Madras High Court
M/S.M.Ct.M.Global Investments ... vs The Asst. Commissioner Of Income ... on 12 July, 2021
Tax Case Appeal Nos.248 to 252 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 12.07.2021
CORAM
THE HON'BLE MR.JUSTICE M. DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE R. HEMALATHA
Tax Case Appeal Nos.248 to 252 of 2017
M/s.M.Ct.M.Global Investments Private Limited
761, Anna Salai,
Chennai – 600 002. ... Appellant
in all appeals
Vs.
The Asst. Commissioner of Income Tax,
Company Circle IV(1),
Chennai – 600 034. ... Respondent
in all appeals
Tax Case Appeals in Tax Case Appeal Nos.248 to 252 of 2017
filed under Section 260A of the Income Tax Act, 1961 against the order
of the Income Tax Appellate Tribunal, Chennai "A" Bench, dated
21.10.2016 passed in I.T.A.No.1438/Mds/2009, C.O.No.167/Mds/2009
in I.T.A.No.1438/Mds/2009, I.T.A.Nos.1873/Mds/2008, 1954/Mds/2008
and 456/Mds/2009 respectively.
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Tax Case Appeal Nos.248 to 252 of 2017
For Appellant : Ms.Sri Niranjani Srinivasan
for M/s.G.Baskar
in all appeals
For Respondent : Mr.Karthik Ranganathan
Senior Standing Counsel
in all appeals
COMMON JUDGMENT
(Delivered by M.DURAISWAMY, J.)
The above appeals filed by the assessee under Section 260A of the
Income Tax Act, 1961 ('the Act' for brevity), are directed against the
order dated 21.10.2016 passed by the Income Tax Appellate Tribunal,
Chennai "A" Bench, ('the Tribunal' for brevity) in
I.T.A.No.1438/Mds/2009, C.O.No.167/Mds/2009 in
I.T.A.No.1438/Mds/2009, I.T.A.Nos.1873/Mds/2008, 1954/Mds/2008
and 456/Mds/2009 for the assessment years 2001-02, 2001-02, 2004-05,
2004-05 and 2005-06 respectively. The appellant/assessee has raised the
following substantial questions of law in the above appeals:
“T.C.A.No.248 of 2017 :
1.Whether on the facts and in the circumstances of
the case the Income Tax Appellate Tribunal is right in law
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Tax Case Appeal Nos.248 to 252 of 2017
in holding that expenditure incurred by Malaysian Branch
cannot be treated as allowable expenditure even if income
from Malaysian Branch was treated as taxable income in
India?
2.Whether on the facts and in the circumstances of
the case, expenditure incurred for earning an income has
to be allowed either under the head "business" or under
the head "other sources" according to the treatment of the
income under the head "business" or under the head "other
sources" in accordance with section 37 or under section 56
of Income Tax Act, 1961 respectively?
3.Whether on the facts and circumstances of the
case, the Income Tax Appellate Tribunal is right in law in
rejecting the claim of the Appellant that the income derived
in Malaysia constitutes business income, even when the
Appellant is systematically and continuously carrying on
business of purchase/sale of investments?
4.Whether on the facts and in the circumstances of
the case the Income Tax Appellate Tribunal is right in law
in holding that the appellant is liable to pay interest under
section 234B of Income Tax Act, 1961?
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Tax Case Appeal Nos.248 to 252 of 2017
5.Whether on the facts and in the circumstances of
the case the Income Tax Appellate Tribunal is right in law
in holding that the appellant is liable to pay interest under
section 234D of Income Tax Act, 1961?
T.C.A.No.249 of 2017 :
1.Whether on the facts and in the circumstances of
the case the Income Tax Appellate Tribunal is right in law
in upholding the jurisdiction of Assessing Officer in
reopening the assessment under section 147?
2.Whether on the facts and in the circumstances of
the case the Income Tax Appellate Tribunal was right in
law in holding that the Assessing Officer has "reason to
believe" and is justified in reopening the assessment by
issuance of notice under section 148 in the absence of any
new or tangible material?
3.Whether on the facts and in the circumstances of
the case the Income Tax Appellate Tribunal was right in
observing that non issuance of notice under section 143(2)
of the Income Tax Act within the time stipulated therein,
amounts to procedural irregularity and it will not make
reassessment nullity in law?
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Tax Case Appeal Nos.248 to 252 of 2017
4.Whether on the facts and circumstances of the
case, the Income Tax Appellate Tribunal is right in law in
holding that the income earned by Malaysian Branch of the
company is taxable in India and not taxable in Malaysia?
5.Whether on the facts and in the circumstances of
the case the Income Tax Appellate Tribunal is right in law
in holding that the income by way of interest had to be
classified as "income from other sources and not "income
from business", even if assessee is the nonbanking
financial company and the interest income earned in the
course of its business activity?
6.Whether on the facts and circumstances of the
case, the Income Tax Appellate Tribunal is right in law in
holding that the dividend income is liable to be taxed under
the head "income from Other Sources" and not under the
head "income from business"?
7.Whether on the facts and circumstances of the
case, the Income Tax Appellate Tribunal is right in law in
holding that the income/loss on purchase and sale of stock-
in-trade is liable to be taxed under the head "capital
gains".
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Tax Case Appeal Nos.248 to 252 of 2017
8.Whether on the facts and circumstances of the
case, the Income Tax Appellate Tribunal is right in law in
rejecting the claim of the Appellant that the income derived
in Malaysia constitutes business income, even when the
Appellant is systematically and continuously carrying on
business of purchase/sale of investments?
T.C.A.No.250 of 2017 :
1.Whether on the facts and circumstances of the
case, the Income Tax Appellate Tribunal is right in law in
holding that the income earned by Malaysian Branch of the
company is taxable in India and not taxable in Malaysia?
2.Whether on the facts and circumstances of the
case, the Income Tax Appellate Tribunal is right in law in
rejecting the claim of the Appellant that the income derived
in Malaysia constitutes business income, even when the
Appellant is systematically and continuously carrying on
business of purchase/sale of investments?
T.C.A.No.251 of 2017 :
1.Whether on the facts and in the circumstances of
the case the Income Tax Appellate Tribunal is right in law
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Tax Case Appeal Nos.248 to 252 of 2017
in holding that the income by way of interest had to be
classified as "income from other sources" and not "income
from business", even if assessee is the nonbanking
financial company and the interest income earned was out
of its investment activity?
2.Whether on the facts and in the circumstances of
the case the Income Tax Appellate Tribunal is right in law
in holding that the dividend income had to be classified as
"income from other sources" and not "income from
business"?
T.C.A.No.252 of 2017:
1.Whether on the facts and circumstances of the
case, the Income Tax Appellate Tribunal is right in law in
holding that the income earned by Malaysian Branch of the
assessee company is taxable in India and not taxable in
Malaysia?
2.Whether on the facts and circumstances of the
case, income from Malaysian Branch, should be
considered as part of "book profits" for the purpose of
section 115 JB of Income Tax Act?
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Tax Case Appeal Nos.248 to 252 of 2017
3.Whether on the facts and circumstances of the
case, the Income Tax Appellate Tribunal is right in law in
holding that the interest income is liable to be taxed under
the head "Other Sources"?
4.Whether on the facts and circumstances of the
case, the Income Tax Appellate Tribunal is right in law in
holding that the dividend income is liable to be taxed under
the head "Other Sources"?
5.Whether on the facts and circumstances of the
case, the Income Tax Appellate Tribunal is right in law in
rejecting the claim of the Assessee that the income derived
in Malaysia constitutes business income, even when the
Appellant is systematically and continuously carrying on
business of purchase/sale of investments?”
2. We have heard Ms.Sri Niranjani Srinivasan, learned counsel
appearing for the appellant/ assessee and Mr.Karthik Ranganathan,
learned Senior Standing Counsel for the respondent/Revenue.
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Tax Case Appeal Nos.248 to 252 of 2017
3. 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
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.
4. We are informed by the learned counsel for the appellant/
assessee that the assessee had already been issued with Form-3 on
27.01.2021 and the learned counsel for the appellant seeks permission of
this Court to withdraw the above appeals.
5. In the light of the fact that the assessee has already availed the
benefit under the Act, no useful purpose would be served in keeping
these appeals pending. At the same time, the interest of the assessee in
the event the order to be passed by the Department under the Act is not
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Tax Case Appeal Nos.248 to 252 of 2017
in favour of the assessee, is to be safeguarded. Accordingly, the Tax
Case Appeals stand dismissed as withdrawn on the ground that the
assessee has already been issued with Form-3 and the Department shall
process the application at the earliest in accordance with the said Act and
communicate the decision to the assessee at the earliest. As observed, the
assessee is given liberty to restore these appeals in the event the ultimate
decision to be taken on the declaration filed by the assessee under
Section 4 of the said Act is not in favour of the assessee. If such a prayer
is made, the Registry shall entertain the prayer without insisting upon
any application to be filed for condonation of delay in restoration of
these appeals and on such request made by the assessee by filing a
Miscellaneous Petition for Restoration, the Registry shall place such
petition before the Division Bench for orders.
6. With this observation, these Tax Case Appeals stand dismissed
as withdrawn with the aforementioned liberty, and consequently, the
Substantial Questions of Law are left open. No costs.
[M.D., J.] [R.H., J.]
12.07.2021
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Tax Case Appeal Nos.248 to 252 of 2017
Index : Yes/No
Internet : Yes
To
1. Income Tax Appellate Tribunal, Chennai "A" Bench
2.The Asst. Commissioner of Income Tax,
Company Circle IV(1),
Chennai – 600 034.
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Tax Case Appeal Nos.248 to 252 of 2017
M. DURAISWAMY, J.
and
R. HEMALATHA, J.
mkn
T.C.A. Nos.248 to 252 of 2017
12.07.2021
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