Tca/50/2017 Of Commissioner Of Income Tax v. M/S.textures & Weaves (India)

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 29.08.2019 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal Nos.50 and 51 of 2017 Commissioner of Income Tax,Company Circle-III(2), Chennai... Appellant in both Appeals-vs- M/s.Textures & Weaves (India) Private Limited, No.6/1, Silambu Stret,Padmanabha Nagar, Choolaimedu,Chennai-600 094.PAN: AALCS 1660 E .. Respondent/Appellant Appeals under Section 260A of the Income-tax Act, 1961,against the common order dated 01.07.2016, made inI.T.A.Nos.2417 & 2416/Mds/2014 on the file of the Income TaxAppellate Tribunal 'C' Bench, Chennai for the assessment years2010-11 and 2009-10 respectively against the order of thecommissioner of Income Tax (Appeals)-III, Chennai-34 inITA.No.1455 and 1894/2013-14 dated 07/07/2014 against the orderof the Assistant Commissioner of Income Tax, Company Circle-III(2), chennai-34 for the Assessment year 2009-2010 and 2010-2011. For Respondent :Mr.A.S.Sriraman for Mr.S.Sridhar(In both Appeals) These appeals filed by the Revenue under Section 260A of theIncome-tax Act, 1961 are directed against the common order dated01.07.2016, made in I.T.A.Nos.2417 & 2416/Mds/2014 on the fileof the Income Tax Appellate Tribunal 'C' Bench, Chennai for theassessment years 2010-11 and 2009-10 respectively. 1/3 https://hcservices.ecourts.gov.in/hcservices/ 2.The appeals have been filed raising the followingsubstantial questions of law:-“(i) Whether on the facts and circumstances ofthe case and in law, Tribunal was right andjustified in deleting the addition made u/s 40(a)(i) stating that providing fashion forecast andlatest trends in fashion periodically so as tofacilitate new merchandises cannot be consideredas technical services u/s 9(i)(vii) as well asArt. 12 of Indo -US DTAA? and (ii) Whether on the facts and circumstances ofthe case and in law, Tribunal was correct andjustified in holding that the non-resident companydid not render technical services though suchservices can be rendered only by specialists andskilled in garment and the consideration wastermed as royalty in the agreement tax at sourceu/s 195 on such payments for similar services?” 3.Heard Mr.M.Swaminathan, learned Senior Standing Counselassisted by Ms.V.Pushpa, learned Standing Counsel for theappellant – and Mr.A.S.Sriraman, learned counsel forMr.S.Sridhar, learned Counsel 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/- Asst.Registrar (CS III ) https://hcservices.ecourts.gov.in/hcservices/ To 1.The Income Tax Appellate Tribunal 'C' Bench, Chennai. 2.The Commissioner of Income Tax (Appeals)-III,Chennai-34Chennai-34 3.The Assistant Commissioner of Income Tax CompanyCircle III(2), Chennai-34Circle III(2), Chennai-34 +1 cc to Mr.S.Sridhar Advocate sr75277 +1 cc to Mr.M.Swaminathan Advocate sr 75039 T.C.A.Nos.50 and 51 of 2017 rk(co)aa11/11/2019 3/3