Madras High Court
Commissioner Of Income Tax vs Virtual Soft Systems on 8 March, 2021
T.C.A.No. 423 of 2012
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE: 08.03.2021
CORAM:
THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE T.V.THAMILSELVI
T.C.A.No. 423 of 2012
Commissioner of Income Tax,
Chennai. ... Appellant
v.
M/s. TVS Finance and Services Ltd.,
(Formerly known as Harita Finance Ltd.
Which was formerly known as TVS Lakshmi
Credit Ltd.)
Jayalakshmi Estates, 29(old No.8),
Haddows Road
Chennai – 600 006. ... Respondent
Appeal preferred under Section 260A of the Income Tax Act,
1961, against the order of the Income Tax Appellate Tribunal, Madras,
"A" Bench, dated 05.07.2012 in I.T.A.No.961/Mds/2012 for the
Assessment Year 1997-98
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T.C.A.No. 423 of 2012
For Appellant : Mr. M.Swaminathan
Senior Standing Counsel
and Mrs. V. Pushpa
For Respondent : Mr.Venkata Narayanan
JUDGMENT
(Judgment was delivered by M. DURAISWAMY, J.)
Challenging the order passed in I.T.A.No.961/Mds/2012 in respect
of the Assessment Year 1997-98 on the file of the Income Tax Appellate
Tribunal, Chennai,"A" Bench (for brevity, the Tribunal), the Revenue
has filed the above appeal.
2. The above appeal was admitted on the following substantial
question of law:
“ Whether on the facts and circumstances of
the case, the Tribunal was right in upholding that
the assessee was entitled to deduction under section
35D, on expenditure incurred for expansion of
capital base which is available only for an Industrial
undertaking even though the assessee is only a
finance company?”
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T.C.A.No. 423 of 2012
3. When the appeal is taken up for hearing, Mr. M.Swaminathan,
learned Senior Standing Counsel appearing for the appellant fairly
submitted that the question of law involved in the present appeal is
covered by the decision of the Hon'ble Division Bench of this Court
dated 03.01.2019 made in TCA Nos. 339 to 341 of 2011 [Commissioner
of Income Tax – I, Chennai. v. M/s.TVS Finance & Services Ltd.,
Chennai- ] wherein the Hon'ble Division Bench held as follows:-
" .............. 3. So far as the second substantial question
of law in T.C.(A) No.339 of 2011 and the substantial
question of law in T.C.(A) Nos.340 and 341 of 2011 are
concerned, they pertain to lease equalization charges. The
learned Senior Standing Counsel for the Revenue fairlys
tates that the said question has been decided against the
Revenue by the Hon'ble Supreme Court in the case of
Commissioner of Income Tax vs. Virtual Soft Systems
Ltd., (2018) 404 ITR 0409 (SC).
4.Accordingly, the said question is decided against
the Revenue and the appeals are dismissed as against the
said question of law, i.e., in respect of lease equalization
charges.
5.So far as the first substantial question of law in
T.C.(A) No.339 of 2011 is concerned, the Tribunal has
allowed the same on the ground that such expenses were
allowed in the assessment years 1990-91/1993-94 and 1/10
th of the same was allowed 8/5 years out of 10 years till the
assessment year 1996-97.
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T.C.A.No. 423 of 2012
6.In our considered view, the Tribunal should have
remanded the matter to the Assessing Officer to cause
verification and then decide the issue. Therefore, we are of
the view that the first substantial question of law in T.C.(A)
No.339 of 2011 is to be remanded to the Assessing Officer
for fresh consideration.
7.Accordingly, T.C.(A) No.339 of 2011 is partly
allowed, the finding rendered by the Tribunal, insofar as it
relates to the first substantial question of law, is set aside
and the matter is remanded to the Assessing Officer to take
a fresh decision on merits.
8.In respect of the second substantial question of law
in T.C.(A) No.339 of 2011 and the substantial question of
law in T.C.(A) Nos.340 and 341 of 2011, as stated above, is
answered against the Revenue, following the decision of the
Hon'ble Supreme Court in Virtual Soft Systems Ltd. (supra).
No costs."
4. Mr.Venkata Narayanan, learned counsel appearing for the
respondent also submitted that in view of the Judgment relied upon by
the learned Senior Standing Counsel appearing for the appellant, the
appeal should be partly allowed and the matter may be remitted back to
the Assessing Officer to take a fresh decision on merits.
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T.C.A.No. 423 of 2012
5. Having regard to the submissions made by the learned counsel
on either side, following the Judgment dated 03.01.2019 made in TCA
Nos. 339 to 341 of 2011,the finding rendered by the Tribunal is set aside
and the matter is remitted back to the Assessing Officer to take to take a
fresh decision on merits. The Tax Case Appeal partly allowed. No
costs.
[M.D., J.] [T.V.T.S., J.]
08.03.2021
Index : Yes/No
Internet : Yes
Rj
To
The Income Tax Appellate Tribunal,
Chennai,"A" Bench
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T.C.A.No. 423 of 2012
M. DURAISWAMY, J.
and
T.V. THAMILSELVI, J.
Rj
T.C.A.No. 423 of 2012
08.03.2021
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