Tca/410/2013 Of Commissionerof Income Tax v. M/S Rane Engine Valves Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22.08.2019 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.410 of 2013 Commissioner of Income-tax,Chennai... Appellant/Appellant-vs- M/s.Rane Engine Valves Ltd.,Maithri,132, Cathedral Road, Chennai-600 086.PAN: .. Respondent/Respondent Appeal under Section 260A of the Income-tax Act, 1961,against the order dated 21.08.2012, on the file of theIncome-tax Appellate Tribunal 'C' Bench, Chennai, inI.T.A.No.1082/Mds/2012 for the assessment year 2004-05appeal against the order of the Income Tax Appeals TribunalMadras C Bench dated 21.08.2012 in ITA.NO.1082/MDS/2012Assessment Year 2004-2005/ PAN AAACT/1279 M Against theCommissioner of Income Tax Appeals,Large Tax Payer Unit ,chennai 101 in ITA.NO.28/2010-2011/LTU(A) DATED 24.02.2012Against the order of the Assistant Commissioner of IncomeTax Company Circle V(3), chennai 34 in AAA CE 1413 G dated04.02.2009. For Appellant:Mr.T.Ravi Kumar,Senior Standing Counsel & : Ms.R.Hemalatha,Senior Standing CounselFor Respondent :Mr.Mr.R.Venkatanarayana,:for M/s.Subbaraya Aiyar,Padmanabhan & Ramamani****** (Delivered by T.S.Sivagnanam, J.) This appeal filed by the appellant/Revenue under Section260A of the Income-tax Act, 1961, is directed against theorder dated 21.08.2012, passed by the Income-tax AppellateTribunal 'C' Bench, Chennai, in I.T.A.No.1082/Mds/2012 forthe assessment year 2004-05. 2.The above appeal was admitted on the followingsubstantial questions of law, vide order dated 02.09.2013:-“(i) Whether on the facts andcircumstances of the case the Tribunal wasright in holding that the assessee iseligible for benefit of deduction underSection 32 A though the assessee hadtransferred the Investment Allowance reserveto General Reserve? (ii) Whether on the facts andcircumstances of the case, the Tribunal wasright in holding that the assessee hadutilized the reserve for the purchase ofplant and machinery and therefore there is nofurther requirement of continuing with thereserve? (iii) Whether on the facts andcircumstances of the case, the Tribunal wasright in holding that once the assesseepurchases sufficient machinery to the extentof credit in the investment allowancereserve, the assessee should be deemed tohave utilized the reserve for purchase ofmachinery and hence satisfied the conditionsfor deduction under Section 32A? (iv) Whether the Tribunal was right inholding that the investment allowance reservehas been utilized for purchase of machinery,though the balance in the reserve was notadjusted against the cost of machinerypurchased?” 3.Heard Mr.T.Ravi Kumar and Ms.R.Hemalatha, learnedSenior Standing Counsel for the appellant andMr.R.Venkatanarayana, learned counsel, for M/s.SubbarayaAiyar, Padmanabhan & Ramamani, for the respondent. 4. The learned Senior Standing Counsel for the appellantsubmits that the above appeal is not pursued by the Revenueon account of the low tax effect in terms of CircularNo.17/2019, dated 08.08.2019 issued by the Central Board ofDirect Taxes. By the said Circular, the monetary limit forfiling or pursuing an appeal before the High Court has beenincreased to Rs.1 Crore. It is further submitted that thetax effect in this case is less than the threshold limit. 5. In the light of the said submissions, the above taxcase appeal is dismissed on account of the low tax effect.The substantial questions of law framed are left open. Inthe event the tax effect is above the threshold limit fixedin the said circular, liberty is granted to the Revenue tomake a mention to this Court to restore the appeal to beheard and decided on merits. No costs. 5. In the light of the said submissions, the above taxcase appeal is dismissed on account of the low tax effect.The substantial questions of law framed are left open. Inthe event the tax effect is above the threshold limit fixedin the said circular, liberty is granted to the Revenue tomake a mention to this Court to restore the appeal to beheard and decided on merits. No costs. Sd/- Assistant Registrar(CS) //True Copy// Sub Assistant RegistrarabrTo1.The Assistant Commissioner of Income-tax, Company Circle V(3), Chennai.2.The Commissioner of Income-tax (Appeals), Large Taxpayer Unit, II Floor, 1775, Jawaharlal Nehru Inner Ring Road, Anna Nagar Western Extension, Chennai-600 101. 3.The Income-tax Appellate Tribunal 'C' Bench, Chennai. +1cc to Mr.T.Ravi Kumar , Advocate71820 SR.No. 71820+1cc to M/s.Subbaraya Aiyar, Advocate SR.No. 72376T.C.A.No.410 of 2013A.SK(15/11/2019)