Madras High Court
The Commissioner Of Income Tax vs M/S. Ttk Protective Devices ... on 23 August, 2022
T.C.A.No.37 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 23.08.2022
CORAM :
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
AND
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
T.C.A.No.37 of 2019
The Commissioner of Income Tax,
Corporate Circle 3 (1),
Chennai. ...
Appellant
Versus
M/s. TTK Protective Devices Limited,
No.6, Cathedral Road,
Chennai 600 006,
PAN: AABCT1 184G ... Respondent
Appeal preferred under Section 260A of the Income Tax Act, 1961,
against the order dated 25.05.2018 passed by the Income Tax Appellate
Tribunal, “D” Bench, Chennai, in I.T.A.No.2405/Chny/2017.
For Appellant : Mr.M.Swaminathan,
Senior Standing Counsel
Mrs.V.Pushpa, Standing Counsel
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T.C.A.No.37 of 2019
For Respondent : Mr.R.Venkatanarayanan
for M/s. Subbaraya Aiyar
JUDGMENT
(Judgment of the Court was delivered by R.MAHADEVAN, J.)
This tax case appeal has been filed by the appellant / Revenue,
challenging the order dated 25.05.2018 passed by the Income Tax Appellate
Tribunal, “D” Bench, Chennai, in I.T.A.No.2405/Chny/2017, relating to the
assessment year 2012-13.
2.By order dated 11.01.2019, this court admitted the aforesaid tax case
appeal on the following substantial questions of law:
“(i) Whether the Tribunal was right in holding that the logo
charges paid by the assessee company to its group concern for
licence to use the trade mark name and monogram 'ttk' by paying
logo charges at 2% of the gross sale was revenue expenditure and
not capital?
(ii) Whether the Tribunal was right in holding that the
payments made by the assessee company in the shape of technical
knowhow fee by way of royalty at 2% of the gross sale was revenue
expenditure and not capital?
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T.C.A.No.37 of 2019
(iii) Is not the finding of the Tribunal bad on the material
place by holding that the logo charges were revenue expenditure
especially as per Clause (5)(2)(a) of MOU between TTK Group
clearly shows that LRC Products Limited was the one, which issues
order for sales and therefore, the payment for technical knowhow
fees is expenditure of capital in nature? And
(iv) Whether the Tribunal is right in holding that investments
made in subsidiary companies for business consideration, which are
capable of fetching exempt income are not liable for disallowance
under Section 14A when the provisions of Section 14A as well as
Rule 8D do not provide for any such exception?"
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 appeal 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.
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T.C.A.No.37 of 2019
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 question of law for determination in an appropriate case.
No costs.
(R.M.D., J.) (M.S.Q., J.)
23.08.2022
Internet : Yes
Index : Yes / No
av
To
1. The Income Tax Appellate Tribunal,
“D” Bench, Chennai.
2. The Commissioner of Income Tax,
Corporate Circle 3 (1),
Chennai.
3. The Deputy Commissioner of Income-tax,
Corporate Circle- 3 (1), New Block,
4th Floor, 121, Mahatma Gandhi Road,
Nungambakkam, Chennai 600 034.
4. The Commissioner of Income Tax (Appeals)- 11 ,
Chennai.
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T.C.A.No.37 of 2019
R. MAHADEVAN, J.
and
MOHAMMED SHAFFIQ, J.
av
T.C.A.No.37 of 2019
23.08.2022
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