COMMISSIONER OF INCOME TAX vs. M/S.TULSYAN NEC LTD.,

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TCA/2/2016HC Madras16 March 2020Bench: Hon`ble Dr Justice VINEET KOTHARI4 pages
AI SummaryDismissed

What did the High Court hold?

The High 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). In the present case, the tax effect was stated to be less than this monetary limit. Consequently, the Revenue's appeal was dismissed as not pressed. The Court explicitly stated that the substantial questions of law were left open for determination in an appropriate case, meaning the merits of the disallowance were not adjudicated.

What were the facts?

The Revenue, Commissioner of Income Tax-II, Chennai, filed a Tax Case Appeal under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal (ITAT), 'B' Bench, Chennai, dated October 13, 2010. The appeal concerned ITA No.1420/Mds/2009, relating to the assessment year 2003-04. The dispute involved the disallowance of interest on a loan for construction amounting to Rs.47,13,216. The High Court of Judicature at Madras heard the appeal.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Income Tax Tribunal was right in law in holding that the disallowance of interest on loan for construction amounting to Rs.47,13,216/- was to be allowed for the assessment year 2003-04? (Question of law). The Revenue contended that the ITAT's decision was incorrect. The judgment does not record specific arguments from the Revenue regarding the merits of the disallowance. The Respondent assessee, M/s.Tulsyan NEC Ltd., presumably argued in favor of the ITAT's order allowing the interest deduction. The judgment does not record specific arguments from the assessee.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Order in TCA No.2 of 2016 (CIT -Vs- M/s.Tulsyan NEC Ltd.) dated 16.03.2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 16.03.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.2 of 2016 The Commissioner of Income Tax-II Central IV, Chennai ... Appellant Vs. M/s.Tulsyan NEC Ltd 3, Apex Plaza, MG Road Nungambakkam, Chennai-34. .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the common order of the Income Tax Appellate Tribunal 'B' Bench, Chennai dated 13.10.2010 in ITA No.1420/Mds/2009. For Appellant : Ms.K.G.Usha Rani Junior Standing Counsel

For Respondent : Mr.V.S.Jayakumar

J U D G M E N T (Judgment of the Court was 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, 'B' Bench, Chennai, by raising the following substantial question of law: Page 1 of 4 http://www.judis.nic.in Order in TCA No.2 of 2016 (CIT -Vs- M/s.Tulsyan NEC Ltd.) dated 16.03.2020 “ Whether on the facts and circumstances of the case, the Income Tax Tribunal was right in law in holding that disallowance of interest on loan for construction amounting to Rs.47,13,216/- was to be allowed for the assessment year 2003-04?”

2.

When the matter was taken up for hearing, the learned Standing Counsel 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). 3. In the instant cases, 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 an appropriate case. (V.K.,J.) (R.S.K.,J.) 16.03.2020 KST Page 2 of 4 http://www.judis.nic.in Order in TCA No.2 of 2016 (CIT -Vs- M/s.Tulsyan NEC Ltd.) dated 16.03.2020 To Income Tax Appellate Tribunal 'B' Bench,Chennai. Page 3 of 4 http://www.judis.nic.in Order in TCA No.2 of 2016 (CIT -Vs- M/s.Tulsyan NEC Ltd.) dated 16.03.2020 DR.VINEET KOTHARI, J. AND R.SURESH KUMAR, J. KST T.C.(A) No.2 of 2016 16.03.2020 Page 4 of 4 http://www.judis.nic.in

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