 8D do not provide for any suchexception? (ii) Whether the investment in shares ofsubsidiary companies which also yields dividendincome attracts the provisions of Section 14A ofthe Income Tax Act and is exempt from Income Tax?” 3.Heard Mr.M.Swaminathan, learned Senior Standing Counselassisted by Ms.V.Pushpa, learned Standing Counsel for theappellant – and Mr.R.Venkatanarayana, learned counsel, forM/s.Subbaraya Aiyar, Padmanabhan & Ramamani, for the respondent. 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 tothis Court to restore the appeals to be heard and decided onmerits. No costs. Sd/- Assistant Registrar (CCC) //True Copy// Sub Assistant Registrar (abr) To 1.The Income Tax Appellate Tribunal 'C' Bench, Chennai. Chennai. 2.The Commissioner of Income Tax (Appeals)- II, Chennai. Chennai. 3.The Assistant Commissioner of Income Tax, Company Circle II, (1), Chennai. +1cc to Mr.M.Swaminathan, Advocate, S.R.No.75044 +1cc to Mr.Subbaraya Aiyar, Advocate, S.R.No. 75140 T.C.A.Nos.338 and 339 of 2017 RSV(CO)GN(08/11/2019)