Madras High Court
The Commissioner Of Income Tax vs M/S.Indian Additives Ltd on 30 June, 2021
T.C.A.Nos.564 and 565 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 30.06.2021
CORAM
THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE R. HEMALATHA
T.C.A.Nos.564 and 565 of 2015
The Commissioner of Income Tax,
Chennai. ... Appellant
in all appeals
Vs.
M/s.Indian Additives Ltd.
Express Highway, Manali,
Chennai – 600 068. ... Respondent
in all appeals
Tax Case Appeals in T.C.A.Nos.564 and 565 of 2015 preferred
under Section 260A of the Income Tax Act, 1961, against the order of
the Income Tax Appellate Tribunal, Madras, “A” Bench, dated
06.09.2012 in I.T.A.Nos.1437/Mds/2012 and 1438/Mds/2012,
respectively for the Assessment Years 2003-04 and 2005-06 respectively.
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T.C.A.Nos.564 and 565 of 2015
For Appellant : Mr.Karthik Ranganathan
Senior Standing Counsel
in all appeals
For Respondent : Ms.Sri Niranjani Srinivasan
in all appeals
COMMON JUDGMENT
(Judgment was delivered by M.DURAISWAMY, J.)
We have heard Mr.Karthik Ranganathan, learned Senior Standing
Counsel for the appellant/Revenue and Ms.Sri Niranjani Srinivasan,
learned counsel for the respondent/assessee.
2.The above appeals, filed by the Revenue under Section 260A of
the Income Tax Act, 1961 (for short, the Act), are directed against the
order dated 06.09.2012 made in I.T.A.Nos.1437/Mds/2012 and
1438/Mds/2012, on the file of the Income Tax Appellate Tribunal,
Madras, “A” Bench (for brevity, the Tribunal) for the Assessment Years
2003-04 and 2005-06 respectively.
3.The above appeals were admitted on 18.08.2015 on the
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T.C.A.Nos.564 and 565 of 2015
following substantial questions of law:
“1.Whether on the facts and in the circumstances of
the case, the Income Tax Appellate Tribunal was right in
holding that the royalty payment effected by the assessee to
CHEVRON Oronite LLC, USA is revenue expenditure
overlooking Section 32(1)(ii) of the Income Tax Act, which
stipulated that such expenditure was to be considered as for
acquisition of intangible assets?
2.Whether on the facts and in the circumstances of
the case, the Income Tax Appellate Tribunal had enough
material to come to the conclusion that the disallowance of
royalty payment at 3.5% on the sales was to be allowed as
revenue expenditure? and
3.Whether on the facts and in the circumstances of
the case, the Income Tax Appellate Tribunal was right in
not considering the amendment under the Income Tax Act
wherein depreciation on intangible assets like license, trade
mark, etc., was allowable, which would clearly shows that
the payments could be considered as capital in nature and
not revenue?”
4.The learned Senior Standing Counsel for the appellant submits
that the above appeals are not pursued by the Revenue on account of the
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T.C.A.Nos.564 and 565 of 2015
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 these
cases is less than the threshold limit.
5.In the light of the said submissions, the above Tax Case Appeals
are 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 these cases 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 above appeals to be heard and decided on merits. No
costs.
[M.D., J.] [R.H., J.]
30.06.2021
mkn
Index : Yes/No
Internet : Yes
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T.C.A.Nos.564 and 565 of 2015
To
1.The Income Tax Appellate Tribunal,
Madras, “A” Bench.
2.The Commissioner of Income Tax,
Chennai.
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T.C.A.Nos.564 and 565 of 2015
M.DURAISWAMY, J.
and
R. HEMALATHA, J.
mkn
T.C.A.Nos.564 and 565 of 2015
30.06.2021
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