Madras High Court
M/S. Madras Engineering ... vs The Deputy Commissioner Of Income ... on 23 February, 2021
T.C.A.Nos.482 & 485 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE: 23.02.2021
CORAM:
THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE T.V.THAMILSELVI
T.C.A.Nos.482 & 485 of 2017
M/s. Madras Engineering Industries P Ltd.,
14, Sathyanarayana Avenue,
R.A.Puram,
chennai - 600 028
PAN : AAACM 4509 P ... Appellant in both TCAs
v.
The Deputy Commissioner of Income Tax.
Circle - 4(1),
Chennai - 600 034. ... Respondent in both TCAs
Appeals preferred under Section 260A of the Income Tax Act,
1961, against the order of the Income Tax Appellate Tribunal, Chennai,
''A'' Bench, dated 21.09.2016 in I.T.A.Nos.2260 Mds/2015 &
125/Mds/2016 for the Assessment Year 2011-2012.
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T.C.A.Nos.482 & 485 of 2017
For Appellant : Mr.M. Kaushik
(in both TCA) for Mr. A.S.Sriraman
For Respondent : Mr. Karthik Ranganathan
(in both TCA) Standing Counsel
COMMON JUDGMENT
(Judgment was delivered by M. DURAISWAMY, J.)
These appeals, filed by the Revenue under Section 260A of the
Income Tax Act, 1961 (for short, the Act) are directed against the
common order dated 21.09.2016 made in I.T.A.Nos.2260 Mds/2015
& 125/Mds/2016 on the file of the Income Tax Appellate Tribunal,
Chennai, ''A'' Bench (for brevity, the Tribunal) for the Assessment Year
2011-2012.
2.The appeals were admitted on 14.11.2017 on the following
substantial questions of law:
“(i) Whether the Income Tax Appellate
Tribunal is correct in law in sustaining the
disallowance of the claim for deduction of guarantee
commission paid to the Directors of the assessee
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T.C.A.Nos.482 & 485 of 2017
company, including a non-whole time Director, by
questioning the necessity of such payment in the
course of business of the assessee company?
(ii) Whether the Revenue is empowered to
question the necessity of payment in the course of
business of the assessee company either under
section 37(1) of the Income Tax Act, 1961 or under
section 40A(2)(a) of the said Act or under any other
provision of the said Act?
(iii) Whether the Income Tax Appellate
Tribunal erred in law in sustaining the disallowance
or rent payments to a Director towards rent of a
property owned by such Director and taken by the
company on lease and/or tenancy to provide rent
free accommodation to the same Director under the
contract of employment of the Director with the
assessee company?
(iv) Whether the Income Tax Appellate
Tribunal erred in law in disregarding the original
transaction between the assessee company and its
Director under section 40A(2) (a) of the Income
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T.C.A.Nos.482 & 485 of 2017
Tax Act, 1961 with regard to payment of rent to a
Director in respect of the premises leased from such
Director and treating the same as payment of
remuneration in another form notwithstanding the
existence of an enforceable lease agreement and/or
rental agreement?
(v) Whether the Income Tax Appellate
Tribunal erred in law in sustaining the disallowance
fo payment of rent by the assessee company to its
Director for the property taken on lease/rent from
the Director, though no authority had questioned
;the fair market value of the rent paid to the Director
of the property leased to the assessee company?"
.3. We have heard Mr.M. Kaushik, learned counsel for the
appellant and Mr. Karthik Ranganathan, learned Standing Counsel for
the respondent.
4. It may not be necessary for this Court to decide the Substantial
Questions of Law framed for consideration on account of certain
subsequent developments. The Government of India enacted the Direct
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T.C.A.Nos.482 & 485 of 2017
Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for
resolution of disputed tax and for matters connected therewith or
incidental thereto. The Act of the Parliament received the assent of the
President on 17th March 2020 and published in the Gazette of India on
17th March 2020.
5. We are informed by the learned counsel for the
appellant that the assessee has already been issued with Form – 3 on
09.12.2020 and the learned counsel for the appellant seeks permission of
this Court to withdraw the appeals.
6. In view of the submission made by the learned counsel for the
appellant, the Tax Case Appeals are dismissed as withdrawn. No costs.
[M.D., J.] [T.V.T.S., J.]
23.02.2021
2/3
Index : Yes/No
Internet : Yes
Rj
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T.C.A.Nos.482 & 485 of 2017
To
1. The Deputy Commissioner of Income Tax.
Circle - 4(1),
Chennai - 600 034.
2. The Income Tax Appellate Tribunal,
Chennai, ''A'' Bench.
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T.C.A.Nos.482 & 485 of 2017
M. DURAISWAMY, J.
and
T.V. THAMILSELVI, J.
Rj
T.C.A.Nos.482 & 485 of 2017
23.02.2021
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