The Commissioner Of Income Tax, Chennai v. M/S.sundaram Brake Linings Ltd.,Chennai-50

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 02.1.2019 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMAND THE HONOURABLE MR.JUSTICE N.SATHISH KUMAR TAX CASE APPEAL NO.678 OF 2014 The Commissioner of Income Tax, Chennai ...Appellant Vs M/s.Sundaram Brake Linings Ltd.,Chennai-50 ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961against the order dated 29.8.2013 in ITA No.2093/Mds/2012 on thefile of the Income Tax Appellate Tribunal Madras 'D' Bench forthe assessment year 2009-10. against the order of theCommissioner of Income Tax (Appeals)-V, Chennai made inITA.NO.367/2011-12 order dated 14.09.2012 and against the orderof the Assistant Commissioner of Income Tax, Company Circle VI(4) Chennai made in PAN/GIR.No. order dated 30.12.2011for the Assessment year 2009-10. For Appellant : Mr.T.R.Senthilkumar, SSC andMs.K.G.Usharani, JSCFor Respondent :M/s.Subbaraya Aiyer Padmanabhan ORDER Judgment was delivered by T.S.SIVAGNANAM,J Heard the learned Standing Counsel for the appellant. 2. This appeal by the Revenue challenges the order passed bythe Income Tax Appellate Tribunal, which decided the issue infavour of the assessee. The appeal was admitted on 27.10.2014 onthe following substantial questions of law : “i. Whether, under the facts and in the circumstances of thecase, the Tribunal was correct in deleting the disallowance madeby the Assessing Officer towards export commission paid by theassessee to the non resident, on which, it failed to deduct taxat source ? https://hcservices.ecourts.gov.in/hcservices/ ii. Whether, under the facts and in thecircumstances of the case, the Tribunal wascorrect in holding that the assessee has noliability to deduct tax at source on thepayment made to non resident towards exportcommission ? iii. Whether, under the facts and inthe circumstances of the case, the Tribunalwas correct in holding that the non residenthas no business connection for the exportcommission received from the assessee ? And iv. Whether, under the facts and in thecircumstances of the case, the Tribunal wascorrect in holding that the AssessingOfficer did not establish the existence ofbusiness connection and therefore, there isno liability to deduct tax at source withoutappreciating that the onus is on theassessee to show that it is not liable todeduct at source ?” 3. The Revenue seeks to withdraw this appeal on account oflow tax effect in terms of Circular No.3 of 2018 dated 11.7.2018issued by the Central Board of Direct Taxes. 4. In the light of the above, the appeal is dismissed aswithdrawn and the substantial questions of law framed are leftopen. In the event the tax effect is above the threshold limitfixed in the said circular under exceptional clauses mentionedin the circular, liberty is granted to the Revenue to make amention to this Court to restore the appeal to be heard anddecided on merits. No costs. Sd/- Assistant Registrar(CS V) RS Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Madras 'D' Bench. 2.The Commissioner of Income Tax (Appeals)-V,121, Mahatma Gandhi Road, Chennai-34.121, Mahatma Gandhi Road, Chennai-34. 3.The Assistant Commissioner of Income Tax,Company Circle VI(4), 7[th] Floor New Block,Room No.705, 121, Mahatma Gandhi Road,Chennai-34.Company Circle VI(4), 7[th] Floor New Block,Room No.705, 121, Mahatma Gandhi Road,Chennai-34. +1cc to Mr.T.R.Senthilkumar, Advocate, S.R.No.212 +1cc to M/s.Subbaraya Aiyer Padmanabhan, Advocate, S.R.No.220 TCA.No.678 of 2014 CP(CO)CS/19/02/2019