Tca/605/2014 Of The Commissioner Of Income Tax v. M/S Panasonic Home Appliances

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HON'BLE MR. JUSTICE M.DURAISWAMYAND THE HON'BLE MRS.JUSTICE R.HEMALATHA The Commissioner of Income Tax,Chennai. ... Appellant M/s. Panasonic Home Appliances India Company Limited,No.5, Sholavaram Village, Ponnery Taluk, Chennai – 600 067. ... Respondent Appeal preferred under Section 260A of the Income TaxAct, 1961, against the order of the Income Tax AppellateTribunal, Madras, "C" Bench, dated 06.01.2012 inITA.No.718/Mds/2010 for the Assessment Year 2005-2006. Againstthe order passed by the Commissioner of Income Tax (Appeals)-V, Chennai-34 dated 22.02.2010 made in ITA No.251/08-09 forthe Assessment Year 2005-06 against the Assessment orderpassed by the Deputy Commissioner of Income Tax, CompanyCircle V (1), Chennai-34, dated 19.12.2008 made in PANNo.AAAC11304F for the Assessment Year 2005-06. We have heard Mr.T.Ravikumar, learned Senior StandingCounsel for the appellant/Revenue and Mr. R. Venkatanarayanan,learned counsel for the respondent. 2.The appeal, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961 (for short, the Act) is directedagainst the order dated 06.01.2012 made in ITA.No.718/Mds/2010on the file of the Income Tax Appellate Tribunal, Chennai, "C"Bench (for brevity, the Tribunal) for the Assessment Yearhttps://hcservices.ecourts.gov.in/hcservices/2005-2006. 3. The appeal was admitted on the following substantialquestions of law :- “1.Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe royalty payment at fixed percentage of thenet invoice value is to be treated as Revenueexpenditure? 2. Is not the payment for royalty for useof Technical assistance which is intangibleproperty acquired by the assessee under thehead knowhow paid to the foreign collaboratorsis a capital expenditure and depreciation underSection 32(ii) allowable at 25%? 3. Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe entire royalty payment in respect ofelectric rice cookers is allowable as revenueexpenditure?”. 4. The learned Senior Standing Counsel appearing for theappellant submits that the above appeal is not pursued by theRevenue on 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 the taxeffect in this case is less than the threshold limit. 5. In the light of the said submissions, the above TaxCase Appeal is dismissed as withdrawn on account of the LowTax Effect. The substantial question of law framed is leftopen. In the event the tax effect in this case is above thethreshold limit fixed in the said Circular, liberty is grantedto the Revenue to make a mention to this Court to restore theappeal to be heard and decided on merits. No costs.Consequently, the connected Miscellaneous Petition is closed. Sd/- Assistant Registrar(CS II) //True Copy// Sub Assistant Registrar To 1. The Income Tax Appellate Tribunal, Chennai,"C" Bench Chennai,"C" Bench 2. The Commissioner of Income Tax (Appeals)V, Chennai-34 Chennai-34 3. The Deputy Commissioner of Income Tax, Company Circle V(1), Chennai-34 Company Circle V(1), Chennai-34 +1CC to Mr.T.Ravikumar, Advocate, Sr.No.29440 +1CC to M/s.Subbraya Aiyar, Advocate, Sr.No.29441 LN (CO)K.RK. (22.07.2021)