Principal Commissioner Of Income Tax 3 vs. M/s.Vanishita Ispat Udygo Private Ltd.,

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TCA/237/2024HC Madras18 November 2024Bench: Honourable Mr Justice R. SURESH KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, by R. Suresh Kumar, J. and C. Saravanan, J., recorded the submission of the learned Senior Standing Counsel for the appellant Revenue that the present Tax Case Appeal is covered under the Low Tax Effect as per the recent Circular dated 17.09.2024, in Circular No.9/2024. Recording this submission, the Court dismissed the present appeal as Low Tax Effect. The Court explicitly stated that the questions of law raised in this appeal are kept open to be decided at a later point in time. There was no order as to costs. The judgment does not provide findings on the merits of the substantial questions of law raised, as the appeal was disposed of on the procedural ground of Low Tax Effect. Therefore, no principle can be extracted for citation regarding the substantive issues.

What were the facts?

The appeal is filed by the Principal Commissioner of Income Tax - 3 (Revenue) against the order of the Income Tax Appellate Tribunal (ITAT), Madras "B" Bench, dated 21.10.2022, in I.T.A.No.2934/Chny/2019. The assessee is M/s.Vanishitalspat Udyog Pvt. Ltd. The appeal concerns assessment year(s) not explicitly stated. The Revenue is challenging the ITAT's decision to dismiss its appeal without appreciating the factual aspects and the sufficiency of evidence provided by the assessee regarding loan creditors under Section 68 of the Income Tax Act, 1961. The Revenue also contends that the CIT(A) admitted confirmation letters at face value without independent verification, despite having 'conterminous powers'. The amount in dispute is not specified. The procedural history involves the assessee filing an appeal before the CIT(A), which was then appealed to the ITAT, and subsequently, the Revenue filed this appeal before the High Court.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case the ITAT was right in dismissing the departmental appeal without appreciating the factual aspects of the case in the proper perspective? 2. Whether on the facts and in the circumstances of the case and in law, the ITAT erred in not appreciating the fact that the evidence provided by the assessee before the CIT(A) are not sufficient and do not explain the identity, creditworthiness and genuineness of the transaction of the loan creditor as required under Sec.68 of the Act? 3. Whether on the facts and in the circumstances of the case and in law, the ITAT failed to consider that the CIT(A) had admitted the confirmation letters at face value without verifying the creditors himself even though he had "conterminous powers" as that of the Assessing Officer, as held by the Supreme Court in the case of CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225(SC)? Contentions: Assessee: No arguments recorded for the assessee in the provided text. Revenue: The Revenue argued that the appeal is covered under the Low Tax Effect as per Circular No.9/2024 dated 17.09.2024. The Revenue's other contentions relate to the ITAT's alleged failure to appreciate facts, the insufficiency of evidence under Section 68, and the CIT(A)'s acceptance of confirmation letters without verification, citing CIT vs. Kanpur Coal Syndicate.

Which sections of the Income-tax Act were involved?

Section 260A,Section 68

AI-generated summary — verify with the full judgment below

T.C.A.No.237 of 2024 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18.11.2024 CORAM : THE HONOURABLE MR.JUSTICE R. SURESH KUMAR AND THE HONOURABLE MR.JUSTICE C. SARAVANAN T.C.A.No.237 of 2024 Principal Commissioner of Income Tax - 3 121, Nungambakkam High Road Chennai 600 034

.. Appellant Vs. M/s.Vanishitalspat Udyog Pvt. Ltd. C/o. N D Rajagopal & Co. No.14, Rani Annadurai Street Mandaveli, Chennai - 600 028 PAN: AABCV9652P. .. Respondent Prayer: Appeal filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal Madras "B" Bench, dated 21.10.2022 in I.T.A.No.2934/Chny/2019. For the Appellant : Mr.J.Narayanasamy Senior Standing Counsel JUDGMENT (Order of the Court was made by R.SURESH KUMAR, J.) The substantial questions of law raised in the present tax case appeal are:- (i) Whether on the facts and in the circumstances Page 1 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.237 of 2024 of the case the ITAT was right in dismissing the departmental appeal without appreciating the factual aspects of the case in the proper perspective? (ii) Whether on the facts and in the circumstances of the case and in law, the ITAT erred in not appreciating the fact that the evidence provided by the assessee before the CIT(A) are not sufficient and do not explain the identity, creditworthiness and genuineness of the transaction of the loan creditor as required under Sec.68 of the Act? (iii) Whether on the facts and in the circumstances of the case and in law, the ITAT failed to consider that the CIT(A) had admitted the confirmation letters at face value without verifying the creditors himself even though he had "conterminous powers" as that of the Assessing Officer, as held by the Supreme Court in the case of CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225(SC)? 2. It is submitted by Mr.J.Narayanasamy, learned Senior Standing Counsel appearing for the appellant Revenue that the present Tax Case Appeal is covered under the Low Tax Effect as per the recent Circular dated 17.09.2024, in Circular No.9/2024. Page 2 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.237 of 2024 3. Recording the same, the present appeal stands dismissed as Low Tax Effect. The questions of law raised in this appeal are kept open to be decided at the later point of time. There shall be no order as to costs. (R.S.K., J.) (C.S.N, J) 18.11.2024 Neutral Citation:Yes/No drm Page 3 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.237 of 2024 R. SURESH KUMAR, J. AND C. SARAVANAN

, J.

(drm) T.C.A.No.237 of 2024 18.11.2024

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