The Commissioner Of Income Tax-Ii Chennai v. M/S.east Coast Terminal Operations And Port Services Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.66 and 69 of 2016 The Commissioner of Income Tax-IIChennai... Appellant in both appealsVs. M/s.East Coast Terminal Operations and PortServices Ltd., No.4, 6[th] Floor, Buhari Towers,Moores Road,Chennai 600 006.... Respondent in both appeals Tax Case Appeals filed under Section 260A of the IncomeTax Act, 1961 against the order of the Income Tax AppellateTribunal 'C' Bench, Chennai dated 26.09.2013 in ITA No.563 and566/Mds/2013 for the Assessment year 2006-07 and 2009-10respectively, against the Commissiioner of Income Tax Appeals III 121,Mahatma Gandhi Road, Chennai 600 034 and made in ITANo.656/08-09/A-111 and ITA No.157/2011-12/A-III for theAssessment Year 2006-07 and 2009-10 dated 11/12/2012respectively against the Depurty Commissioner of Income TaxCompany Circle II (1) Chennai and made in PAN No.AAACE4812DAssessment Year 2006-07 and 2009-10 respectively dated31.12.2008, 17/11/2011. C O M M O N J U D G M E N T(Judgment of the Court was delivered by DR.VINEETKOTHARI,J) These Tax Case Appeals are been filed by the Revenuecalling in question the correctness of the order passed by the https://hcservices.ecourts.gov.in/hcservices/ Income Tax Appellate Tribunal, 'C' Bench, Chennai, by raisingthe following substantial question of law: T.C.A.No.66 of 2016 "1.Whether on the facts and circumstances of thecase, the Tribunal was right in holding that theassessee ship enjoying the benefit of Tonnage taxscheme on the issue regarding the ownershipespecially when the major shareholders of the assessee company held 99.99% of the shareholdingwho were based in Dubai?2.Whether on the facts and circumstances of thecase, the Tribunal was right in holding that thetonnage tax scheme was to be granted to theassessee company eventhough the provisions ofSec.115VD and Sec.115VC were not satisfied by theassessee company?3. Whether on the facts and circumstances of thecase, the Tribunal was right in holding that thedisallowance made u/s.14A Rule 8D could not bemade in cases where the assessee is entitled totonnage tax scheme?4. Is not the finding of the Tribunal was badespecially when the A.O., made disallowance as perSection 14A read with Rule 8D(2)(iii) fordisallowing the expenses earned on exemptedincome?” T.C.A.No.69 of 2016 "1.Whether on the facts and circumstances of thecase, the Tribunal was right in holding that theassessee ship enjoying the benefit of Tonnage taxscheme on the issue regarding the ownershipespecially when the major shareholders of theassessee company held 99.99% of the shareholdingwho were based in Dubai?2.Whether on the facts and circumstances of thecase, the Tribunal was right in holding that thetonnage tax scheme was to be granted to theassessee company eventhough the provisions ofSec.115VD and Sec.115VC were not satisfied by theassessee company?3. Whether on the facts and circumstances of thecase, the Tribunal was right in holding that theprovision for restatement of assets as at the endof the year due to fluctuation in foreign currencyamounting to Rs.9.93 Crores cannot be disallowedin view of the fact that the assessee was entitled to the benefit of tonnage tax scheme withoutadjudicating the issue on merits?4. Whether on the facts and circumstances of thecase, the Tribunal was right in holding that thedisallowance made u/s.14A r/w Rule 8D could not bemade in cases where the assessee is entitled totonnage tax scheme?5. Whether the finding of theTribunal was properin holding that once the assessee is eligible fortonnage tax scheme then further disallowanceu/s.14A would not arise?” to the benefit of tonnage tax scheme withoutadjudicating the issue on merits?4. Whether on the facts and circumstances of thecase, the Tribunal was right in holding that thedisallowance made u/s.14A r/w Rule 8D could not bemade in cases where the assessee is entitled totonnage tax scheme?5. Whether the finding of theTribunal was properin holding that once the assessee is eligible fortonnage tax scheme then further disallowanceu/s.14A would not arise?” 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 cases, the tax effect is said to beless than the monetary limit imposed and therefore, theappeals filed by the Revenue are dismissed as not pressed,keeping open the substantial questions of law fordetermination in an appropriate case. Sd/-Assistant Registrar //True Copy//Sub Assistant Registrar KST To 1.The Income Tax Appellate Tribunal, 'C' Bench, Chennai. 'C' Bench, Chennai. 2.The Commissioner of Income Tax II, Chennai. Chennai. 3.The Commissioner of Income Tax Appeals III, 121, Mahatma Gandhi Road, Chennai 600 034. 121, Mahatma Gandhi Road, Chennai 600 034. 4.The Deputy Commissioner of Income Tax, Company Circle II (V), Chennai. Company Circle II (V), Chennai. T.C.(A) No.66 & 69 of 2016 jp[co]srg 16/07/2020