Madras High Court
Commissioner Of Income Tax – 2 vs M/S.Igarashi Motors India Ltd on 2 March, 2021
T.C.A.No.721 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE: 02.03.2021
CORAM:
THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE T.V.THAMILSELVI
T.C.A.No.721 of 2016
Commissioner of Income Tax – 2,
No.121, Mahatma Gandhi Road,
Nungambakkam, Chennai. ... Appellant
Vs.
M/s.Igarashi Motors India Ltd.,
Plot No.B-12 to B-15,
Phase II, MEPZ SEZ, Tambaram,
Chennai – 600 045. ... Respondent
Appeal preferred under Section 260A of the Income Tax Act,
1961, against the order of the Income Tax Appellate Tribunal, Madras,
"D" Bench, dated 24.03.2016 in I.TA.No.878/Mds/2014 Assessment
Year 2009-10.
For Appellant : Mr.Karthick Ranganathan,
Senior Standing Counsel
For Respondent : Mrs.N.V.Lakshmi
for Mr.N.V.Balaji
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T.C.A.No.721 of 2016
JUDGMENT
(Judgment was delivered by M.DURAISWAMY, J.)
We have heard Mr.Karthick Ranganathan, learned Senior Standing
Counsel for the appellant/Revenue and Mrs.N.V.Lakshmi, learned
counsel for the respondent/assessee.
2.The appeal, filed by the Revenue under Section 260A of the
Income Tax Act, 1961 (for short, the Act) is directed against the order
dated 24.03.2016 made in I.TA.No.878/Mds/2014 on the file of the
Income Tax Appellate Tribunal, Chennai, "D" Bench (for brevity, the
Tribunal) for the Assessment Year 2009-10.
3.The appeal was admitted on 19.10.2016on the following
substantial questions of law:
“1)Whether on the facts and circumstances of
the case, the Appellate Tribunal was right and
justified in holding that investment made in sister
concerns are not liable for dis-allowance u/s 14A
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T.C.A.No.721 of 2016
when the provisions of the said Section as well as
Rule 8D does not provide for any such exception?
2)Whether on the facts and circumstances of
the case and in law, the Tribunal was justified in not
appreciating the fact that investment in shares of
sister concerns will also yield only dividend income
which is exempt from Income Tax and hence
provisions of Section 14A read with Rule 8D are
applicable?
3)Whether on the facts and circumstances of
the case and in law, the Tribunal was right and
justified in holding that Lucas TVS is not a
comparable case for transfer pricing study since it
has 25% related party transaction when in fact it had
less than 25% related party transaction?
4)Whether on the facts and circumstances of
the case and in law, the Tribunal was correct and
justified in holding that Lucas TVS is not a
comparable since they are functionally dissimilar
when both assessee and the said company are
engaged in manufacture and sale of DC micro motors
and sub-assemblies for DC motor for automobiles?
5)Whether on the facts and circumstances of
the case and in law, the Tribunal erred in holding that
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T.C.A.No.721 of 2016
Lucas TVS is not a comparable case for transfer
pricing study when assessee itself included such
company as a comparable case in subsequent
assessment years and that there is no significant
change in business operation of the comparable in
the present assessment year with that of the
subsequent assessment year?”
4.The learned Senior Standing Counsel for the appellant submits
that the above appeal is 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 these
cases are less than the threshold limit.
5.In the light of the said submissions, the above Tax Case Appeal
is 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 this case is above the threshold limit fixed in the said
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T.C.A.No.721 of 2016
Circular, liberty is granted to the Revenue to make a mention to this
Court to restore the appeal to be heard and decided on merits. No costs.
Index : Yes/No [M.D., J.] [T.V.T.S., J.]
Internet : Yes 02.03.2021
va
To
The Income Tax Appellate Tribunal, Chennai, "D" Bench
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T.C.A.No.721 of 2016
M.DURAISWAMY, J.
and
T.V.THAMILSELVI, J.
va
T.C.A.No.721 of 2016
02.03.2021
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