THE COMMISSIONER OF INCOME T vs. M/S.SAMSON FOUNDATIONS

T.C.A.No.199 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 23.08.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.199 of 2021 The Commissioner of Income Tax, Chennai. ... Appellant

Versus M/s. Samson Foundations, No.191, Demellow Road, Choolai, Chennai - 600 112. PAN : ADBFS 9862J ... Respondent

Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order dated 30.01.2020 passed by the Income Tax Appellate Tribunal, “B” Bench, Chennai, in I.T.A.No.2432/Chny/2018. For Appellant : Mr.T.Ravikumar Standing Counsel For Respondent : Mr.S.Sridhar

Page 1/5 https://www.mhc.tn.gov.in/judis T.C.A.No.199 of 2021 JUDGMENT (Judgment of the Court was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 30.01.2020 passed by the Income Tax Appellate Tribunal, “B” Bench, Chennai, in I.T.A.No.2432/Chny/2018, relating to the assessment year 2015-16.

2.By order dated 22.03.2021, this court admitted the aforesaid tax case appeal on the following substantial questions of law: “(i) Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the loss incurred by the assessee on fictitious transactions in penny stock was genuine, when no valid reason could be offered by the assessee for investment in such penny stock, which did not yield any dividend nor the annual reports of such companies show any major developments undertaken to show the improved financials of the company? (ii) Whether the Tribunal ought to have applied the decision of the Madras High Court in the case of Manish D.Jain (HUF) reported in 122 Taxman 180 (Mad.) and that of Ms.Tara Kumari in Page 2/5 https://www.mhc.tn.gov.in/judis T.C.A.No.199 of 2021 TCA.No.128 of 2019 dated 11.02.2019, which upheld the action of the Department in penny stock issues? and (iii) Whether, on the facts and circumstances of the case, the Tribunal was right in not following the order from the Co-ordinate Bench in the case of Smt.Rekha Jain in ITA.No.827/Chny/2019 dated 11.06.2019 and that of Harish Kumar (HUF) in ITA.No.3009/Chny/2018 wherein on the facts and circumstances of those cases, which are identical to the present case especially when there is no change in the circumstances for taking a different view?" 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 appeal 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, Page 3/5 https://www.mhc.tn.gov.in/judis T.C.A.No.199 of 2021 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

Index : Yes / No av To 1. The Income Tax Appellate Tribunal, “B” Bench, Chennai. 2. The Commissioner of Income Tax, Chennai. 3. The Assistant Commissioner of Income-tax, Non Corporate Circle 5 (1), Chennai. 4. The Commissioner of Income Tax (Appeals)- 5, Chennai. Page 4/5 https://www.mhc.tn.gov.in/judis T.C.A.No.199 of 2021 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. av T.C.A.No.199 of 2021 23.08.2022 Page 5/5 https://www.mhc.tn.gov.in/judis