The Commissioner Of Income-Tax-I, Coimbatore v. M/S.elgi Ultra Industries Ltd., India House

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 14.02.2020 CORAMTHE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.670 of 2011 The Commissioner of Income-Tax-I,Coimbatore....Appellant Vs.M/s.Elgi Ultra Industries Ltd.,India House, 1239, Tiruchy Road,Coimbatore-18 PAN ...Respondent Tax Case Appeal filed under Section 260A of the IncomeTax Act, 1961 against the common order of the Income TaxAppellate Tribunal 'C' Bench, Chennai dated 15.06.2011 in ITANo.463/Mds/2011. Against the order of the Commissioner of Income Tax (I)Coimbatore dated 05.09.2006 and 24.12.2010 Appeal No.314/05-06and 100/09-10 for the Assessment year 2004-2005.Against the Order of the Assistant Commissioner of IncomeTax Company Circle I(1) Coimbatore dated 27.10.2005 in theAssessment year 2004-05 in PAN.No./GIR.No.AAACE4566GFor Appellant : Mr.T.R.Senthil Kumar, Ms.K.G.Usha RaniFor Respondent : Mr.N.V.Balaji J U D G M E N T(Judgment of the Court was delivered by DR.VINEET KOTHARI,J) This Tax Case Appeal has been filed by the Revenuecalling in question the correctness of the order passed by theIncome Tax Appellate Tribunal, 'C' Bench, Chennai, by raisingthe following substantial questions of law:"1.Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal isright in law in holding that the assessee isjustified in taking over of debts of its sisterconcern, though there was no merger oramalgamation, which is obviously a self-servingarrangement and a colorable device?2. Whether, on the facts and in the circumstancesof the case, the Tribunal is correct in observing Page 1 of 2 https://hcservices.ecourts.gov.in/hcservices/ that the so written-off amount, if not, allowableas deduction under section 36 (1) (vii) is to beallowed under section 37 (1) of the Act,especially when there is a special provision fordeduction of debts?3. Whether, on the facts and in the circumstancesof the case, the Income tax Appellate Tribunal iscorrect in holding that the bad debts are coveredby Section 37 (1) of the Act by relying only onthe self serving accounting by the assessee, whenthe same is not laid out and expended wholly forthe business of the assessee? 2. When the matter was taken up for hearing, the learnedStanding Counsel brought to our notice the Circularinstruction issued by the Central Board of Direct Taxes videCircular No.17/2019 dated 8th August 2019, wherein, it isstipulated that appeals shall not be filed/pursued by theDepartment before the High Court in cases where the tax effectdoes not exceed Rs.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 appealsfiled by the Revenue is dismissed as not pressed, keeping openthe substantial questions of law for determination in anappropriate case. 1.The Assistant Registrar, Income Tax Appellate Tribunal 'C' Bench,Chennai. Page 2 of 2 https://hcservices.ecourts.gov.in/hcservices/