The Commissioner Of Income Tax, Corporate Circle-2, Madurai v. M/S.yentop Manickam Edible Oilspvt. Ltd., Virudhunagar

In the High Court of Judicature at Madras Dated : 30.8.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.891 of 2016 The Commissioner of Income Tax, Corporate Circle-2, Madurai ...Appellant Vs M/s.Yentop Manickam Edible OilsPvt. Ltd., Virudhunagar-626001....Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 17.2.2016 made in ITA.No.1745/Mds/2015 on thefile of the Income Tax Appellate Tribunal, Chennai 'C' Bench forthe assessment year 2009-10, against the order dated 15/5/2015 made in ITA No.0045/2014-15on the file of the Commissioner of Income Tax (Appeals)-I,Madurai for the Assessment Year 2009-2010, against the order dated 31/3/2014 made in PAN/GIRNo. on the file of the Assistant Commissioner ofIncome Tax Circle-I, Virudhunagar for the Assessment Year 2009-2010. For Appellant: Mr.M.Swaminathan, SSC assisted by Ms.V.Pushpa, SC For Respondent: Mr.A.S.Sriraman We have heard Mr.M.Swaminathan, learned Senior StandingCounsel assisted by Ms.V.Pushpa, learned Standing Counselappearing for the appellant – Revenue and Mr.A.S.Sriraman,learned counsel appearing for the respondent – assessee. 2. This appeal, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961 is directed against the order dated17.2.2016 made in ITA.No. 1745/Mds/2015 on the file of theIncome Tax Appellate Tribunal, Chennai 'C' Bench for theassessment year 2009-10. 3. The appeal was admitted on 23.1.2017 on the followingsubstantial questions of law : “i. Whether, on the facts andcircumstances of the case and in law, theIncome Tax Appellate Tribunal was correct indeleting the addition made under Section 2(22)(e), which clearly provides that notonly the payment by a private company by wayof advance/loan to shareholders, but alsopayment by lenders to borrowing company, inwhich, shareholders having substantialinterest of shareholding in lending companyand in the borrowing company are common willattract deemed dividend ? And ii. Whether, on the facts andcircumstances of the case and in law, theIncome Tax Appellate Tribunal was correctand justified in holding that deemeddividend can be assessed only in the handsof the shareholder of the lending companyand not the person in receipt of such loan/advance?” 4. The learned Senior Standing Counsel for the appellantsubmits that the above appeal is 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 this case is lessthan the threshold limit. 5. In the light of the said submissions, the above tax caseappeal is dismissed on account of the low tax effect. Thesubstantial questions of law framed are left open. In the eventthe tax effect is above the threshold limit fixed in the saidcircular, liberty is granted to the Revenue to make a mention tothis Court to restore the appeal to be heard and decided onmerits. No costs. Sd/- Assistant Registrar(CS VIII) //True Copy// Sub Assistant RegistrarTo1.The Income Tax Appellate Tribunal, Chennai 'C' Bench.2.The Commissioner of Income Tax (Appeals)-I, Madurai.3.The Assistant Commissioner of Income Tax Circle_I, Virudhunagar.TCA.No.891 of 2016 rsv[co]srg 15/11/2019 https://hcservices.ecourts.gov.in/hcservices/