The Commissioner Of Income Tax, Chennai v. Shri S.k.sabhapathy

In the High Court of Judicature at Madras The Honourable Mr.Justice T.S.SIVAGNANAMand The Honourable Mr.Justice N.SATHISH KUMAR Tax Case Appeal No.862 of 2013 The Commissioner of Income Tax, Chennai ...Appellant VsShri S.K.Sabhapathy...Respondent APPEAL under Section 260A of the Income Tax Act, 1961against the order dated 19.7.2013 in ITA No.485/Mds/2013 on thefile of the Income Tax Appellate Tribunal Madras 'B' Bench forthe assessment year 2009-10 and against the Order of theCommissioner of Income Tax (Appeals) – IX, Chennai-34, dated28/12/2012 passed in ITA.No. 226/11-12 against the Order of theDeputy Commissioner of Income Tax, Circle – I, Vellore, dated23/12/2011 passed in PAN/GIR.No. /11973-S AssessmentYear 2009-2010. For Appellant : Mr.M.Swaminathan, SSC, Ms.V.Pushpa, JSCand Ms.S.Premalatha, JSCJudgment was delivered by T.S.SIVAGNANAM,J Heard the learned Senior Standing Counsel for the appellant.2. This appeal by the Revenue challenges the order passedby the Income Tax Appellate Tribunal, which decided the issue infavour of the assessee. The appeal was admitted on 07.3.2014 onthe following substantial questions of law : “i. Whether, under the facts andcircumstances of the case, the Income Tax (2)Appellate Tribunal was correct in holdingthat the disallowance under Section 14A readwith Rule 8D (2)(ii) cannot be made sincethe investments, yielding exempt income,have been made out of non interest bearingfunds ?ii. Whether, under the facts andcircumstances of the case, the Income TaxAppellate Tribunal was correct in holding https://hcservices.ecourts.gov.in/hcservices/ that the disallowance under Section 14A readwith Rule 8D (2)(iii) cannot be made sincethere is no finding that the assesseeincurred any expenditure so as to invokeSection 14A ? andiii. Whether, based on the materialavailable before it, the Income TaxAppellate Tribunal could have come to theconclusion that no disallowance of interestand other expenses is to be made underSection 14A of the Income Tax Act? ” 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. Sd/-Assistant Registrar(CS-III)//True Copy// Sub Assistant Registrar RSTo1.The Income Tax Appellate Tribunal, Madras 'B' Bench. 2.The Commissioner of Income Tax, Chennai. 3.The Commissioner of Income Tax (Appeals)-IX, Chennai. 4.The Deputy Commissioner of Income Tax, Circle – I, Vellore. +1cc to Mr.M.Swaminathan, Advocate, S.R.No. 63+1cc to Mr.M.Muthukumar, Advocate, S.R.No. 26 https://hcservices.ecourts.gov.in/hcservices/