Tca/51/2014 Of Commissioner Of Income Tax v. M/S R.k.swamy Bdo[P]Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.08.2019 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.51 of 2014 Commissioner of Income Tax,Media Circle, Chennai-600 034... Appellant/Appellant-vs- M/s.R.K.Swamy BDO (P) Limited,Film Chamber Building,No.604, Anna Salai,Chennai-600 006.PAN: .. Respondent/Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 20.09.2013, made in I.T.A.No.1525/Mds/2013 onthe file of the Income Tax Appellate Tribunal 'A' Bench, Chennaifor the assessment year 2009-10 preferred against the order ofthe Commissioner of Income Tax (Appeals)VI Chennai dated25.03.2013 made in Appeal No. 294/2011-2012 filed against theAssessment order of this Joint Commissioner of Income Tax, MediaRange Circle II, Chennai dated 29.12.2011 for the Assessmentyear 2009-2010. For Appellant:Mr.M.Swaminathan,Senior Standing Counsel This appeal filed by the Revenue under Section 260A of theIncome-tax Act, 1961 is directed against the order dated20.09.2013, made in I.T.A.No.1525/Mds/2013 on the file of theIncome Tax Appellate Tribunal Bench 'A', Chennai for theassessment year 2009-10. https://hcservices.ecourts.gov.in/hcservices/ 2.The above appeal was admitted on 21.04.2014, on thefollowing substantial questions of law:- “(i) Whether on the facts and in thecircumstances of the case, the Hon'ble Income TaxAppellate Tribunal was right in law in holdingthat expenditure incurred by the assessee towardspayment of rent to its sister concern TIPL was notexcessive when compared to the payments made bysimilar entities and disallowance under theprovisions of Section 40A(2) are not warranted?(ii) Whether on the facts and in thecircumstances of the case, the Hon'ble Income TaxAppellate Tribunal was right in law in holdingthat disallowance of interest payment based on thediversion of interest free rental deposit to itssister concern is not warranted since there was nolink between the borrowal and payment of advanceto the concern?(iii) Whether on the facts and in thecircumstances of the case, the Appellate Tribunalwas right in deleting the interest free depositmade to its sister concern following the ApexCourt judgment in the case of S.A.Builders whichis referred to larger bench of the Apex Court forre-consideration? (iv) Whether on the facts and in thecircumstances of the case, the Hon'ble Income TaxAppellate Tribunal was right in law in holdingthat the assessee is eligible for 100%depreciation on the leasehold premises towards theexpenditure incurred in connection with falseroofing, wooden partition/cabin etc?” 3.Heard Mr.M.Swaminathan, learned Senior Standing Counselassisted by Ms.S.Premalatha, 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 appeal is 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 caseappeal is 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 appeal to be heard and decided onmerits. No costs. 5.In the light of the said submissions, the above tax caseappeal is 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 appeal to be heard and decided onmerits. No costs. s/d- Assistant Registrar(CS VIII) True Copy Sub-Assistant RegistrarabrTo1.The Assistant Registrar The Income Tax Appellate Tribunal 'A' Bench, Chennai.2.The Commissioner of Income Tax (Appeals)VI, Chennai3.The Joint Commissioner of Income TaxMedia Range Circle IIChennai+1 CC to Mr.M.Swaminathan, Advocate sr 73016.+1 CC to Mr.S.Sridhar, Advocate sr 72497. T.C.A.No.51 of 2014 RSI(CO)SP(18/11/2019) https://hcservices.ecourts.gov.in/hcservices/