Madras High Court
The Commissioner Of Income Tax vs M/S. Chemplast Sanmar Limited on 30 November, 2021
Tax Case Appeal No.532 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 30.11.2021
CORAM :
THE HON'BLE MR. JUSTICE R. MAHADEVAN
AND
THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ
Tax Case Appeal No.532 of 2021
The Commissioner of Income Tax,
Chennai
...Appellant
-vs-
M/s. Chemplast Sanmar Limited,
9, Cathedri Road, Chennai 600 086. ...Respondent
Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961
against the order dated 28.10.2016 passed by the Income Tax Appellate
Tribunal, Madras “C” Bench, Chennai in I.T.A.No.985/Mds/2015.
For Appellant : Mr.T.R. Ravikumar
For Respondent : Mr. R. Venkata Narayanan for
M/s. Subbaraya Aiyar
1/4
https://www.mhc.tn.gov.in/judis
Tax Case Appeal No.532 of 2021
JUDGMENT
(Judgment was delivered by R. MAHADEVAN, J.)
This tax case appeal has been filed by the appellant / Revenue, calling in
question the correctness of the order dated 28.10.2016 passed by the Income
Tax Appellate Tribunal, 'C' Bench, Chennai, in I.T.A.No.985/Mds/2015
relating to the assessment year 2005-06 by raising the following substantial
questions of law:-
'(i) Whether on the facts and in the circumstances of the
case, the Tribunal was right in holding that payment made
towards non-compete fee is a revenue expenditure and not
capital?
(ii) Whether the Tribunal was correct in holding that non
compete fee paid is revenue in nature and not capital especially
when the Director's report, the auditor statement and the Notes
annexed thereunder does not whisper about non compete fee
payment to be made?
(iii) Whether on the facts and in the circumstances of the
case, the Tribunal was right in ignoring the fact that the non
compete agreement cannot stand in isolation and was part of the
agreement for take over the caustic soda business from Kothari
Petrochemicals which gave an enduring benefit to the Assessee
for a period of 10 years and therefore Capital in nature?'
https://www.mhc.tn.gov.in/judis
Tax Case Appeal No.532 of 2021
2. When the matter was taken up for consideration, the learned counsel
for the appellant / Revenue brought to the notice of this court the Circular
No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes,
wherein, it is stipulated that appeals shall not be filed/pursued by the
Department before the High Court in cases where the tax effect does not exceed
Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in
this appeal is less than the threshold limit.
3. In the light of the aforesaid submissions made by the learned counsel
for the appellant / Revenue, the present appeal, wherein, the tax effect is said to
be less than the monetary limit imposed, is dismissed as withdrawn, keeping
open the substantial questions of law for determination in an appropriate case.
No costs.
[R.M.D,J.] [M.S.Q, J.]
30.11.2021
Internet : Yes
Index : Yes / No
msr
https://www.mhc.tn.gov.in/judis
Tax Case Appeal No.532 of 2021
R. MAHADEVAN, J.
AND
MOHAMMED SHAFFIQ, J.
msr
To
Income Tax Appellate Tribunal, Madras “C” Bench,
Chennai
Tax Case Appeal No.532 of 2021
30.11.2021
https://www.mhc.tn.gov.in/judis
