M/S.M.ARUNACHALAM AND vs. THE JOINT/ASSISTANT

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TCA/228/2017HC Madras29 November 2021Bench: Hon`ble Mr Justice R. MAHADEVAN5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the assessee had availed the benefit conferred under the Direct Tax Vivad Se Vishwas Act, 2020, a beneficial legislation enacted for the resolution of disputed tax matters. The declarations submitted by the assessee under this Act were accepted, and Form 3 was issued by the Income Tax Department. In light of this development, the Court deemed it unnecessary to decide the substantial questions of law raised in the Tax Case Appeal. The appeal was disposed of based on the submissions made by both parties, with a direction to the department to process the application under the Vivad Se Vishwas Act at the earliest and communicate the decision to the assessee. No costs were awarded.

What were the facts?

The assessee, M/s M.Arunachalam and Company, filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order dated 07.04.2016 passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'A' Bench. The appeal pertained to the assessment year 2009-10. The dispute involved the disallowance of interest payments and depreciation on a property acquired for business purposes. During the pendency of the appeal, the assessee filed Forms 1 and 2 under the Direct Tax Vivad Se Vishwas Act, 2020, which were accepted by the Income Tax Department, and Form 3 was issued on 10.06.2021. The Revenue conceded to this development.

What were the issues?

1. Whether the Appellate Tribunal was correct in law in confirming the disallowance of interest payments aggregating to Rs.23,82,173/- against the loan taken for the purpose of property for business, despite material evidence on record regarding the existence and use of the building for business purposes, as against the allegedly perverse findings of facts by the Tribunal and lower authorities? (Question of law) 2. Whether the Appellate Tribunal was correct in law in confirming the disallowance of depreciation on the building purchased for business purposes, despite material evidence on record regarding the existence and use of the said building for business purposes, as against the allegedly perverse findings of facts by the Tribunal and lower authorities? (Question of law) Assessee's contention: The assessee argued that during the pendency of the appeal, they had availed the benefit of the Direct Tax Vivad Se Vishwas Act, 2020, by filing the requisite forms, which were accepted, and Form 3 was issued. Revenue's contention: The Revenue fairly conceded to the submissions made by the assessee regarding the availing of the Direct Tax Vivad Se Vishwas Act, 2020.

Which sections of the Income-tax Act were involved?

Section 260A,Section 4

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.228 of 2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 29.11.2021 CORAM : THE HONOURABLE MR. JUSTICE R.MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No.228 of 2017 M/s M.Arunachalam and Company, No.117/79, Lloyds Road, Royapettah, Chennai – 600 014. PAN: AAAFM6851F

.. Appellant Versus The Joint/Assistant Commissioner of Income Tax, Business Range - VIII, Chennai – 600 006. .. Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chennai "A" Bench, dated 07.04.2016 passed in I.T.A.No.1352/Mds/2015. For Appellant : Mr.S.Sridhar For Respondent : M/s.V.Pushpa

Junior Standing Counsel Page 1/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.228 of 2017

J U D G M E N T (Judgment was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / assessee, challenging the order dated 07.04.2016 passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai, in I.T.A.No.1352/Mds/2015, relating to the assessment year 2009-10, by raising the following substantial questions of law:- “ 1. Whether the Appellate Tribunal is correct in law in confirming the disallowance of interest payments aggregating to Rs.23,82,173/- against the loan taken for the purpose of property for business despite the material evidence available on record on the existence as well as the use of the said building for business purposes as against the perverse finding of facts recorded by them as well as by the lower authorities? 2. Whether the Appellate Tribunal is correct in law in confirming the disallowance of depreciation on the building purchased for business purposes despite the material evidence available on record on the existence as well as the use of the said building for business purposes as against the perverse findings of facts recorded by them as well as by the lower authorities? Page 2/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.228 of 2017 2.When the matter was taken up for consideration, the learned counsel appearing for the appellant / assessee submitted that during the pendency of this tax case appeal, the assessee has filed the requisite Forms 1 and 2 under Section 4 of the Direct Tax Vivad Se Vishwas Act, 2020, which were accepted and Form 3 was issued to the assessee on 10.06.2021 by the Income Tax Department. The learned counsel has also filed a memo to that effect. 3.The aforesaid submission made by the learned counsel for the appellant / assessee has also been fairly conceded by the learned senior standing counsel appearing for the respondent / Revenue. 4.This court heard the submissions made by the learned counsel on either side, as per which, the assessee has already availed the benefit conferred under the beneficial legislation viz., the Direct Tax Vivad Se Vishwas Act, 2020, enacted for resolution of disputed tax and for matter connected therewith or incidental thereto, which came into force with effect from 17.03.2020; and the declarations submitted by the assessee were also accepted and Form 3 was also issued to them by the Income Tax Department. Page 3/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.228 of 2017 In view of such development, it is unnecessary for this court to decide the substantial questions of law arisen in this tax case appeal.

5.Therefore, recording the submissions so made by the learned counsel on either side, this appeal stands disposed of, directing the department to process the application at the earliest in accordance with the Act and communicate the decision to the assessee at the earliest. No costs. (R.M.D., J.) (M.S.Q., J.) 29.11.2021

Internet : Yes

Index : Yes / No To 1. Income Tax Appellate Tribunal, Chennai "A" Bench. 2. The Joint/Assistant Commissioner of Income Tax Business Range VIII Chennai – 600 006. Page 4/5 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.228 of 2017

R.MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. av Tax Case Appeal No.228 of 2017

29.11.2021 (½) Page 5/5 https://www.mhc.tn.gov.in/judis

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