Tca/604/2014 Of The Commissioner Of Income Tax v. M/S Panasonic Home Appliances

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMand THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN The Commissioner of Income tax,Chennai. .. Appellant-vs- M/s.Panasonic Home Appliances India Company Limited,No.5, Sholavaram Village,Ponnery Taluk, Chennai-600 067... Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 06.01.2012, made in I.T.A.No.1467/Mds/2009 onthe file of the Income Tax Appellate Tribunal 'C' Bench, Chennaifor the assessment year 2004-05, against the order of the Commissioner of Income Tax(Appeals)-V, Chennai-34 dated 09/07/2008 and made in ITANo.598/06-07 for the Assessment Year 2004-2005, against the order of the Deputy Commissioner of Income Tax,Company Circle V (1), Chennai, dated 22.12.2006 and made inPAN/GIR No.AAACI1304E for the Assessment Year 2004-2005. This appeal filed by the Revenue under Section 260A of theIncome-tax Act, 1961 is directed against the order dated https://hcservices.ecourts.gov.in/hcservices/ 06.01.2012, made in I.T.A.No.1467/Mds/2009 on the file of theIncome Tax Appellate Tribunal 'C' Bench, Chennai for theassessment year 2004-05. 2.The appeal was admitted on 04.03.2015, on the followingsubstantial questions of law:- “(i) Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding that theroyalty payment at fixed percentage of the netinvoice value is to be treated as Revenueexpenditure? (ii) Is not the payment for royalty for use ofTechnical assistance which is intangible propertyacquired by the assessee under the head knowhowpaid to the foreign collaborators is a capitalexpenditure and depreciation under Section 32(ii)allowable at 25%? (iii) Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding that theentire royalty payment in respect of electric ricecookers is allowable as revenue expenditure?” 3.Heard Mr.T.Ravikumar, learned Senior Standing Counsel forthe appellant 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 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 event https://hcservices.ecourts.gov.in/hcservices/ the 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. Sd/- Assistant Registrar //True Copy// Sub Assistant RegistrarTo1.The Income Tax Appellate Tribunal 'C' Bench, Chennai.2.The Commissioner of Income Tax, Chennai.3.The Commissioner of Income Tax (Appeals)-V, Chennai-34.4.The Deputy Commissioner of Income Tax, Company Circle V(1), Chennai.+1cc to Mr.T.Ravikumar, Advocate Sr.72369T.C.A.No.604 of 2014sv[co]srg 19/11/2019