The Commissioner Of Income Tax, Chennai v. M/S.cholayil Pharmaceuticals P. Ltd

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.258 and 259 of 2015 The Commissioner of Income Tax,Chennai....AppellantVs M/s.Cholayil Pharmaceuticals P. Ltd.,1583, J Block, 15th Main Road,Anna Nagar, Chennai - 600 040....Respondent APPEALS under Section 260A of the Income Tax Act, 1961against the common order dated 18.11.2011 made in ITA.Nos.1304and 1305/Mds/2011 on the file of the Income Tax AppellateTribunal, Chennai 'B' Bench for the assessment year 2004-05 and2005-06. against the order of the Commissioner of Income Tax (Appeals) –III, Chennai order dated 08-04-2011 made in ITA.Nos.798/06-07/A-III & 420/07-08/A-III for the Assessment Years 2004-05 to 2005-06 respectively and against the Order of Assistant Commissionerof Income Tax Company Circle I (3), Chennai order dated12/12/2006 & 05/12/2007 made in GI/PAN.No. .For Appellant:Mr.T.Ravikumar, SSCFor Respondent:Ms.J.Sreevidhya COMMON JUDGMENT (Judgment was delivered by T.S.Sivagnanam,J) We have heard Mr.T.Ravikumar, learned Senior Standing Counselappearing for the appellant – Revenue and Ms.J.Sreevidhya,learned counsel appearing for the respondent - assessee. 2.These appeals, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961, are directed against the common orderdated 18.11.2011 made in ITA.Nos.1304 and 1305/Mds/2011 on thefile of the Income Tax Appellate Tribunal, Chennai 'B' Bench forthe assessment year 2004-05 and 2005-06. https://hcservices.ecourts.gov.in/hcservices/ 3.The appeals were admitted on 16.06.2015 on the followingsubstantial questions of law : “1.Whether on the facts and circumstances of thecase, the Income Tax Appellate Tribunal was right inholding that the disallowance made under Section 36(1)(iii) on account of interest on borrowed moneywhich was advanced to sister concern P&N Foods Pvt.Ltd., amounting to Rs.38,56,802/- for the assessmentyear 2005-06 was to be allowed?2.Whether the finding of the Tribunal is properby deleting the addition made under Section 36(1)(iii) on account of interest on borrowed fundadvanced to sister concern especially when theassessee business is not money lending business or afinancial institution which lends money for others?" 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.17/2019dated 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 the respectivecases is less than 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 in the respective cases is above the thresholdlimit fixed in the said circular, liberty is granted to theRevenue to make a mention to this Court to restore the appealsto be heard and decided on merits. No costs. Sd/-Assistant Registrar (CS-III) //True Copy// cse To Sub Assistant Registrar 1.The Income Tax Appellate Tribunal, Chennai 'B' Bench. 2.The Commissioner of Income Tax (Appeals) – III, Chennai. Chennai. 3.The Assistant Commissioner of Income Tax Company Circle I (3),Income Tax Company Circle I (3), Chennai. 4.The Commissioner of Income Tax, Chennai. Chennai. +1cc to Mr.T.Ravikumar, Advocate, S.R.No. 73322 +1cc to Mr.J.Sreevidya, Advocate, S.R.No. 73632 TCA.Nos.258 and 259 of 2015 CP(CO)GN(06/11/2019)