PRINCIPAL COMMISSIONER OF IN vs. THENDIYAKAVO KOYAKUTTY HASSAN

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TCA/181/2021HC Madras30 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law on their merits. Instead, the Revenue brought to the court's attention CBDT Circular No. 17/2019, which mandates that appeals should not be filed or pursued if the tax effect is below Rs. 1,00,00,000/-. The Revenue submitted that the tax effect in the present appeal was less than this prescribed limit. Consequently, the High Court, in light of the Revenue's submission regarding the low tax effect and the applicable circular, dismissed the appeal as withdrawn. The court explicitly stated that the substantial questions of law were left open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax 2, filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order dated 06.03.2019 passed by the Income Tax Appellate Tribunal (ITAT) Madras “B” Bench. The appeal pertained to Assessment Year 2008-09 and concerned the assessee, Thendiyakavo Koyakutty Hassan. The High Court admitted the appeal on two substantial questions of law. Subsequently, during the hearing, the Revenue brought to the court's notice CBDT Circular No. 17/2019, which stipulates that appeals shall not be filed or pursued if the tax effect does not exceed Rs. 1,00,00,000/-. The Revenue submitted that the tax effect in this particular appeal was below this threshold.

What were the issues?

The High Court was to decide two substantial questions of law: 1. Whether the ITAT was correct in holding that crawler cranes fall under the category of 'Motor Lorries used in a business of running them on hire' and are thus eligible for depreciation at a higher rate of 30%? 2. Whether the ITAT was correct in not following the jurisdictional High Court's decision in CIT Vs. Shriram Transport Finance Co. Ltd. (254 ITR 558), which held that mobile cranes are items of machinery and not road transport vehicles? The Revenue argued that the ITAT's decision on depreciation for crawler cranes was incorrect and that the ITAT failed to follow the precedent set by the jurisdictional High Court. The judgment does not record specific arguments from the assessee regarding these issues, other than their appearance through counsel.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

TCA.No.181/2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.08.2022 CORAM

THE HONOURABLE MR. JUSTICE R. MAHADEVAN and THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.181 of 2021 Principal Commissioner of Income Tax 2 No.121, Mahatma Gandhi Road, Chennai 600 034.

.... Appellant Versus Thendiyakavo Koyakutty Hassan No.18/3A, Menambedu Road, Padi Mannupet, Chennai 600 050.

... Respondent Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal Madras “B” Bench, Chennai, dated 06.03.2019 passed in ITA No.1569/CHNY/2017 in respect of Assessment Year 2008-09. For Appellant : M/s.Karthik Ranganathan & Rajesh Standing Counsel For Respondent : Mr.N.V.Balaji 1/4 https://www.mhc.tn.gov.in/judis TCA.No.181/2021 JUDGMENT (Judgment of the Court was delivered by R. MAHADEVAN, J.) This Tax Case Appeal has been filed by the appellant / revenue, questioning the correctness of the order dated 06.03.2019 passed by the Income Tax Appellate Tribunal Madras “B” Bench in ITA No.1569/CHNY/2017 for the Assessment Year 2008-09. 2. On 15.03.2021, this tax case appeal is admitted by this Court on the following substantial questions of law; ' 1. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT is right in holding that the crawler cranes fall in the category “Motor Lorries used in a business of running them on hire” and are eligible for depreciation at higher rate of 30% ? and 2. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT is right in not following the jurisdictional High Court decision in the case of CIT Vs.Shriram Transport Finance Co.Ltd. 254 ITR 558 2/4 https://www.mhc.tn.gov.in/judis TCA.No.181/2021 (Madras) wherein it was held that Mobile Cranes is not road transport vehicle but an item of machinery? 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 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). It is also submitted that the tax effect in this appeal is less than the threshold limit. 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 questions of law for determination in an appropriate case. No costs. [R.M.D,J.] [M.S.Q., J.] 30.08.2022 msr

Index : Yes / No 3/4 https://www.mhc.tn.gov.in/judis TCA.No.181/2021 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. msr To 1. The Income Tax Officer, Corporate Ward-4(1), Chennai. 2. The Commissioner of Income Tax (Appeals)-8, Chennai. 3. The Income Tax Appellate Tribunal Madras “B” Bench, Chennai, T.C.A.No.181 of 2021 30.08.2022 4/4 https://www.mhc.tn.gov.in/judis

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