Madras High Court
Commissioner Of Income Tax vs M/S.Indian Additives Limited on 2 August, 2021
TCA.No.1382 of 2010
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 02.08.2021
CORAM :
The Honourable Mr.Justice T.S.SIVAGNANAM
and
The Honourable Ms.Justice SATHI KUMAR SUKUMARA KURUP
Tax Case Appeal No.1382 of 2010
Commissioner of Income Tax,
Chennai. ...Appellant
Vs
M/s.Indian Additives Limited,
Express Highway,
Manali, Chennai. ...Respondent
APPEAL under Section 260A of the Income Tax Act, 1961 against the
order dated 13.11.2009 made in ITA.No.2238/mds/2008 on the file of the
Income Tax Appellate Tribunal, 'A' Bench, Chennai for the assessment year
1999-2000.
For Appellant : Mr.Karthick Ranganathan
Senior Standing Counsel
For Respondent : Mr.G.Baskar
1/4
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TCA.No.1382 of 2010
JUDGMENT
(Delivered by T.S.Sivagnanam,J)
This appeal, filed by the Revenue under Section 260A of the Income
Tax Act, 1961 (for short, the Act) is directed against the order 13.11.2009
made in ITA.No.2238/mds/2008 on the file of the Income Tax Appellate
Tribunal, 'A' Bench, Chennai (for brevity, the Tribunal) for the assessment
year 1999-2000
2.The following two substantial questions of law were raised by the
revenue when the tax case appeal was listed for admission:
“1.Whether, on the facts and in the circumstances of
the case, the Income Tax Appellate Tribunal was right in
holding that the “running royalty” paid by the assessee
to the foreign company is allowable as revenue
expenditure?
2.Whether on the facts and in the circumstances of
the case, the Income Tax Appellate Tribunal was right in
holding that interest under Sections 234B and 234C
should be levied after allowing MAT credit contrary to
the scheme of schedule G to Form 1 viz., the return form
prescribed for the companies which clearly gives the
order and sequence in which credit for various payments
of tax is to be allowed and as per which, MAT credit is to
be set off only after TDS, advance tax and self
assessment tax?”
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TCA.No.1382 of 2010
3.We have heard Mr.Karthick Ranganathan, learned Senior Standing
Counsel for the appellant/revenue and Mr.G.Baskar, learned counsel
appearing for the respondent/assessee.
4.By order dated 22.03.2011, the Hon'ble Division Bench entertained
the tax case appeal with regard to the first substantial question of law as
framed above. With regard to the second substantial question of law, the
Hon'ble Division Bench held that the same is covered by the decision of the
Hon'ble Supreme Court in the case of Commissioner of Income Tax vs.
Tulsyan Nec Ltd. [(2011) 330 ITR 226(SC)]. Thus, the question to be
decided in this appeal is question No.1 as framed above. If such is the
position, then the tax liability arising out of the said issue is less than the
threshold limit. Therefore, the appeal filed by the revenue cannot be
proceeded on the ground of low tax effect in terms of Circular No.17/2019
dated 08.08.2019 issued by the Central Board of Direct Taxes, by which,
the monetary limit for filing or pursuing an appeal before the High Court has
been increased to Rs.1 Crore.
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TCA.No.1382 of 2010
T.S.SIVAGNANAM,J.
AND
SATHI KUMAR SUKUMARA KURUP,J.
cse
5.In the light of the said submissions, the above tax case appeal is
dismissed on account of the low tax effect. The substantial questions of law
framed are left open. In the event the tax effect is above the threshold limit
fixed in the said circular, liberty is granted to the Revenue to file a petition
before this Court to restore the appeal to be heard and decided on merits. No
costs.
(T.S.S.,J.) (S.S.K,J.)
02.08.2021
Index: Yes/No
Internet:Yes/No
Speaking Judgment/Non speaking Judgment
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To
The Income Tax Appellate Tribunal,
'A' Bench, Chennai.
TCA.No.1382 of 2010
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