Madras High Court
Principal Commissioner Of Income ... vs M/S.Fl Smidth Private Limited on 28 April, 2021
T.C.A.No.277 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 28.04.2021
CORAM
THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE R. HEMALATHA
T.C.A.No.277 of 2021
Principal Commissioner of Income Tax 2,
No.121, Mahatma Gandhi Road,
Chennai – 600 034. ... Appellant
Vs.
M/s.FL Smidth Private Limited,
34, Egatoor, Kelambakkam,
Rajiv Gandhi Salai,
Chennai – 600 103. ... Respondent
Appeal preferred under Section 260A of the Income Tax Act, 1961,
against the order of the Income Tax Appellate Tribunal, Madras, “D”
Bench, dated 05.09.2017 in I.TA.No.2118/Mds/2011, Assessment Year
2007-08.
For Appellant : Mr.Karthik Ranganathan
Senior Standing Counsel
For Respondent : Mr.S.P.Chidambaram
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T.C.A.No.277 of 2021
JUDGMENT
(Judgment was delivered by M.DURAISWAMY, J.)
We have heard Mr.Karthik Ranganathan, learned Senior Standing
Counsel for the appellant/Revenue and Mr.S.P.Chidambaram, learned
counsel for the respondent/assessee.
2.The appeal, filed by the Revenue under Section 260A of the
Income Tax Act, 1961 (for short, the Act) is directed against the order
dated 05.09.2017 made in I.TA.No.2118/Mds/2011 on the file of the
Income Tax Appellate Tribunal, Chennai, “D” Bench (for brevity, the
Tribunal) for the Assessment Year 2007-08.
3.The appellant/Revenue has raised the following substantial
questions of law in the above appeal :
“1.Whether on the facts and in the
circumstances of the case and in law, the Hon'ble
ITAT was right in deleting the disallowances made
under Section 40(a)(ia) of the Act on the
commission payment to the non-resident agent,
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T.C.A.No.277 of 2021
relying on the decision of Hon'ble Madras High
Court in the case of CIT vs. Faizan Shoes Pvt. Ltd.
TCA No.789 of 2013 dated 22.07.2014, when the
facts of the case are distinguishable?
2.Whether on the facts and in the
circumstances of the case and in law, the Hon'ble
ITAT was right in deleting the disallowances made
under Section 40(a)(ia) of the Act on the payment
towards import of engineering drawings from its
associated enterprises at Denmark, as per provision
of explanation 2 to Section 9(1)(vii) of the IT Act,
relying on the decision of Hon'ble Madras High
Court in the case of CIT vs. Faizan Shoes Pvt. Ltd.
TCA No.789 of 2013 dated 22.07.2014, when the
facts of the case are distinguishable?”
4.The learned Senior Standing Counsel for the appellant submits
that the above appeal is not pursued by the Revenue on account of the
Low Tax Effect in terms of Circular No.17/2019 dated 08.08.2019 issued
by the Central Board of Direct Taxes. By the said Circular, the monetary
limit for filing or pursuing an appeal before the High Court has been
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T.C.A.No.277 of 2021
increased to Rs.1 crore. It is further submitted that the tax effect in this
case is less than the threshold limit.
5.In the light of the said submissions, the above Tax Case Appeal
is dismissed as withdrawn on account of the Low Tax Effect. The
substantial questions of law framed are left open. In the event the tax
effect in this case is above the threshold limit fixed in the said
Circular, liberty is granted to the Revenue to make a mention to this
Court to restore the appeal to be heard and decided on merits. No costs.
[M.D., J.] [R.H., J.]
28.04.2021
Index : Yes/No
Internet : Yes
mkn
To
1.The Income Tax Appellate Tribunal, Chennai, “D” Bench
2.The Principal Commissioner of Income Tax 2,
No.121, Mahatma Gandhi Road,
Chennai – 600 034.
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T.C.A.No.277 of 2021
M.DURAISWAMY, J.
and
R. HEMALATHA, J.
mkn
T.C.A.No.277 of 2021
28.04.2021
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