The Commissioner Of Income Tax vs M/S. Abaqus Engineering India ...
2022 Latest Caselaw 14529 Mad

                                                                                     TCA.No.124 of 2016


                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                 DATED : 16.08.2022

                                                        CORAM

                                  THE HONOURABLE MR. JUSTICE R. MAHADEVAN
                                                            and
                         THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ

                                                T.C.A.No. 124 of 2016


                The Commissioner of Income Tax,
                Chennai                                                         ..      Appellant
                                                        Versus

                M/s. Abaqus Engineering India Pvt. Ltd.,
                (now known as Dassault Systems P. Ltd.)
                10th Floor, ASV N Ramanas Tower,
                37 & 38, Venkatramana Road,
                T.Nagar,
                Chennai 600 017.                                                .. Respondent

                          Tax Case Appeal filed under Section 260-A of the Income Tax Act,
                1961 against the order of the Income Tax Appellate Tribunal Madras “B”
                Bench, dated 16.09.2011 passed in I.T.A.No.1702/Mds/2010 in respect of
                assessment year 2006-07.


                                        For Appellant   :    Mr. T. Ravikumar
                                                             Standing Counsel

                                        For Respondent : Mr.Sandeep Bagmar

                1/4

https://www.mhc.tn.gov.in/judis
                                                                                           TCA.No.124 of 2016




                                                         JUDGMENT

(Judgment of the Court was delivered by R. MAHADEVAN, J.)

This Tax Case Appeal has been filed by the appellant / revenue,

questioning the correctness of the order dated 16.09.2011 passed by the

Income Tax Appellate Tribunal Madras “B” Bench, in ITA.

No.1702/Mds/2010 for the assessment year 2006-07.

2. On 08.03.2016, this tax case appeal is admitted by this Court on the

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 disallowance under section 40(a)(i) of the Income Tax Act on the amount paid to Abaqus Inc without deduction of tax at source is to be allowed? And

2. Whether the assessee, who sold the license version of software product developed by the parent company, is to be treated as royalty payment made to non resident and covered under section 9(1)(vi) of the Income Tax Act?”

https://www.mhc.tn.gov.in/judis TCA.No.124 of 2016

3. 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.

4. 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.]
                                                                           16.08.2022
                msr
                Index        : Yes / No

                To

The Income Tax Appellate Tribunal Madras “B” Bench, Chennai.

https://www.mhc.tn.gov.in/judis TCA.No.124 of 2016

R. MAHADEVAN, J.

and MOHAMMED SHAFFIQ, J.

msr

T.C.A.No. 124 of 2016

16.08.2022

https://www.mhc.tn.gov.in/judis