COMMISSIONER OF INCOME TAX vs. SUPER SALES INDIA LIMITED

PDF · subscribers
TCA/18/2023HC Madras15 October 2024Bench: Honourable Mr Justice R. SURESH KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. Instead, the appeal was dismissed as being covered under the Low Tax Effect, as per Circular No. 9/2024 dated 17.09.2024, as submitted by the Revenue. The Court explicitly stated that the substantial questions of law arising in this appeal are kept open to be decided at a later point in time. Therefore, there was no finding on the allowability of depreciation on foreign exchange fluctuation loss or the classification of capital expenditure under Sections 36 or 37 of the Income Tax Act. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax, Corporate Circle – 1, Coimbatore, has filed an appeal under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal (ITAT), Chennai, dated 27.09.2022. The ITAT's order was passed in I.T.A.No.2093/CHNY/2017. The assessee is Super Sales India Limited. The appeal concerns assessment years not explicitly stated in the provided text. The core dispute revolves around the ITAT's decision to allow depreciation on foreign exchange fluctuation loss related to a foreign currency term loan used for purchasing a windmill, which the assessee had capitalized. The amount in dispute is Rs. 2,19,94,875/-.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether, on the facts and circumstances of the case, the ITAT was right in allowing depreciation amounting to Rs. 2,19,94,875/- on account of foreign exchange fluctuation loss relating to a foreign currency term loan availed for the purchase of a windmill, which was capitalized by the assessee in its books of accounts. 2. Whether, on the facts and circumstances of the case and in law, the ITAT was justified in allowing the appeal of the assessee without appreciating that capital expenditure incurred by the assessee for the purchase of a windmill cannot be treated as expenditure under Section 36 or Section 37 of the Income Tax Act. Contentions of the Revenue: The Revenue argued that the matter is covered under the Low Tax Effect as per Circular No. 9/2024 dated 17.09.2024. The Revenue did not present arguments on the merits of the substantial questions of law.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 36,Section 37

AI-generated summary — verify with the full judgment below

T.C.A.No.18 of 2023 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15.10.2024 CORAM : THE HONOURABLE MR.JUSTICE R. SURESH KUMAR AND THE HONOURABLE MR.JUSTICE C. SARAVANAN T.C.A.No.18 of 2023 Commissioner of Income Tax Corporate Circle – 1, Coimbatore. .. Appellant Vs. Super Sales India Limited 34-A, Kamraj Road Coimbatore 641 018 PAN: AADCS 0650 A .. Respondent Prayer: Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order of Income Tax Appellate Tribunal “D” Bench,

Chennai

dated

27.09.2022

passed

in I.T.A.No.2093/CHNY/2017. For the Appellant : Mr.Karthik Ranganathan Senior Standing Counsel For the Respondent : Mr.R.Venkatanarayanan for M/s.Subbaraya Aiyar Padmanabhan JUDGMENT (Order of the Court was made by R.SURESH KUMAR, J.) The present tax case appeal was admitted on 11.01.2023 by this Court on the following substantial questions of law:- Page 1 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.18 of 2023 "1. Whether on the facts and circumstances of the case, the ITAT was right in allowing depreciation amounting to Rs.2,19,94,875/- on account of foreign exchange fluctuation loss relating to foreign currency term loan availed for purchase of windmill and the same was capitalized by the assessee its books of accounts? 2. Whether on the facts and circumstances of the case and in law, the ITAT was justified in allowing the appeal of the assessee without appreciating the fact that capital expenditure incurred by the assessee for purchase of windmill cannot be treated as expenditure u/s. 36 or 37 of the Income Tax Act?" 2. It is submitted by the learned Senior Standing Counsel appearing for the appellant Revenue that this matter is covered under the Low Tax Effect as per the recent Circular dated 17.09.2024, in Circular No.9/2024. Page 2 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.18 of 2023 3. Hence, this appeal stands dismissed, as covered under the low tax effect and the substantial questions of law arising in this appeal are kept open to be decided at the later point of time. There shall be no order as to costs. (R.S.K., J.) (C.S.N, J) 15.10.2024 Neutral Citation:Yes/No drm Page 3 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.18 of 2023 R. SURESH KUMAR, J. AND C. SARAVANAN

, J.

(drm) T.C.A.No.18 of 2023 15.10.2024 Page 4 of 4 https://www.mhc.tn.gov.in/judis

More judgments on Section 260-A

All 2,570 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →