The Commissioner Of Income Tax,Chennai v. M/S.fichtner Consulting Engineers India P. 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.902 to 905 of 2015 The Commissioner of Income Tax,Chennai....Appellant Vs M/s.Fichtner Consulting Engineers India P. Ltd.,No.165, 9th Floor, Menon Eternity Street, Mary's Road, Alwarpet, Chennai - 600 016....RespondentAPPEALS under Section 260A of the Income Tax Act, 1961against the common order dated 17.03.2014 made inITA.Nos.2281 and 2282/Mds/2013 and ITA.Nos.367 and368/MDS/2014 on the file of the Income Tax AppellateTribunal, Madras 'B' Bench for the assessment years 2009-10and 2010-11 and Against the order dated 28.10.2013 and madein ITA.NO.520&668/2013-2014 on the file of the Commissionerof Income Tax (Appeals) II, chennai 34 and Against theorder dated 29.12.2011 and 28.03.2013 and made in PANNOS.AAACF 5620Q and AAACF 5620Q for the Assessment years2009-2010 and 2010-2011 on the file of the Deputycommissioner of Income tax, chennai and the AssistantCommissioner of Income tax, chennai. For Appellant: Mr.Karthik Ranganathan, SSC assisted byM.S.Rajesh, SCFor Respondent:Mr.A.S.Sriramanfor Mr.S.Sridhar COMMON JUDGMENT (Judgment was delivered by T.S.Sivagnanam,J) We have heard Mr.Karthik Ranganathan, learned SeniorStanding Counsel assisted by Mr.S.Rajesh, learned StandingCounsel appearing for the appellant – Revenue andMr.A.S.Sriraman, learned counsel for Mr.S.Sridhar, learnedcounsel for the respondent-assessee. 2.These appeals, filed by the Revenue under Section 260Aof the Income Tax Act, 1961, are directed against thecommon order dated 17.03.2014 made in ITA.Nos.2281 and2282/Mds/2013 and ITA.Nos.367 and 368/MDS/2014 on the fileof the Income Tax Appellate Tribunal, Chennai 'B' Bench forthe assessment years 2009-10 and 2010-11. 3.The appeals in TCA.Nos.902 and 903 of 2015 wereadmitted on 17.11.2015 on the following substantialquestions of law : “1) Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe telecommunication and foreign travelexpenditure is to be excluded from the totalturnover of the assessee for the purpose ofdeduction claimed under Section 10A of theIncome Tax Act? 2) Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe expenditure incurred in foreign currency isto be excluded both from export turnover andtotal turnover while computing deduction underSection 10A? 3) Whether the finding of the Tribunal isproper by excluding items from the exportturnover in the light of Explanation (2)(vi) toSection 10A while dealing with Exportturnover?" 4.The appeals in TCA.Nos.904 and 905 of 2015 wereadmitted on 17.11.2015 on the following substantialquestions of law : “1) Whether, on the facts and in the circumstances of the case, the Tribunal wasright in holding that billing in excess ofrevenue is not taxable for the assessment year2009-10? 2) Is not the finding of the Tribunal badespecially when the system of accountancyfollowed its mercantile system and once theassessee has raised the bill, it has offeredthe billed value in the profit and loss accounton accrual basis?" 5.The learned Senior Standing Counsel for the appellantsubmits that the above appeals are not pursued by theRevenue on account of the low tax effect in terms ofCircular No.17/2019 dated 08.8.2019 issued by the CentralBoard of Direct Taxes. By the said Circular, the monetarylimit for filing or pursuing an appeal before the HighCourt has been increased to Rs.1 Crore. It is furthersubmitted that the tax effect in the respective cases isless than the threshold limit. 2) Is not the finding of the Tribunal badespecially when the system of accountancyfollowed its mercantile system and once theassessee has raised the bill, it has offeredthe billed value in the profit and loss accounton accrual basis?" 5.The learned Senior Standing Counsel for the appellantsubmits that the above appeals are not pursued by theRevenue on account of the low tax effect in terms ofCircular No.17/2019 dated 08.8.2019 issued by the CentralBoard of Direct Taxes. By the said Circular, the monetarylimit for filing or pursuing an appeal before the HighCourt has been increased to Rs.1 Crore. It is furthersubmitted that the tax effect in the respective cases isless than the threshold limit. 6.In the light of the said submissions, the above taxcase appeals are dismissed on account of the low taxeffect. The substantial questions of law framed are leftopen. In the event the tax effect in the respective casesis above the threshold limit fixed in the said circular,liberty is granted to the Revenue to make a mention to thisCourt to restore the appeals to be heard and decided onmerits. No costs. Sd/- Assistant Registrar(CS) //True Copy// cse To 3.THE COMMISSIONER OF INCOME TAX,(APPEALS)II,121,MAHATHMA GANDHI ROAD,NUNGAMBAKKAM, CHENNAI 34. 4.THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(1),ROOM NO.511,V FLOOR,NEW BLOCK,AAYANKAR BHAVAN,NO.121,UTHMAR GANDHI SALAI,CHENNAI 34. 5.THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE II(1),ROOM NO.511,V FLOOR,NEW BLOCK,AAYANKAR BHAVAN,NO.121,UTHMAR GANDHI SALAI,CHENNAI 34.TCA.Nos.902 to 905 of 2015A.SK(08/11/2019)