SHRI SUDHAKAR NATARAJAN vs. THE DEPUTY COMMISSIONER OF I

TCA.No.204 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15.03.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Ms.Justice R.N.MANJULA Tax Case Appeal No.204 of 2021 Shri Sudhakar Natarajan ...Appellant Vs The Deputy Commissioner of Income Tax, Corporate Circle - 1(1), Income Tax Department, No.121, Mahatma Gandhi Road, Chennai - 600 034. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 25.04.2019 made in ITA.No.2205/Chny/2017 on the file of the Income Tax Appellate Tribunal, 'B' Bench, Chennai for the assessment year 2014-15. For Appellant: Mr.A.S.Sriraman For Respondent: Mrs.R.Hemalatha, SSC 1/6 https://www.mhc.tn.gov.in/judis/ TCA.No.204 of 2021 JUDGMENT (Delivered by

T.S.Sivagnanam,J

) This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 25.04.2019 made in ITA.No.2205/Chny/2017 on the file of the Income Tax Appellate Tribunal, 'B' Bench, Chennai ('the Tribunal' for brevity) for the assessment year 2014-15. 2. The appellant-assessee has raised the following substantial questions of law for consideration: "1. Whether the provisions of Section 37(1) of the Act permit the claim for revenue/business expenditure by way of contribution/donation paid to an entity/trust, which was not approved for the purposes of Section 35(1)(ii) of the Act, which fact was unearthed by CBDT at a later point in time in the computation of taxable total income? 2. Whether the claim for revenue/business expenditure u/s 37(1) of the Act being the claim made alternatively under bonafide circumstances in the light of the CBDT's letter/circular dated 14.12.2018 in negating the Appellant's claim for 2/6 https://www.mhc.tn.gov.in/judis/ TCA.No.204 of 2021 weighted deduction u/s 35(1)(ii) of the Act is justified in law? 3. Whether the Appellate Tribunal is correct in law in rejecting the claim for business expenditure u/s 37(1) of the Act by erroneously distinguishing the concept of donation with the concept of expenditure in the Act while the claim for donation u/s 35(1)(ii) of the Act should be equated to a claim of business/revenue expenditure within the scope of Section 35(1)(ii) of the Act? 4. Whether the Appellate Tribunal is justified in not adjudicating the second alternative claim for revenue/business loss pertaining to the contribution/donation to the disputed entity/trust within the scope of Section 28 of the Act? 5. Whether the date of transfer of shares should be reckoned based on the share purchase agreement or based on the share transfer form in statutory transfer Form No.7B and Form FC-TRS filed before the Reserve Bank of India? 6. Whether the Appellate Tribunal is correct in ignoring the evidence filed to demonstrate the date of transfer and setting aside the said issue to the file of the Respondent/Assessing Officer with a 3/6 https://www.mhc.tn.gov.in/judis/ TCA.No.204 of 2021 direction to re-examine the entire issue once again which led to the perversity in recording the findings of facts in para 5 of the impugned order?" 3. We have heard Mr.A.S.Sriraman, learned counsel for the appellant-assessee and Mrs.R.Hemalatha, learned Senior Standing Counsel appearing for the respondent-Revenue. 4. The learned counsel for the appellant-assessee submits that the assessee has already filed the declaration/undertaking under the Vivad Se Vishwas Scheme and is awaiting orders to be passed in Form No.3. 5. In the light of the subsequent event, the Competent Authority shall process the application/declaration in accordance with the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) and pass appropriate orders as expeditiously as possible. The assessee is given liberty to restore this appeal in the event the ultimate decision to be taken on the declaration filed by the assessee under Section 4 of the said Act is not in favour of the assessee. If such a prayer is made, the Registry shall entertain the prayer without 4/6 https://www.mhc.tn.gov.in/judis/ TCA.No.204 of 2021 insisting upon any application to be filed for condonation of delay in restoration of the appeal and on such request made by the assessee by filing a miscellaneous petition for restoration, the Registry shall place such petition before the appropriate Division Bench for orders. 6. The tax case appeal stands disposed of with the aforementioned liberty and consequently, the substantial questions of law framed are left open. No costs. (T.S.S.,J.) (R.N.M.,J.) 15.03.2021 Index:Yes/No Internet:Yes/No hvk To 1. The Income Tax Appellate Tribunal, 'B' Bench, Chennai. 2. The Deputy Commissioner of Income Tax, Corporate Circle - 1(1), Income Tax Department, No.121, Mahatma Gandhi Road, Chennai - 600 034. 5/6 https://www.mhc.tn.gov.in/judis/ TCA.No.204 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J hvk TCA.No.204 of 2021 15.03.2021 6/6 https://www.mhc.tn.gov.in/judis/