Madras High Court
Commissioner Of Income Tax vs M/S. Chettinad Morimura ... on 26 July, 2021
T.C.A.Nos. 525 & 526 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE: 26.07.2021
CORAM:
THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE R.HEMALATHA
T.C.A.Nos.525 & 526 of 2016
Commissioner of Income Tax,
Chennai. .. Appellant in both TCAs
v.
M/s. Chettinad Morimura Semiconductor
Material Pvt. Ltd.,
37, Old Mahabalipuram Road,
Kazhipattur Village, Padur Post,
Kanchipuram District - 603 103
PAN : AAACC2461Q ... Respondent in both
TCAs
T.C.A. No.525 /2016 : Appeal preferred under Section 260A of the
Income Tax Act, 1961, against the order of the Income Tax Appellate
Tribunal, Madras, "B" Bench, dated 19.02.2014 in
I.T.A.No.2080/Mds/2013 for the Assessment Year 2005-2006.
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T.C.A.Nos. 525 & 526 of 2016
T.C.A. No.526/2016 : Appeal preferred under Section 260A of the
Income Tax Act, 1961, against the order of the Income Tax Appellate
Tribunal, Madras, "B" Bench, dated 19.02.2014 in
I.T.A.No.2081/Mds/2013 for the Assessment Year 2006-2007.
For Appellant : Mr.T.Ravikumar
(in both TCAs) Senior Standing Counsel
For Respondents : Mr. M. Kaushik
(in both TCAs) for Mr. S.Sridhar
COMMON JUDGMENT
(Judgment was delivered by M. DURAISWAMY, J.)
We have heard Mr.T.Ravikumar, learned Senior Standing
Counsel for the appellant/Revenue and M. Kaushik, learned counsel for
the respondent/assessee.
2. These appeals, filed by the Revenue under Section 260A of the
Income Tax Act, 1961 (for short, the Act) are directed against the order
dated 19.02.2014 made respectively in ITA.Nos.2080/Mds/2013 &
2081/Mds/2013 on the file of the Income Tax Appellate Tribunal,
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T.C.A.Nos. 525 & 526 of 2016
Chennai, ''B'' Bench (for brevity, the Tribunal) for the Assessment Years
2005-2006 and 2006-2007.
3. The appeals were admitted on the following substantial
questions of law:
T.C.A. No.525 /2016 :
“ (i) Whether in the facts and in the
circumstances of the case, the Tribunal was right in
law in holding that the expenditure incurred on
repairs and maintenance of community has
constructed for the villagers in the area was a revenue
expenditure eligible for deduction in the hands of the
assessee, when the fact remains that
construction/maintenance of community hall is not
related to the business of the assessee and therefore,
not eligible for deduction?
(ii) Whether in the facts and in the
circumstances of the case, the Tribunal was right in
holding that the expenditure incurred towards filling,
levelling and developing of safety area of community
hall constructed for villagers in the area is eligible for
deduction in the hands of the assessee as revenue in
nature when the construction/maintenance of
community hall is not related to the business of the
assessee and therefore, not eligible for deduction?
(iii) Whether in the facts and in the
circumstances of the case, the Tribunal was right in
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T.C.A.Nos. 525 & 526 of 2016
overlooking the fact that in any event the expenditure
incurred on the community hall and development of
safety area amounted to addition of capital asset and
therefore, the expenditure was not revenue in nature?
(iv) Whether in the facts and in the
circumstances of the case, the Tribunal was right in
holding that the expenditure incurred towards raw
material storage yard is revenue expenditure when
the said expenditure was incurred for total
replacement of the existing storage yard and not for
mere setting right defects of existing yard and
therefore, oughtto have been treated as capital
expenditure resulting in an asset/benefit of enduring
nature?
T.C.A. No.526 /2016 :
“ (i) Whether in the facts and in the
circumstances of the case, the Tribunal was right in
holding that the expenditure incurred towards filling,
levelling and developing of safety area of community
hall constructed for villagers in the area is eligible for
deduction in the hands of the assessee as revenue in
nature when the construction/maintenance of
community hall is not related to the business of the
assessee and therefore, not eligible for deduction?
(ii) Whether in the facts and in the
circumstances of the case, the Tribunal was right in
overlooking the fact that in any event the expenditure
incurred on development of safety area amounted to
addition of capital asset and therefore,the expenditure
was not revenue in nature?
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T.C.A.Nos. 525 & 526 of 2016
(iii) Whether in the facts and in the
circumstances of the case, the Tribunal was right in
holding that the expenditure incurred towards raw
material storage yard is revenue expenditure when
the said expenditure was incurred for total
replacement of the existing storage yard and not for
mere setting right defects of existing yard and
therefore, ought to have been treated as capital
expenditure resulting in an asset/benefit of enduring
nature? "
4. The learned Senior Standing Counsel appearing for the
appellant submits that the above appeals are 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 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 Appeals
are dismissed on account of the Low Tax Effect. The substantial
questions of law framed are left open. In the event the tax effect in all
these cases are 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
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T.C.A.Nos. 525 & 526 of 2016
appeals to be heard and decided on merits. No costs.
[M.D., J.] [R.H., J.]
Index : Yes/No 26.07.2021
Internet : Yes
Rj
To
The Income Tax Appellate Tribunal,
Chennai,"B" Bench
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T.C.A.Nos. 525 & 526 of 2016
M. DURAISWAMY, J.
and
R.HEMALATHA,J
Rj
T.C.A.Nos. 525 & 526 of 2016
26.07.2021
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