The Commissioner Of Income Tax I, Chennai v. M/S.vimkar Contracts Works Pvt. Ltd

In the High Court of Judicature at Madras Dated : 27.08.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAMandThe Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal Nos.288 of 2015 and 1381 of 2009 The Commissioner of Income Tax I,Chennai. ...Appellant in both the appealsVs M/s.Vimkar Contracts Works Pvt. Ltd.,No.45, Chamiers Road, Chennai - 600 028.PAN: ...Respondent in both the appeals Appeal in TCA.No.288 of 2015 filed under Section 260A of theIncome Tax Act, 1961 against the order dated 07.05.2014 made inITA.No.509/Mds/2014 on the file of the Income Tax AppellateTribunal, Chennai 'C' Bench for the assessment year 2006-07against the order of the Commissioner of Income Tax (Appeals)IIDated 31.10.2013 and made in I.T.A. No. 1275/2013-2014 andagainst the order of the Deputy Commissioner of Income Tax,Company Circle III(4) Chennai 34 for the Assessment year 2006-2007 against the order of the Deputy Commissioner of Income Tax,Company Circle, Chennai 34 made in PAN/GIR No. 1830-V/ , 2006-2007 dated 15.02.2008. Appeal in TCA.No.1381 of 2009 filed under Section 260A of theIncome Tax Act, 1961 against the order dated 03.04.2009 made inITA.No.1226/Mds/2008 on the file of the Income Tax AppellateTribunal, Chennai 'C' Bench for the assessment year 2005-06against the order of the commissioner of Income Tax (Appeals)VIII dated 07.03.2008 and made in PAN/GIR No. 1830-V/AABCV3911Hin I.T.A. no. 285/2007-2008 and against the order of theAssistant Commissioner of Income Tax, Company Circle III(4)Chennai for the Assessment year 2005-2006. For Appellant: Mr.M.Swaminathan, SSC and Ms.V.Pushpa, SSC For Respondent: No appearance COMMON JUDGMENT (Judgment was delivered by T.S.Sivagnanam,J) We have heard Mr.M.Swaminathan, learned Senior StandingCounsel assisted by Ms.V.Pushpa, learned Senior Standing Counselappearing for the appellant – Revenue. 2.TCA.No.288 of 2015, filed by the Revenue under Section 260Aof the Income Tax Act, 1961, is directed against the order dated07.05.2014 made in ITA.No.509/Mds/2014 on the file of the IncomeTax Appellate Tribunal, Chennai 'C' Bench for the assessmentyear 2006-07. 3.TCA.No.1381 of 2009, filed by the Revenue under Section260A of the Income Tax Act, 1961, is directed against the orderdated 03.04.2009 made in ITA.No.1226/Mds/2008 on the file of theIncome Tax Appellate Tribunal, Chennai 'C' Bench for theassessment year 2005-06. 4.TCA.No.288 of 2015 was admitted on 08.06.2015 on thefollowing substantial questions of law :“1) Whether on the facts and in thecircumstances of the case, the Tribunal was right inholding that the assessee is entitled to the benefitof Section 80IB even though it is doing themanufacturing of the goods only as a contractor inthe premises rented out by the principal and thattoo under the supervision of the principal?2) Whether the finding of the Tribunal is properthat the Explanation at the end of Section 80IAstating that a person who executes works contractcould not be given the benefit cannot be madeapplicable to cases that fall under Section 80IB?" 5.TCA.No.1381 of 2009 was admitted on 21.12.2009 on thefollowing substantial question of law : “Whether in the facts and circumstances of thecase, the Tribunal was right in holding that theassessee is entitled to the benefit of 80IB eventhough it is manufacturing the goods only as acontractor and in the premises rented out by theprincipal under the supervision of the Principalparticularly when the Principal was also claimingthe benefit under Section 80IB?" 6.The learned Senior Standing Counsel for the appellantsubmits that the above appeals are not pursued by the Revenue onaccount of the low tax effect in terms of Circular No.17/2019 https://hcservices.ecourts.gov.in/hcservices/ 5.TCA.No.1381 of 2009 was admitted on 21.12.2009 on thefollowing substantial question of law : “Whether in the facts and circumstances of thecase, the Tribunal was right in holding that theassessee is entitled to the benefit of 80IB eventhough it is manufacturing the goods only as acontractor and in the premises rented out by theprincipal under the supervision of the Principalparticularly when the Principal was also claimingthe benefit under Section 80IB?" 6.The learned Senior Standing Counsel for the appellantsubmits that the above appeals are not pursued by the Revenue onaccount of the low tax effect in terms of Circular No.17/2019 https://hcservices.ecourts.gov.in/hcservices/ dated 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 the respectivecases is less than the threshold limit. 7.In the light of the said submissions, the above tax caseappeals are dismissed on account of the low tax effect. Thesubstantial questions of law framed are left open. In the eventthe tax effect in the respective cases is above the thresholdlimit fixed in the said circular, liberty is granted to theRevenue to make a mention to this Court to restore the appealsto be heard and decided on merits. No costs. s/d- Assistant Registrar(CO) True Copy Sub-Assistant Registrarcse To1.The Income Tax Appellate Tribunal, Chennai 'C' Bench. 2.The Commissioner of Income Tax II121, Mahathma Gandhi RoadChennai 34.3.The Commissioner of Income TaxAppeals VIII, Chennai4.The Deputy Commissioner of Income Tax Company Circle III(4) Chennai 34.5.The Assistant Commissioner of Income TaxCompany Circle III(4) Chennai. +1 CC to Mr.M.Swaminathan, Advocate sr 73568.TCA.Nos.288 of 2015and 1381 of 2009 MP(CO)SP(31/10/2019) https://hcservices.ecourts.gov.in/hcservices/