The Commissioner Of Income Tax, Corporate Circle 3(1), Chennai-34 v. M/S.tocheunglee Stationery Manufacturing Company Pvt. Ltd., Polivakkam

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 30.8.2019 The Honourable Mr.Justice T.S.SIVAGNANAMandThe Honourable Mrs.Justice V.BHAVANI SUBBAROYAN The Commissioner of Income Tax, Corporate Circle 3(1), Chennai-34...Appellant VsM/s.Tocheunglee StationeryManufacturing Company Pvt. Ltd.,Polivakkam-602002....Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 23.9.2015 made in ITA.No.1363/Mds/2015 on thefile of the Income Tax Appellate Tribunal, Chennai 'B' Bench forthe assessment year 2008-09, against the order dated 26/02/2015made in ITA.No.580/CIT(A)-11/2013-14 on the file of theCommissioner of Income Tax (Appeals) -II and against the orderdated 29.12.2011 on the file of the Assistant Commissioner ofIncomeTax,CompanyCircle-III(2),madeinGIR.No./PAN.No. for the Assessment year 2008-09. For Appellant:Mr.M.Swaminathan, SSC assisted byMs.V.Pushpa, SCFor Respondent :Mr.V.S.Jayakumar We have heard Mr.M.Swaminathan learned Senior StandingCounsel assisted by Ms.V.Pushpa, learned Standing Counselappearing for the appellant – Revenue and Mr.V.S.Jayakumar,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 dated23.9.2015 made in ITA.No. 1363/Mds/2015 on the file of the https://hcservices.ecourts.gov.in/hcservices/ Income Tax Appellate Tribunal, Chennai 'B' Bench for theassessment year 2008-09. 3. The appeal was admitted on 08.11.2016 on the followingsubstantial questions of law : “i. Whether on the facts and in thecircumstances of the case, the findings ofthe Tribunal were right when Explanation 2(iv) to Section 10A defines the word 'exportturnover' whereby it had been clearly statedthat it would not include freight,telecommunication charges attributable tothe delivery of the articles or things orcomputer software outside or expenses if anyincurred in foreign exchange while computingdeduction under Section 10b of the IncomeTax Act ? And ii. Whether, on the facts andcircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatfor the purpose of applying formula underSub-Section (4) of Section 10B, the freight,telecommunication charges or insuranceattributable to the delivery of the articlesor things or computer software outside orexpenses, if any incurred in foreignexchange in providing the technical servicesoutside India ought to be excluded both fromthe export turnover and from total turnovereven though the Statute has provided forsuch exclusion only from the exportturnover?" 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 said https://hcservices.ecourts.gov.in/hcservices/ circular, 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 //True Copy// Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai 'B' Bench. 2.The Commissioner of Income Tax(Appeals)-II,Chennai -34.3.The Assistant Commissioner of Income Tax,Company Circle -III(2), Chennai -34. +1 cc to M/s.M.Swaminathan,Advocate Sr.No. 75841+1 cc to M/s.V.S.Jayakumar,Advocate Sr.No. 75719AKM/12.11.19/3P-6C / TCA.No.779 of 2016