COMMISSIONER OF INCOME TAX , KOLKATA - II , KOL vs. M/S. MCLEOD RUSSEL INDIA LTD

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ITA/69/2013HC CalcuttaWBCHCO003420201328 July 2025Bench: THE HON'BLE THE CHIEF JUSTICE T.S SIVAGNANAM,HON'BLE JUSTICE CHAITALI CHATTERJEE (DAS)2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal on the ground of low tax effect, as the total tax involved was below the threshold limit stipulated by the Central Board of Direct Taxes' circular. Consequently, the substantial questions of law raised by the Revenue were left open and not decided on merits. The operative direction was to dispose of the appeal on this procedural ground. No finding was reached on the allowability of cess on green leaf as an expenditure. The ratio decidendi is that appeals below a certain tax effect threshold, as per CBDT circulars, may be dismissed without adjudicating the substantial questions of law.

What were the facts?

The appeal was filed by the Revenue (Commissioner of Income Tax, Kolkata - II) under Section 260A of the Income Tax Act, 1961, challenging an order dated February 15, 2013, passed by the Income Tax Appellate Tribunal, Kolkata. The assessment year in question is 2007-08. The assessee is M/s. McLeod Russel India Ltd. The appeal was heard by the High Court at Calcutta. The Revenue presented one substantial question of law. The Court noted that the total tax involved in the appeal was below the threshold limit fixed by a circular issued by the Central Board of Direct Taxes.

What were the issues?

1. Whether on a true and proper interpretation of the Income Tax Act, cess on green leaf is an allowable expenditure when under the Income Tax Law agricultural income is exempted from Income Tax. The Revenue contended that cess on green leaf should not be allowed as an expenditure given the exemption of agricultural income. The judgment records no specific arguments from the assessee, M/s. McLeod Russel India Ltd. The Court also noted that the tax effect was below the prescribed threshold limit, which was a significant factor in its decision.

Which sections of the Income-tax Act were involved?

Section 260A,Section 115WE(3)

AI-generated summary — verify with the full judgment below

OD-5 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION [INCOME TAX] ORIGINAL SIDE

ITA/69/2013 COMMISSIONER OF INCOME TAX , KOLKATA - II , KOLKATA VS M/S. MCLEOD RUSSEL INDIA LTD

BEFORE : THE HON'BLE THE CHIEF JUSTICE T.S SIVAGNANAM -A N D- HON'BLE JUSTICE CHAITALI CHATTERJEE (DAS) DATE : 28th July, 2025. Appearance : Mr. Prithu Dudhoria, Adv. …for appellant.

The Court : - This appeal has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (the Act) challenging the order dated 15.02.2013 passed by the Income Tax Appellate Tribunal, “A” Bench, Kolkata (the Tribunal) in ITA No./288/Kol/2011 for the assessment year 2007-08. The revenue has raised the following substantial questions of law for consideration : “I. Whether on a true and proper interpretation of the Income Tax Act, cess on green leaf is an allowable expenditure when under the Income Tax Law agricultural income is exempted from Income Tax.”

We have heard Mr. Prithu Dudhoria, learned advocate for the appellant. As could be seen from the assessment order dated 31.12.2009 passed under Section 115WE(3) of the Act, the total tax involved in the instant appeal is below the threshold limit. If that be so, the revenue cannot pursue this matter any further as the tax effect is far below the threshold limit fixed by the circular issued by the Central Board.

2 Accordingly, the appeal stands disposed of on the ground of low tax effect. The questions of law suggested by the revenue are left open.

(T.S. SIVAGNANAM, CJ.)

(CHAITALI CHATTERJEE (DAS), J.)

SM/pkd. AR(CR)

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