PRINCIPAL COMMISSIONER OF vs. POINT TEXTILES (P) LTD.

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TCA/120/2018HC Madras27 March 2018Bench: Hon`ble Dr Justice VINEET KOTHARI4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. Instead, the Court noted a Circular instruction issued by the Central Board of Direct Taxes (CBDT) vide Circular No.17/2019, dated August 8, 2019. This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court if the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore only). As the tax effect in the present case was stated to be less than this monetary limit, the Revenue's appeal was dismissed as not pressed. The substantial questions of law were kept open for determination in appropriate cases. No costs were awarded.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax 2, Coimbatore, filed an appeal under Section 260A of the Income Tax Act, 1961, challenging an order of the Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai, dated October 28, 2016, in ITA No.749/Mds/2016. The appeal was against M/s. Point Textiles (P) Ltd. The dispute pertains to the assessment year(s) not explicitly stated in the provided text. The procedural history involves the Tribunal's order which is now under challenge by the Revenue. The amount in dispute is not specified.

What were the issues?

The Tribunal had to decide two substantial questions of law raised by the Revenue: 1. Whether the Tribunal erred in ignoring that income assessed under Section 68 cannot be classified under any head of income under Section 14 and therefore cannot be set off against losses under other heads, contrary to Section 71 of the Income Tax Act? 2. Whether the Tribunal's finding was perverse in holding that the revenue had not presented any decision other than those relied upon by the CIT(A) to controvert the jurisdictional High Court's decision in CIT vs. Chensing Ventures (291 ITR 258), without appreciating that the Assessing Officer relied on the Kerala High Court's decision in CIT vs. Sponge Iron Ltd (2015) (377 ITR 380), which was rendered later? Contentions: The Revenue argued that income assessed under Section 68 cannot be set off against losses under other heads as per Section 71. The Revenue also contended that the Tribunal overlooked the Assessing Officer's reliance on a later decision of the Kerala High Court in CIT vs. Sponge Iron Ltd. The Respondent (Assessee) relied on the decision of the jurisdictional High Court in CIT vs. Chensing Ventures.

Which sections of the Income-tax Act were involved?

Section 260A,Section 68,Section 14,Section 71

AI-generated summary — verify with the full judgment below

T.C.A.No.120 of 2018 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 09.09.2019 CORAM

THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case Appeal No.120 of 2018 Principal Commissioner of Income Tax 2 No.63, Race Course Road Coimbatore. .. Appellant Vs. M/s.Point Textiles (P) Ltd., R-37, R-38, G-7, G-8 & F-22 SIPCOT Industrial Growth Centre Perundurai. PAN:AAECP6116F .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai, dated 28.10.2016 made in ITA No.749/Mds/2016. For Appellant : Mr.T.R.Senthil Kumar Senior Standing Counsel assisted by Ms.K.G.Usha Rani Junior Standing Counsel For Respondent : Mr.R.Sivaraman 1/4 http://www.judis.nic.in T.C.A.No.120 of 2018 J U D G M E N T (Delivered by DR.VINEET KOTHARI,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, Madras 'C' Bench, Chennai, dated 28.10.2016, ITA No.749/Mds/2016, by raising the following substantial questions of law: "1. Whether the Tribunal erred in ignoring the fact the income assessed under Section 68 cannot be classified under any one of the heads of income under Section 14 of the Act, and hence cannot be set off against loss under other heads considering the specified provision of Section 71 of the Income Tax Act? 2.Is the findings of the Tribunal not perverse in holding that it did not find any infirmity in the order of the CIT(A) on the ground that the revenue had not brought any decision other that relied upon by the CIT(A) to controvert the decision of the jurisdictional High Court in the case of CIT vs. Chensing Ventures (291 ITR 258) without appreciating the fact that the Assessing Officer in the Statement of Facts filed before the ITAT and relied upon the decision of the Hon'ble 2/4 http://www.judis.nic.in T.C.A.No.120 of 2018 Kerala High Court in CIT vs. Sponge Iron Ltd (2015) (377 ITR 380) which was rendered much later?” 2. When the matter is taken up for hearing, the learned Senior Standing Counsel for the Department brought to our notice the Circular instruction issued by the Central Board of Direct Taxes vide Circular No.17/2019, dated 8th August 2019, 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 only). 3. In the instant case, the tax effect is said to be less than the monetary limit imposed and therefore, the Appeal filed by the Revenue is dismissed, as not pressed, keeping open the substantial questions of law for determination in appropriate cases. No costs. (V.K.,J.) (C.S.N.,J.) 09.09.2019 Index : Yes/No Internet : Yes/No kj 3/4 http://www.judis.nic.in T.C.A.No.120 of 2018 DR.VINEET KOTHARI, J. and C.SARAVANAN,J. kj To 1.M/s.Point Textiles (P) Ltd., R-37, R-38, G-7, G-8 & F-22 SIPCOT Industrial Growth Centre Perundurai. 2. Income Tax Appellate Tribunal Madras 'C' Bench, Chennai. TCA No.120 of 2018 09.09.2019 4/4 http://www.judis.nic.in

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