THE COMMISSIONER vs. RENKOKIL INDIA P LTD

TCA.No.222 of 2020 In the High Court of Judicature at Madras Dated : 19.08.2020 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.222 of 2020 The Principal Commissioner of Income Tax-5, Chennai ...Appellant Vs M/s.Renkokil India Private Ltd 4th Floor, No.105, Sreela Terrace 1st Main Road, Gandhi nagar, Adyar, Chennai 20, PAN AADCR7629E ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 24.05.2019 made in ITA.No.243/chny/2019 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench. For Appellant: Mr.R.Hemalatha, Senior Standing Counsel Respondent: Mr.S.P.Chidambaram 1/6 http://www.judis.nic.in TCA.No.222 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. This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 is directed against the order dated 24.05.2019 made in ITA.No. 243/chny/2019 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench for the assessment year 2009-10. 3. The appeal is admitted on the following substantial questions of law: “1.Whether on the facts and in the circumstances of the case, the Tribunal was right in allowing the claim of depreciation on the customer list of the entities acquired through Business Transfer Agreement entered into by the assessee with the concerned entities especially when Section 32 of the Income Tax Act does not include customer list to be treated either as 2/6 http://www.judis.nic.in TCA.No.222 of 2020 tangible or intangible assets which is eligible to claim for depreciation? 2. Is not the finding of the Tribunal bad by allowing the claim of depreciation on the customer list when the facts remain that the business transaction agreement entered is not binding or mandatory on the part of the erstwhile customers of the acquired entity as no agreement or arrangement of enduring nature has been entered into by the assessee with the customers? 3. Whether the reasoning and finding of the Tribunal is proper by allowing the claim of depreciation on customer list especially when the business transfer agreement through which the Assessee had acquired the business of other entity there is a non compete clause and no depreciation is allowable on non compete fees? 4. The learned Senior Standing Counsel for the appellant submits that the above appeal is not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.8.2019 issued by the 3/6 http://www.judis.nic.in TCA.No.222 of 2020 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.)

19.08.2020 Internet: Yes /No Index : Yes/No 4/6 http://www.judis.nic.in TCA.No.222 of 2020 To The Income Tax Appellate Tribunal, Chennai 'B' Bench. 5/6 http://www.judis.nic.in TCA.No.222 of 2020 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J sk TCA.No.222 of 2020 19.08.2020 6/6 http://www.judis.nic.in