The Commissioner Of Income Tax Chennai v. M/S.vishal Surgical Equipment Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 7.2.2020CORAMTHE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.178 of 2013 The Commissioner of Income Tax Chennai....Appellant/AppellantVs.M/s.Vishal Surgical Equipment Pvt. Ltd.,No.22, Wallers Road, Chennai 600 002....Respondent/Respondent Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order of the Income Tax AppellateTribunal, 'D' Bench, Chennai, dated 20.1.2012 made in ITANo.1095/Mds/2011, against the order of the Commissioner ofIncome Tax(A)-III, Chennai, dated 18/03/2011 made inITA.No.137/2008-2009/A-III and against the order of the DeputyCommissioner of Income Tax Company Circle III(4), Chennai, dated10.11.2008 made in GIR/PAN.No.475-V, Assessment year 2001-02.For Appellant : Ms.V.Pushpa Senior Standing Counsel For Respondent : Mr.R.SivaramanJ U D G M E N T(Delivered by DR.VINEET KOTHARI,J) This Tax Case Appeal has been filed by the Revenue, callingin question the correctness of the order passed by the IncomeTax Appellate Tribunal, 'D' Bench, Chennai, dated 20.1.2012 madein ITA No.1095/Mds/2011, by raising the following substantialquestions of law: "(i) Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in holding that the amount received ascompensation of Rs.61,39,160/- on account ofcancellation of agreement of sole distributorshipwould not liable to be taxed?(ii) Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in holding that compensation received inconnection with termination of sole distributorship https://hcservices.ecourts.gov.in/hcservices/ of the product of another company which amounts tocontract of agency is a capital receipt and iscontrary to the expressed provision contained inSection 28(ii)(c)?(iii) Is not the finding of the Tribunal badespecially when compensation received by theassessee on account of termination of agency istaxable as a revenue receipt under the head profitsand gains of business?" 2. When the matter is taken up for hearing, learned SeniorStanding Counsel brought to our notice the Circular instructionissued by the Central Board of Direct Taxes vide CircularNo.17/2019 dated 8th August 2019, wherein, it is stipulated thatappeals shall not be filed/pursued by the Department before theHigh Court in cases where the tax effect does not exceedRs.1,00,00,000/- (Rupees One Crore). 3. In the instant case, the tax effect is said to be lessthan the monetary limit imposed and therefore, the Appeal filedby the Revenue is dismissed, as withdrawn, keeping open thesubstantial questions of law for determination in appropriatecases. No costs. Sd/- Assistant Registrar/True Copy/ To Sub Assistant Registrar 1. The Commissioner of Income Tax, Chennai. 2. The Income Tax Appellate Tribunal, 'D' Bench, Chennai.3. The Deputy Commissioner of Income-tax, Company Circle III(4), Chennai.4. The Commissioner of Income Tax Appeals (III), Chennai. +1cc to Mr.M.Swaminathan, Advocate Sr.No.10167 AKM/17.03.20 /2P-6C/T.C.(A) No.178 of 2013