The Commissioner Of Income Tax, Chennai v. M/S.avalon Technologies P. Ltd., Tpi Block, B

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 27.08.2019 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMANDTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal Nos.373 and 376 of 2015 The Commissioner of Income Tax,Chennai. ...Appellantin both casesVs M/s.Avalon Technologies P. Ltd.,TPI Block, B-7, First Main Road,MEPZ-SEZ, Tambaram, Chennai - 600 045.PAN: ...Respondentin both cases APPEALS under Section 260A of the Income Tax Act, 1961against the common order dated 31.10.2014 made inITA.Nos.2267 and 2270/Mds/2013 on the file of the IncomeTax Appellate Tribunal, Chennai 'A' Bench for theassessment years 2005-06 and 2008-09 against the orderdated 30.09.2013 made in ITA.NO.318/5321/13-14 on the fileof the Commissioner of Income Tax (A)(C), Chennai. Againsttheordertheorderdated12.12.2008,25.11.2009,02.10.2010, and 23.12.2011 made inPAN/GIR: AACCA4147K /AX6-178 on the file of the DeputyCommissioner of Income Tax Company Circle(1), chennai forthe Assessment Year 2005-2006 to 2008-09. For Appellant:Mr.T.Ravikumar, SSC assisted byMs.R.Hemalatha, SSCFor Respondent:No appearanceCOMMON JUDGMENT(Judgment was delivered by T.S.Sivagnanam,J) We have heard Mr.T.Ravikumar, learned Senior StandingCounsel assisted by Ms.R.Hemalatha, learned StandingCounsel appearing for the appellant – Revenue. https://hcservices.ecourts.gov.in/hcservices/ 2.These appeals, filed by the Revenue under Section 260Aof the Income Tax Act, 1961, are directed against thecommon order dated 31.10.2014 made in ITA.Nos.2267 and2270/Mds/2013 on the file of the Income Tax AppellateTribunal, Chennai 'A' Bench for the assessment years 2005-06 and 2008-09. 3.The appeals were admitted on 22.07.2015 on thefollowing substantial questions of law :“i) Whether on the facts and in thecircumstances of the case, the AppellateTribunal was right in directing the AssessingOfficer to recompute the income in the light ofthe decision of the Special Bench in the case ofSak Soft by excluding the freight and insuranceexpenses both from the Export turnover and alsofrom the total turnover while computingdeduction under Section 10A of the Income TaxAct? ii) Is not the finding of the Tribunal bad,especially when Explanation 2(iv) to Section 10Adefines the word "Export Turnover" whereby ithad been clearly stated that it would notinclude freight, telecommunication chargesattributable to the delivery of the articles orthings or computer software outside India orexpenses if any incurred in foreign exchangewhile computing deduction under Section 10A ofthe Income Tax Act? iii) Whether on the facts and in thecircumstances of the case, the Tribunal wasright in holding that for the purpose ofapplying the formula under Section 10B, thefreight, telecommunications charges, which arerequired to be excluded from export turnover asdefined under Explanation 2(iii) of Section 10Bof the Act should also be excluded from totalturnover even though the statute has providedfor such exclusion only from the exportturnover?" 4.The learned Senior Standing Counsel for the appellantsubmits that the above appeals are not pursued by the https://hcservices.ecourts.gov.in/hcservices/ Revenue on account of the low tax effect in terms ofCircular No.17/2019 dated 08.8.2019 issued by the CentralBoard of Direct Taxes. By the said Circular, the monetarylimit for filing or pursuing an appeal before the HighCourt has been increased to Rs.1 Crore. It is furthersubmitted that the tax effect in the respective cases isless than the threshold limit. 4.The learned Senior Standing Counsel for the appellantsubmits that the above appeals are not pursued by the https://hcservices.ecourts.gov.in/hcservices/ Revenue on account of the low tax effect in terms ofCircular No.17/2019 dated 08.8.2019 issued by the CentralBoard of Direct Taxes. By the said Circular, the monetarylimit for filing or pursuing an appeal before the HighCourt has been increased to Rs.1 Crore. It is furthersubmitted that the tax effect in the respective cases isless than the threshold limit. 5. In the light of the said submissions, the above taxcase appeals are dismissed on account of the low taxeffect. The substantial questions of law framed are leftopen. In the event the tax effect in the respective casesis above the threshold limit fixed in the said circular,liberty is granted to the Revenue to make a mention to thisCourt to restore the appeals to be heard and decided onmerits. No costs. Sd/- Assistant Registrar(CS) //True Copy// Sub Assistant Registrarcse To1.THE INCOME TAX APPELLATE TRIBUNAL, CHENNAI 'A' BENCH.2.THE COMMISSIONER OF INCOME TAX (A)(C)-II, CHENNAI.3.THE DEPUTY COMMISSIONER OF INCOME TAX COMPANY CIRCLE(1),CHENNAI +1cc to Mr.T.Ravikumar , Advocate SR.No. 73327TCA.Nos.373 and 376 of 2015rsvA.SK(20/11/2019)