The Commissioner of Income Tax vs. M/s. Casa Grande Homes Pvt Ltd

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TCA/202/2024HC Madras12 November 2024Bench: Honourable Mr Justice R. SURESH KUMAR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The dismissal was based on a submission by the Revenue's counsel that the matter was covered under the 'Low Tax Effect' as per Circular No. 9/2024 dated 17.09.2024. Consequently, the substantial questions of law raised in the appeal were kept open to be decided at a later point in time. No specific finding was given by the High Court on the merits of the questions of law. The operative direction was to dismiss the appeal on the ground of low tax effect, with no order as to costs.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax - 1, Chennai, has filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Madras "A" Bench, dated 06.07.2022. The appeal pertains to the assessment year 2016-17 and concerns the assessee, M/s. Casa Grande Homes Pvt. Ltd. The dispute involves other expenses claimed by the assessee amounting to Rs. 5,15,44,310/-, and the applicability of ICDs-III regarding construction contracts. The High Court admitted the appeal on substantial questions of law.

What were the issues?

The High Court was asked to decide the following substantial questions of law: 1. Whether the Tribunal's reasoning and finding were perverse in allowing other expenses amounting to Rs. 51,54,310/-, by holding that indirect costs cannot be attributed to any specific project, especially when the assessee had only one project during the relevant period? 2. Whether the Tribunal's finding was perverse, considering that ICDs-III regarding construction contracts is applicable only from Assessment Year 2017-18 and not to the present Assessment Year 2016-17? The Revenue contended that the Tribunal's findings were perverse on both counts. The Revenue argued that the indirect costs should have been attributable to the single project undertaken by the assessee and that ICDs-III was not applicable for the assessment year in question. The judgment does not record specific arguments from the assessee's side regarding these points.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

T.C.A.No.202 of 2024 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 12.11.2024 CORAM : THE HONOURABLE MR.JUSTICE R. SURESH KUMAR AND THE HONOURABLE MR.JUSTICE C. SARAVANAN T.C.A.No.202 of 2024 Principal Commissioner of Income Tax - 1 Chennai. .. Appellant Vs. M/s.Casa Grande Homes Pvt. Ltd. NPL Devi, New No.111 Old No.59, L.B. Road, Tiruvanmiyur Chennai - 600 041. PAN: AAGCC1182Q .. Respondent Prayer: Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order of Income Tax Appellate Tribunal Madras “A” Bench dated 06.07.2022 passed in I.T.A.No.3491/CHNY/2019. For the Appellant : Mr.Karthik Ranganathan Senior Standing Counsel For the Respondent : Mr.A.S.Sriraman JUDGMENT (Order of the Court was made by R.SURESH KUMAR, J.) The present tax case appeal was admitted on 27.09.2024 on the following substantial questions of law:- Page 1 of 3 https://www.mhc.tn.gov.in/judis T.C.A.No.202 of 2024 "1. Is not the reasoning and finding of the Tribunal perverse by allowing other expenses claimed amounting to Rs.515,44,310/- holding that the indirect cost cannot be attributed to any specific project especially when Assessee had only one project during the relevant period? 2. Is not the finding of the Tribunal perverse especially when ICDs-III with regard to construction contract is applicable only with effect from AY 2017-18 and not to be present AY which is 2016-17?" 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. 3. Hence, this appeal stands dismissed, as covered under the low tax effect and the substantial questions of law raised 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) 12.11.2024 Neutral Citation:Yes/No drm Page 2 of 3 https://www.mhc.tn.gov.in/judis T.C.A.No.202 of 2024 R. SURESH KUMAR, J. AND C. SARAVANAN

, J.

(drm) T.C.A.No.202 of 2024 12.11.2024 Page 3 of 3 https://www.mhc.tn.gov.in/judis

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