Tca/834/2014 Of The Commissioner Of Income Tax v. M/S.best&Crompton Engineering

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 26.08.2019 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal Nos.834 and 835 of 2014 The Commissioner of Income tax,Chennai... Appellant in both Appeals-vs- M/s.Best & Crompton Engineering Ltd.,39, Industrial Estate,Ambattur, Chennai-600 098... Respondent in both Appeals APPEALS under Section 260A of the Income Tax Act, 1961against the common order dated 03.05.2012, made inI.T.A.Nos.1673 & 1674/Mds/2008 on the file of the Income TaxAppellate Tribunal 'D' Bench, Chennai for the assessment years2003-04 and 2004-05 respectively against the Order dated27.05.2008 made in ITA No.80 & 81/2007-08 on the file of theCommissioner of Income Tax (Appeals)-VIII, Chennai -34, andagainst Common Order dated 21.12.2006 and 23.03.2006 on the fileof the Assistant Commissioner of Income Tax, Company Circle-I(3) 1(2), Chennai made in PAN No.AAACB 2753H for the AssessmentYear 2004-05 & 2003 & 04. These appeals filed by the Revenue under Section 260A of theIncome-tax Act, 1961 are directed against the common order dated03.05.2012, made in I.T.A.Nos.1673 & 1674/Mds/2008 on the fileof the Income Tax Appellate Tribunal 'D' Bench, Chennai for theassessment years 2003-04 and 2004-05 respectively. 2.The above appeals were admitted on 10.11.2014, on thefollowing substantial questions of law:-“T.C.A.No.834 of 2014:- “Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in holding that the interest disallowance on https://hcservices.ecourts.gov.in/hcservices/ the borrowed funds diverted to its sister concernis to be allowed even though the interestexpenditure was not incurred wholly andexclusively for the purpose of assessee'sbusiness?” T.C.A.No.835 of 2014:-(i) Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding that theinterest disallowance on the borrowed fundsdiverted to its sister concern is to be allowedeven though the interest expenditure was notincurred wholly and exclusively for the purpose ofassessee's business? (ii) Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding that thewrite off of loans advanced to subsidiary is to beallowed?” 3.Heard Mr.T.Ravikumar, learned Senior Standing Counsel forthe appellant - and Mr.Karthik Seshadri, learned counsel forM/s.Iyer & Thomas, 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.abr Sd/- Assistant Registrar(CS VIII) //True Copy// Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal 'D' Bench, Chennai. 2. The Commissioner of Income Tax (Appeals)-VIII, Chennai -34, 3. The Assistant Commissioner of Income Tax, Company Circle-I (3) 1(2), Chennai Chennai +1cc to Mr.H.Karthik Seshadri, Advocate, SR.No.73099 +1cc to Mr.T.Ravi Kumar, Advocate, SR.No.72363 T.C.A.Nos.834 and 835 of 2014Kak(31/10/2019)