The Principal Commissioner Of Income Tax-2, Chennai-34 v. M/S.indowind Energy Ltd., Chennai-34

In the High Court of Judicature at MadrasDated : 02.12.2020 Coram : The Honourable Mr.Justice T.S.SIVAGNANAMandThe Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.555 of 2018 The Principal Commissioner of Income Tax-2, Chennai-34....AppellantVs M/s.Indowind Energy Ltd.,Chennai-34....Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 25.10.2016 made in ITA.No.936/Mds/2015 on thefile of the Income Tax Appellate Tribunal, Chennai 'B' Bench forthe assessment year 2006-07,1.against the order of theCommissioner of Income Tax(Appeals)-6 121, Mahatma Gandhi Raod,Nungambakkam, Chennai-34 dt.12.02.15 in ITA.No.143/CIT(A)-6/2008-09. Assessment year 2006-07.2.against the order of theCommissioner of Income Tax(Appeals)-6 121, Mahatma Gandhi Road,Nungambakkam, Chennai-34 dt 23.01.15 in ITA.No/234/CIT(A)-6/2014-15 Assessment year 2008-2009. 3.against the order of theDeputy Commissioner of Income Tax, Company Circle-11(3), RoomNo.513, 5[th] floor, Wanaparthy Block, 121, Mahatma Gandhi Road,Nungambakkam, Chennai-34, PAN/GIR No. , Assessment year2008-09 dt.28/03/2014. 4.against the order of the AssistantCommissioner of Income Tax, Company Circle 11(3), 121, N.H.Road,Chennai-34 dt.30/12/2008 in PAN/GIR No. , Assessmentyear 2006-2007. For Appellant :Mr.Karthik Ranganathan, SCFor Respondent:Mr.A.S.Sriraman Judgment was delivered by T.S.Sivagnanam,J We have heard Mr.Karthik Ranganathan, learned StandingCounsel appearing for the appellant – Revenue and Page numbers https://hcservices.ecourts.gov.in/hcservices/ Mr.A.S.Sriraman, learned counsel accepting notice for therespondent – assessee. 2. This appeal, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961 (for short, the Act) is directedagainst the order dated 25.10.2016 made in ITA.No.936/Mds/2015on the file of the Income Tax Appellate Tribunal, Chennai 'B'Bench (for brevity, the Tribunal) for the assessment year 2006-07. 3. The appeal was admitted on 28.8.2018 on the followingsubstantial questions of law : “i. Whether, in the facts andcircumstances of the case and in law, theAppellate Tribunal was correct in holdingthat the loss was due to non recoverabilityof advances made to M/s.Cicon Environmentand not for any expenditure incurred by theassessee and therefore, the assesseedeserved deduction for the entire loss ofRs.1,02,00,000/- as business loss allowableunder Section 37(1) of the Income Tax Act ?ii. Whether the ITAT was correct inholding that the advances made to M/s.CiconEnvironment eligible to be claimed asbusiness loss when the proposed project didnot materialize and the question of claimingthe expenses from the commissioning of theproject does not arise ? Andiii. Whether, in the facts and in thecircumstances of the case and in law, theTribunal was correct in treating thecompensation paid of Rs.65 lakhs to itsassociate company M/s.Indonet Global Ltd.,for the delay in commissioning the projectto be allowed as deduction as per Section 37of the Act? ” 4. The learned Standing Counsel for the appellant submitsthat the above appeal is not pursued by the Revenue on accountof the low tax effect in terms of Circular No.17/2019 dated08.8.2019 issued by the Central Board of Direct Taxes. By thesaid 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. Page numbers 4. The learned Standing Counsel for the appellant submitsthat the above appeal is not pursued by the Revenue on accountof the low tax effect in terms of Circular No.17/2019 dated08.8.2019 issued by the Central Board of Direct Taxes. By thesaid 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. Page numbers 5. In the light of the said submissions, the above tax caseappeal is dismissed on account of the low tax effect. Thesubstantial questions of law framed are 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. Sd/- Assistant Registrar(CCC) //True Copy// Sub Assistant RegistrarRS To1.The Income Tax Appellate Tribunal, Chennai 'B' Bench.2.The Commissioner of Income Tax(Appeals)-6 121, Mahatma Gandhi Road, Nungambakkam, Chennai-34.3.The Deputy Commissioner of Income Tax, Company Circle-II(3), Room No.513, 5[th] Floor, Wanapathy Block, 121, Mahatma Gandhi Road, Nungambakkam, Chennai-34.4.The Assitant Commissioner of Income Tax, Company Circle-11(3), 121, N.H.Road, Chennai-34.TCA.No.555 of 2018SR II(CO)CB(19/01/2021) Page numbers https://hcservices.ecourts.gov.in/hcservices/