The Commissioner Of Income Tax, Chennai v. M/S.arun Excello Homes Pvt. Ltd

In the High Court of Judicature at Madras Dated : 28.08.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAMandThe Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.437 of 2018 The Commissioner of Income Tax,Chennai. ...Appellant/AppellantVs. M/s.Arun Excello Homes Pvt. Ltd.,18, Bhattanad Towers, West Cott Road,Royapettah, Chennai - 600 014.PAN: ...Respondent/Respondent Prayer: APPEAL under Section 260A of the Income Tax Act, 1961against the order dated 06.12.2017 made in ITA.No.937/MDS/2017on the file of the Income Tax Appellate Tribunal, Chennai 'B'Bench for the assessment year 2013-14and against the order ofthe Commissioner of Income Tax (Appeals) I, Chennai dated10.02.2017 made in I.T.A. 27/CIT(A)-1/2016-2017, for theAssessment year 2013-2014 and against the order of the Deputy Commissioner of Income Tax Corporate Circle -1(1) Chennai dated31.03.2016, made in GIR/PAN Ax-7250 for theAssessment year 2012-2013. For Appellant : Mr.T.Ravikumar, SSC and Ms.R.Hemalatha, SSC For Respondent: Mr.R.Sivaraman JUDGMENT(Judgment was delivered by T.S.Sivagnanam,J.) We have heard Mr.T.Ravikumar, learned Senior StandingCounsel, and Ms.R.Hemalatha, learned Senior Standing Counselappearing for the appellant/revenue and Mr.R.Sivaraman, learnedcounsel appearing for the respondent/assessee. 2.This appeal, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961 is directed against the order dated06.12.2017 made in ITA.No.937/MDS/2017 on the file of the IncomeTax Appellate Tribunal, Chennai 'B' Bench for the assessmentyear 2013-14. https://hcservices.ecourts.gov.in/hcservices/ 3.The appeal was admitted on 10.08.2018 on the followingsubstantial questions of law : “1.Whether the payments made to non-residentcompany over and above the investments madepartakes the character of interest receiptrequiring Tax deduction under Section 195 of theI.T. Act and failure to deduct TDS would attractdisallowance u/s.40(a)(i) of the I.T. Act? 2.Whether the Tribunal was right in deletingthe disallowance made u/s.40(a)(i) on the paymentsmade to the non-resident company without deductionof tax at source, without appreciating the factthat the payment made to non-resident company isnothing but interest payment paid under the guiseof discount on Optionally Convertible Debentureswhich are liable for Tax deduction under Section195 of the I.T. Act?" 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.17/2019dated 08.8.2019 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. -s/d- Assistant Registrar(CS-I) True Copy Sub-Assistant Registrar cse https://hcservices.ecourts.gov.in/hcservices/ To 1.The Income Tax Appellate Tribunal, Chennai 'B' Bench. 2.The Commissioner of Income Tax (Appeals)I, Chennai 3.The Deputy Commissioner of Income Tax, Corporate Circle-1(1),Chennai. Chennai. TCA.No.437 of 2018 MR(CO)SP(05/11/2019)