Madras High Court
Principal Commissioner Of Income Tax vs Cri Pumps Pvt Ltd on 23 October, 2024
Bench: R.Suresh Kumar, C.Saravanan
T.C.A.No.406 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 23.10.2024
CORAM
THE HON'BLE MR.JUSTICE R.SURESH KUMAR
AND
THE HON'BLE MR.JUSTICE C.SARAVANAN
Tax Case Appeal No.406 of 2017
Principal Commissioner of Income Tax
No.63, Race Course Road, Coimbatore. .... Appellant
Vs.
CRI Pumps Pvt Ltd
7/46-1 Keeranatham Road
Saravanamatti, Coimbatore -35.
PAN AAA CC 9497 N .... Respondent
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Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961
against the order of the Income Tax Appellate Tribunal, 'D' Bench Chennai,
dated 30/11/2016 in ITA.No.1012/Mds/2015.
For Appellant : Mr.Karthik Ranganathan
Senior Standing Counsel
For Respondent : Mr.A.S.Sriraman
JUDGMENT
(Delivered by R.SURESH KUMAR, J.)
This Tax Case Appeal has been filed by the Revenue calling in question
the correctness of the order passed by the Income Tax Appellate Tribunal,
Chennai by raising the following substantial questions of law:
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1. Whether on the facts and circumstances of the case,
the ITAT is justified in allowing the royalty payment
when the transfer of trade mark "CRI" was not
allowed during the merger proceedings before the
Hon'ble High Court and which was subsequently
transferred from CRI Industries P Ltd., to CRI
Amalgamations P Ltd through a family arrangement
for a meager amount of Rs.1000/-?
2. Whether on the facts and circumstances of the case,
the ITAT is justified in allowing the royalty payment,
when the value of the CRI Trade Mark as fixed by
the directors of the transferor company was low and
the payment made to the holding company as royalty
for using the trade mark was excessive and
unreasonable having regard to the fair market value
of the trade mark itself?
3. Whether on the facts and circumstances of the case,
the Hon'ble ITAT is justified in not considering the
Section 40A(2)(a) and that there is a violation of
Section 40A(2)(b) of the Income Tax Act irrespective
of the fact that the receipt has offered the same to
tax?
2. It is brought to our notice by the learned Standing Counsel for the
appellant Revenue that in the instant case, as per the CBDT's Circular No.9 of
2024 dated 17.09.2024 the tax effect is said to be less than the monetary limit
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imposed and therefore, the appeal can be disposed of, keeping the substantial
questions of law raised in this appeal open for adjudication at a later point of
time.
3. Recording the aforesaid submission made by the learned Standing
Counsel for the appellant Revenue, this Tax Case Appeal is dismissed for low
tax effect, keeping open the substantial questions of law for adjudication at
appropriate stage. No costs.
(R.S.K.,J.) (C.S.N.,J.)
23.10.2024
NCS : Yes/No
KST
To
The Income Tax Appellate Tribunal
'D' Bench, Chennai.
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R.SURESH KUMAR, J.
AND
C.SARAVANAN, J.
KST
23.10.2024
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