THE COMMISSIONER OF INCOME T vs. RENTOKIL INDIA PVT LTD

TCA.Nos.212 & 213 of 2020 In the High Court of Judicature at Madras Dated : 05.08.2020 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal Nos.212 & 213 of 2020 The Commissioner of Income Tax, Chennai ...Appellant in both Appeals Vs M/s.Rentokil India Pvt Ltd., 105, 4th Floor, Sreeta Terrace 1st Main Road, Gandhi Nagar, Adyar, Chennai 600 020 PAN : AADCR7629E ...Respondent in both Appeals COMMON PRAYER: APPEALS under Section 260A of the Income Tax Act, 1961 against the order dated 26.07.2018 made in ITA.No.444&445/chny/2018 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench for the assessment years 2010-11 & 2014-15. For Appellant in both Appeals: Ms.R.Hemalatha Senior Standing Counsel For Respondent in both Appeals: Mr.S.P.Chidambaram 1/6 http://www.judis.nic.in TCA.Nos.212 & 213 of 2020 Judgment was delivered by

T.S.Sivagnanam,J

We have heard Ms.R.Hemalatha, learned Senior Standing Counsel appearing for the appellant – Revenue. 2. These appeals, filed by the Revenue under Section 260A of the Income Tax Act, 1961 is directed against the order dated 26.07.2018 made in ITA.Nos.444&445/chny/2018 on the file of the Income Tax Appellate Tribunal, 'B' Bench, Chennai for the assessment years 2010-11 & 2014-15. 3. The appeals are admitted on the following substantial questions of law: T.C.A.No.212/2020: “1.Whether the Tribunal was right in allowing the claim of depreciation on customer list on entities acquired through business transfer agreements entered between the assessee company and third party entities when Section 32 of the Income Tax Act, 1961, does not include customer list as either tangible asset or intangible 2/6 http://www.judis.nic.in TCA.Nos.212 & 213 of 2020 asset, eligible for depreciation claim? 2.Whether the claim of depreciation on customer list entered through business transfer agreement between the assessee and other entities is to be allowed even if it is not binding or mandatory on the part of the customers of acquired entities and that no agreement or arrangement of an enduring nature has been entered into by the assessee with the customers? 3.Whether on the facts and in the circumstances of the case, the Tribunal was right in allowing the claim of depreciation on customer lists when the fact remains that as evident from the business transfer agreement through which the assessee had acquired the business of some other entities, there is a non compete clause in the agreements entered and therefore no depreciation is allowable?” T.C.A.No.212/2020: 3/6 http://www.judis.nic.in TCA.Nos.212 & 213 of 2020 “1.Whether the Tribunal was right in allowing the claim of depreciation on customer list on entity acquired through business transfer agreement entered between the assessee company and third party entities when section 32 of the Income Tax Act 1961 does not provide customer list as either tangible asset or intangible assets eligible for depreciation? 2.Whether the claim of depreciation on customer list entered through business transfer agreement between the assessee and other entity is to be allowed even if it is not binding on the part of the customers of the acquired entities as there is no agreement or arrangement with them? 3.Whether the Tribunal was right in allowing the claim of depreciation on customer list which was acquired through business transfer agreement between the assessee Company and other entities especially when there is a non-compete clause in the agreement entered and no depreciation is allowable? 4. The learned Senior Standing Counsel for the appellant submits that 4/6 http://www.judis.nic.in TCA.Nos.212 & 213 of 2020 the above appeals are not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.08.2019 issued by the Central Board of Direct Taxes. By the said Circular, the monetary limit for filing or pursuing an appeal before the High Court has been increased to Rs.1 Crore. It is further submitted that the tax effect in these cases is less than the threshold limit. 5. In the light of the said submissions, the above tax case appeals are dismissed on account of the low tax effect. The substantial questions of law framed are left open. In the event the tax effect is above the threshold limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore these appeals to be heard and decided on merits. (T.S.S., J.) (V.B.S., J.)

05.08.2020 Internet: Yes /No Index : Yes/No 5/6 http://www.judis.nic.in TCA.Nos.212 & 213 of 2020 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J sk To The Income Tax Appellate Tribunal, Chennai 'B' Bench. TCA.Nos.212 & 213 of 2020 05.08.2020 6/6 http://www.judis.nic.in