The Commissioner Of Income Tax, Virudhunagar Circle,Virudhunagar v. M/S.m.u.a.arumuga Perumal & Sons, Chatrapatti

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.8.2019 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMANDThe Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.389 of 2016 The Commissioner of Income Tax, Virudhunagar Circle,Virudhunagar ...Appellant Vs M/s.M.U.A.Arumuga Perumal & Sons, Chatrapatti-626102....Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 30.9.2015 made in ITA.No.1626/Mds/2015 on thefile of the Income Tax Appellate Tribunal, Chennai 'C' Bench forthe assessment year 2009-10 against the Order of theCommissioner of Income Tax (Appeals)-3, Madurai, dated30.04.2015 and made in ITA No.368/2011-12 for the AssessmentYear 2009-10 against the Order of the Deputy Commissioner ofIncome Tax Company Circle-I (i/c), Virudhunagar, dated21.12.2011 and made in PAN No.AABFM5325 M for the AssessmentYear 2009-10. For Appellant: Mr.M.Swaminathan, SSC assisted by Ms.V.Pushpa, SCFor Respondent: Mr.A.S.Sriraman for Mr.S.Sridhar Judgment was delivered by T.S.Sivagnanam,J 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 dated30.9.2015 made in ITA.No. 1626/Mds/2015 on the file of theIncome Tax Appellate Tribunal, Chennai 'C' Bench for theassessment year 2009-10. https://hcservices.ecourts.gov.in/hcservices/ 3. The appeal was admitted on 15.6.2016 on the followingsubstantial question of law :“Whether, on the facts and circumstancesof the case and in law, the Income TaxAppellate Tribunal was correct in deletingthe addition made under Section 2(22)(e) ofthe Income Tax Act, which clearly providesthat not only the payment by a privatecompany by way of advance to shareholders,but also payment by lenders to borrowingfirm, in which, shareholders havingsubstantial shareholding in lending companyand the partners of borrowed firm are commonwill attract deemed dividend under Section 2(22)(e) ?” 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 question of law framed is 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. RS Sd/- Assistant Registrar(CS VIII) //True Copy// Sub Assistant Registrar 1. The Income Tax Appellate Tribunal, Chennai 'C' Bench, Chennai. 2. The Commissioner of Income Tax (Appeals)-3,Madurai, 3. The Deputy Commissioner of Income Tax Company Circle-I (i/c), Virudhunagar, +1cc to Mr.M.Swaminathan, Advocate, SR.No.75845/19 +1cc to Mr.S.Sridhar, Advocate, SR.No.76094/19 TCA.No.389 of 2016 Kak(19/11/2019)