Tca/978/2019 Of Commissioner Of Income Tax v. M/S Sowswe Consultants Pvt Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE MR. JUSTICE P. VELMURUGAN T.C.A. No. 978 of 2019 Commissioner of Income Tax,Chennai...Appellant M/s. Sowswe Consultants Pvt. Ltd.,Chennai...Respondent Prayer:Appeal under Section 260A of the Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal, Madras'A' Bench, dated 25.10.2002 in ITA No. 667/Mds/97 and againstthe order of the Commissioner of Income Tax Appeals,Chennaidated 14.11.1996 made in IT/WT/GT/Appeal No.ITA.523/94-95 andagainst the order of the Assistant Commissioner of IncomeTax,Com.Cir IV(4), Mds-6 dated 10.02.1995 made in PAN/GIRNO.593-S for the Assessment Year 1992-93. (Judgment of the Court was delivered by N. KIRUBAKARAN,J.) This Tax Case Appeal has been preferred by the Revenueagainst the order dated 25.10.2002 passed in ITA.No.667/Mds/97on the file of the Income Tax Appellate Tribunal, Madras 'A'Bench for the assessment year 1992-93. 2.The respondent/assessee, a limited company, purchasedcertain computers under Hire Purchase Agreement from RajalakshmiFinancial Service Ltd. And New Century Leasing Ltd.. Theassessee transferred these computers to its concern within thegroup Mega Informatics and Institute Private Limited and received a sum of Rs.7,83,000/-. The terms of transfer was thatMega Informatics and Institute Private Limited will dischargethe outstanding hire purchase instalments which were to the tuneof Rs.4,95,581/-. The plea of the assessee was that the amountthat the assessee had received on account of the transfer wasRs.7,83,000/- and it was the only sale consideration.Therefore, the assessee, in its depreication computation, hadshown an amount of Rs. 7,83,000/- as sale consideration.However, the Assessing Officer, while completing the assessment,negatived the claim of the assessee and took into account thefull sale consideration of Rs.12,78,581/- for computingdepreciation. As against the same, the assessee preferred anappeal before the Commissioner of Income Tax (Appeals), whichcame to be dismissed confirming the order passed by theAssessing Officer. Aggrieved by the order of Commissioner ofIncome Tax (Appeals) dated 14.11.1996, the respondent/assesseepreferred an appeal before the Income Tax Appellate Tribunal,Madras 'A' Bench and the Tribunal, by order dated 25.10.2002upheld the claim of the assessee and allowed the appeal.Against the order of the Appellate Tribunal only, the presentappeal has been filed. 3.The appeal is admitted on the following substantialquestion of law : “Whether in the facts and circumstances of thecase, the Tribunal was right in law in holding thatthe value of the assets sold, would be exclusive ofthe value of the liabilities taken over by the buyer? 4.Mr.J.Narayanaswamy, learned Senior Standing Counselappearing on behalf of the appellant would submit that the taxeffect in this case is less than Rs.1 crore and is covered byCircular No.17/2019 dated 08.08.2019 issued by the Director,Central Board of Direct Taxes, Department of Revenue, Ministryof Finance, Government of India, Delhi. As per the saidcircular, the monetary limit to file an appeal before the HighCourt is fixed at Rs.1 crore. In this case, tax effect is lessthan Rs.1 crore and therefore, the case has to be dismissed. 5.This Court perused the circular dated 08.08.2019 andParagraph No.2 of the said Circular, which prescribes monetarylimit for filing appeal is usefully extracted as follows: 2.As a step towards further management of litigation,it has been decided by the Board that monetary limitsfor filing of appeals in income-tax cases be enhancedfurther through amendment in Para 3 of the Circularmentioned above and accordingly, the table formonetary limits specified in Para 3 of the Circularshall read as follows: 5.This Court perused the circular dated 08.08.2019 andParagraph No.2 of the said Circular, which prescribes monetarylimit for filing appeal is usefully extracted as follows: 2.As a step towards further management of litigation,it has been decided by the Board that monetary limitsfor filing of appeals in income-tax cases be enhancedfurther through amendment in Para 3 of the Circularmentioned above and accordingly, the table formonetary limits specified in Para 3 of the Circularshall read as follows: 6.In view of the submissions made by the learned SeniorStanding counsel appearing on behalf of the appellant and alsoin view of the Circular No.17/2019 dated 08.08.2019 issued bythe Director, Central Board of Direct Taxes, Delhi, the Tax CaseAppeal is dismissed on account of tax effect. However, thesubstantial question of law framed is left open. In the eventthe tax effect is above the limit fixed in the said circular,liberty is granted to the Revenue to make a mention to thisCourt to restore the appeal to be heard and decided on merits.No costs. Sd/- Assistant Registrar(CS) Sub Assistant Registrar nv To The Income Tax Appellate Tribunal,Madras 'A' Bench. 2.The Commissioner of Income tax ,Chennai 3.The Commissioner of Income Tax(Appeals),Chennai 4.The Assistant commissioner of Income Tax,Com.Cir(IV),4 Madras 6