COMMISSIONER OF INCOME TAX vs. M/S TTK HEALTHCARE LIMITED

TCA/213/2017HC Madras29 August 2019Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The dismissal was based on the Revenue's submission that the appeal was not being pursued due to a low tax effect, in accordance with CBDT Circular No. 17/2019, which raised the monetary threshold for appeals to the High Court to Rs. 1 Crore. The Court noted that the tax effect in this case was below the specified limit. Consequently, the substantial question of law framed for the appeal was left undecided. The Revenue was granted liberty to seek restoration of the appeal if the tax effect was found to be above the threshold limit. No costs were imposed.

What were the facts?

The Revenue, Commissioner of Income Tax, Corporate Circle 3, Chennai, filed an appeal under Section 260A of the Income-tax Act, 1961, against an order dated 08.09.2016 passed by the Income Tax Appellate Tribunal ('A' Bench, Chennai). The appeal pertained to assessment year 2005-06 and challenged the Tribunal's decision regarding logo charges paid by the assessee, M/s. TTK Healthcare Limited. The High Court admitted the appeal on a substantial question of law. Subsequently, the Revenue sought to withdraw the appeal, citing the low tax effect in light of CBDT Circular No. 17/2019, which increased the monetary limit for appeals to the High Court to Rs. 1 Crore. The tax effect in this case was stated to be below this threshold.

What were the issues?

1. Whether, on the facts and circumstances of the case and in law, the Tribunal was right and justified in holding that logo charges paid by the assessee were revenue in nature even though such payment was continuously made for several years and the assessee got enduring benefit? (Question of law/mixed law and fact, concerning the nature of expenditure). Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue argued that the logo charges were revenue in nature despite being paid continuously for several years and providing an enduring benefit to the assessee. The Revenue's appeal was based on this contention, seeking to overturn the Tribunal's finding. However, the Revenue later sought to withdraw the appeal due to low tax effect, as per CBDT Circular No. 17/2019.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.213 of 2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 29.08.2019 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.213 of 2017 Commissioner of Income Tax, Corporate Circle 3, Chennai. .. Appellant -vs- M/s.TTK Healthcare Limited, No.6, Cathedral Road, Chennai-600 006. PAN: AABCT 3312 J .. Respondent Appeal under Section 260A of the Income-tax Act, 1961, against the order dated 08.09.2016, made in I.T.A.No.1921/Mds/2016 on the file of the Income Tax Appellate Tribunal 'A' Bench, Chennai for the assessment year 2005-06. For Appellant : Mr.M.Swaminathan, Senior Standing Counsel assisted by Ms.V.Pushpa Standing Counsel For Respondent : Mr.R.Venkatanarayana, For M/s.Subbaraya Aiyar Padmanabhan & Ramamani ****** 1/4 http://www.judis.nic.in T.C.A.No.213 of 2017 JUDGMENT (Delivered by T.S.Sivagnanam, J.) This appeal filed by the Revenue under Section 260A of the Income-tax Act, 1961 is directed against the order dated 08.09.2016, made in I.T.A.No.1921/Mds/2016 on the file of the Income Tax Appellate Tribunal 'A' Bench, Chennai for the assessment year 2005-06. 2.The appeal has been admitted on 07.04.2017, on the following substantial question of law:- “Whether on the facts and circumstances of the case and in law, the Tribunal was right and justified in holding that logo charges paid by the assessee were revenue in nature even though such payment was continuously made for several years and the assessee got enduring benefit?” 3.Heard Mr.M.Swaminathan, learned Senior Standing Counsel assisted by Ms.V.Pushpa, learned Standing Counsel for the appellant – and Mr.R.Venkatanarayana, learned counsel, for M/s.Subbaraya Aiyar, Padmanabhan & Ramamani, for the respondent. 4.The learned Senior Standing Counsel for the appellant submits that 2/4 http://www.judis.nic.in T.C.A.No.213 of 2017 the above appeal is 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 this case is less than the threshold limit. 5.In the light of the said submissions, the above tax case appeal is dismissed on account of the low tax effect. The substantial question of law framed is 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 the appeal to be heard and decided on merits. No costs. (T.S.S., J.) (V.B.S., J.) 29.08.2019 Index : Yes/No Speaking/Non-Speaking Order abr To 1.M/s.TTK Healthcare Limited, No.6, Cathedral Road, Chennai-600 006. 2.The Income Tax Appellate Tribunal 'A' Bench, Chennai. 3/4 http://www.judis.nic.in T.C.A.No.213 of 2017 T.S.Sivagnanam, J. and V.Bhavani Subbaroyan, J. (abr) T.C.A.No.213 of 2017 29.08.2019 4/4 http://www.judis.nic.in

Recent GST High Court judgments

Search GST case law →