THE COMMISSIONER OF INCOME T vs. M/S.SHRIRAM CAPITAL TRUST P

TCA/196/2015HC Madras23 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as withdrawn. The dismissal was based on the submission by the Revenue that the tax effect in the appeal was less than the threshold limit of Rs.1,00,00,000/- stipulated in CBDT Circular No.17/2019. The Court noted that the substantial question of law was kept open for determination in an appropriate case. Therefore, the High Court did not decide the substantial question of law on its merits. No costs were awarded. The operative direction was the dismissal of the appeal.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, Chennai, filed a Tax Case Appeal against an order dated 24.06.2011 passed by the Income Tax Appellate Tribunal (ITAT), 'A' Bench, Chennai. The appeal pertained to assessment year 2005-06. The High Court admitted the appeal on 22.07.2015, framing a substantial question of law concerning the allowability of a sum of Rs.1,06,61,349/- representing dues from Shriram Coffee and Tea Plantations Limited. The Revenue later 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 appeal was below this threshold.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that a sum of Rs.1,06,61,349/- relating to dues from Shriram Coffee and Tea Plantations Limited should be allowed, even though these advances were not in the course of money lending business but for entering into a new line of business in Coffee and Tea Plantations, and thus would constitute a capital loss and not a loss incurred in the course of money lending business? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. The Tribunal's decision, which allowed the sum, is implicitly supported by the assessee. Revenue's Contention: The Revenue argued that the sum of Rs.1,06,61,349/- represented a capital loss incurred in relation to a new business venture and not a loss from its money lending business, and therefore, should not be allowed as a deduction. However, the primary submission before the High Court was based on CBDT Circular No.17/2019 regarding the monetary limit for appeals.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.196 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 23.08.2022 CORAM THE HON'BLE Mr. JUSTICE R. MAHADEVAN AND THE HON'BLE Mr. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No.196 of 2015 The Commissioner of Income Tax Chennai

.. Appellant Vs. M/s.Shriram Capital Trust Pvt. Ltd. No.4, Mookambiga Complex Lady Desika Charry Road Mylapore, Chennai 600 004 .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 24.06.2011 passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai, in I.T.A.No.1518/Mds/2010. For Appellant : Mr.J.Narayanaswamy

Standing Counsel For Respondent : Mr.R.Sivaraman J U D G M E N T 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.196 of 2015 (Judgment was delivered by R. MAHADEVAN, J.) This tax case appeal has been filed by the appellant/Revenue, calling in question the correctness of the order dated 24.06.2011 passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai, in I.T.A.No.1518/Mds/2010, relating to the assessment year 2005-06. 2. By order dated 22.07.2015, this Court admitted the aforesaid tax case appeal on the following substantial question of law : “Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that a sum of Rs.1,06,61,349/- relating to dues from Shriram Coffee and Tea Plantations Limited are to be allowed even though the said amounts advances were not in the course of money lending business but for entering into a new line of business in Coffee and Tea Plantations relating to new business would be a capital loss and not a loss incurred in the course of money lending business?” 3. When the matter was taken up for consideration, the learned Standing Counsels 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 appeal shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.196 of 2015 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 Standing Counsels 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 question of law for determination in an appropriate case. No costs. [R.M.D,J.] [M.S.Q, J.] 23.08.2022 Internet : Yes gya To 1.The Income Tax Officer Company Circle VI(2), Chennai 2.The Commissioner of Income Tax (Appeals)-V Chennai 3.The Income Tax Appellate Tribunal 'A' Bench, Chennai R. MAHADEVAN, J. AND MOHAMMED SHAFFIQ, J. 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.196 of 2015 gya Tax Case Appeal No.196 of 2015 23.08.2022

4/4 https://www.mhc.tn.gov.in/judis

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