COMMISSIONER OF INCOME TAX vs. M/S.ATLAS METAL PROCESSORS

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TCA/250/2015HC Madras18 September 2020Bench: Hon`ble Dr Justice VINEET KOTHARI4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeals filed by the Revenue. The dismissal was based on a Circular instruction issued by the Central Board of Direct Taxes (CBDT) vide Circular No.17/2019 dated 8th August 2019. This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court if the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). In the present cases, the tax effect was stated to be less than this monetary limit. Consequently, the appeals were dismissed as withdrawn. The Court explicitly noted that the substantial question of law was kept open for determination in appropriate cases. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed two Tax Case Appeals (T.C.A. Nos. 250 & 251 of 2015) before the High Court of Judicature at Madras. These appeals challenged the order of the Income Tax Appellate Tribunal (ITAT), 'D' Bench, Chennai, dated 22.11.2013, which pertained to Assessment Years 2006-2007 and 2008-2009. The appeals were filed against M/s. Atlas Metal Processors Pvt. Ltd. The core of the dispute revolved around the assessee's entitlement to deduction under Section 10B of the Income Tax Act, 1961, for its old unit. The ITAT's order was being contested by the Revenue.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the assessee was entitled to deduction u/s.10B for the Assessment Year under consideration in respect of the old unit, merely on the approval of the Development Commissioner, MEPZ and the Customs Commissioner's approval for bonded warehouse, which do not address issues such as shifting of machinery or bifurcation or reconstruction of existing business? Assessee's arguments: The judgment records no specific arguments made by the assessee. The assessee did not appear before the High Court. Revenue's arguments: The Revenue contended that the ITAT erred in allowing the deduction under Section 10B based solely on approvals from the Development Commissioner, MEPZ, and the Customs Commissioner for a bonded warehouse. The Revenue argued that these approvals did not adequately address crucial aspects like the shifting of machinery, bifurcation, or reconstruction of the existing business, which are relevant for determining eligibility for the deduction.

Which sections of the Income-tax Act were involved?

Section 10B,Section 260A

AI-generated summary — verify with the full judgment below

Judgt. dt. 18.9.2020 in T.C.A.250 & 251/2015 CIT v. Atlas Metal Processors Pvt. Ltd. 1/4 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18.9.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY Tax Case (Appeal) Nos.250 & 251 of 2015 Commissioner of Income Tax, Chennai. Appellant Vs. M/s.Atlas Metal Processors Pvt. Ltd. No.173/3, Old Mahabalipuram Road, Nehru Street, Sholinganallur, Chennai 600 119.

Respondent Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, 'D' Bench, Chennai, dated 22.11.2013 made in ITA Nos.1307 & 1308/Mds/2013. For Appellant : Mr.T.Ravikumar Senior Standing Counsel For Respondent : No appearance. COMMON JUDGMENT (Delivered by DR.VINEET KOTHARI,J) These Tax Case Appeals have been filed by the Revenue, calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, 'D' Bench, Chennai, dated 22.11.2013 made in ITA Nos.1307 & 1308/Mds/2013, for the Assessment Years 2006-2007 and http://www.judis.nic.in Judgt. dt. 18.9.2020 in T.C.A.250 & 251/2015 CIT v. Atlas Metal Processors Pvt. Ltd. 2/4 2008-2009, by raising the following substantial question of law: "Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the assessee was entitled to deduction u/s.10B for the Assessment Year under consideration in respect of the old unit, merely on the approval of the Development Commissioner, MEPZ and the Customs Commissioner's approval for bonded warehouse, which do not address issues such as shifting of machinery or bifurcation or reconstruction of existing business?" 2. When the matters are taken up for hearing, learned Senior Standing Counsel brought to our notice the Circular instruction issued by the Central Board of Direct Taxes vide Circular No.17/2019 dated 8th August 2019, wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). 3. In the instant cases, the tax effect is said to be less than the monetary limit imposed and therefore, the Appeals filed by the http://www.judis.nic.in Judgt. dt. 18.9.2020 in T.C.A.250 & 251/2015 CIT v. Atlas Metal Processors Pvt. Ltd. 3/4 Revenue are dismissed, as withdrawn, keeping open the substantial question of law for determination in appropriate cases. Copy of this order may be sent to the Assessee. No costs. (V.K.,J.) (K.R.,J.) 18.9.2020 Index : Yes/No Internet : Yes/No ssk. To 1. Income Tax Appellate Tribunal, 'D' Bench, Chennai. 2. Commissioner of Income Tax, Chennai. 3. The Dy Commissioner of Income Tax, Company Circle I(1), Chennai. 4. M/s.Atlas Metal Processors Pvt. Ltd. No.173/3, Old Mahabalipuram Road, Nehru Street, Sholinganallur, Chennai 600 119.

http://www.judis.nic.in Judgt. dt. 18.9.2020 in T.C.A.250 & 251/2015 CIT v. Atlas Metal Processors Pvt. Ltd. 4/4 DR.VINEET KOTHARI, J. and KRISHNAN RAMASAMY, J. ssk. T.C.(A) Nos.250 & 251 of 2015 18.9.2020. http://www.judis.nic.in

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