PRINCIPAL COMMISSIONER OF IN vs. M/S KA INFRASTRUCTURE PVT LTD

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TCA/257/2021HC Madras17 April 2021Bench: Hon`ble Mr Justice M.DURAISWAMY4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as withdrawn on account of the Low Tax Effect, citing CBDT Circular No.17/2019. The Court noted that the monetary limit for pursuing appeals before the High Court had been increased to Rs.1 crore and that the tax effect in this particular case was below this limit. Consequently, the substantial question of law framed by the Revenue was left open. The Court granted liberty to the Revenue to seek restoration of the appeal if the tax effect was found to be above the threshold limit, allowing it to be heard and decided on merits. No costs were awarded, and the connected miscellaneous petition was closed.

What were the facts?

The Revenue, Principal Commissioner of Income Tax, Corporate Circle - 4(2), Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 03.05.2017 passed by the Income Tax Appellate Tribunal (ITAT), Chennai, "B" Bench. The appeal pertains to Assessment Year 2011-2012 and challenges the ITAT's decision allowing a deduction to the assessee, M/s. KA Infrastructure Pvt. Ltd. (now M/s. Khivraj Automobiles & Infrastructure Pvt. Ltd.). The core of the dispute revolves around the assessee's eligibility for deduction under Section 80IA(4)(iv) of the Act, specifically concerning windmills taken on lease.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and law, the ITAT is correct and justified in law in allowing deduction u/s.80IA(4)(iv) of the Income Tax Act 1961 when the assessee has taken the windmills on lease? The Revenue's contention, as presented by its learned Senior Standing Counsel, is that the appeal is not being pursued due to 'Low Tax Effect' as per CBDT Circular No.17/2019. This circular increased the monetary limit for filing or pursuing appeals before the High Court to Rs.1 crore, and the tax effect in this case is stated to be below this threshold. The judgment does not record any specific arguments from the assessee.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80IA(4)(iv)

AI-generated summary — verify with the full judgment below

T.C.A.No.257 of 2021 & C.M.P. Nos. 6747 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 17.04.2021 CORAM: THE HON'BLE MR. JUSTICE M.DURAISWAMY AND THE HON'BLE MRS.JUSTICE R.HEMALATHA T.C.A.No.257 of 2021 & C.M.P. Nos. 6747 of 2021 Principal Commissioner of Income Tax, Corporate Circle - 4(2), Chennai - 34. ... Appellant v. M/s. KA Infrastructure Pvt. Ltd., [Presently known as M/s. Khivraj Automobiles & Infrastructure Pvt. Ltd.] Bharat Kumar Bhavan, Anna Salai, Chennai - 600 006. PAN : AABVK 6189L ... Respondent Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras, "B" Bench, dated 03.05.2017 in ITA.No.1178/Mds/2015 for the Assessment Year 2011-2012. For Appellant : Mr. Karthik Ranganathan, Senior Standing Counsel JUDGMENT Page 1/4 https://www.mhc.tn.gov.in/judis/ T.C.A.No.257 of 2021 & C.M.P. Nos. 6747 of 2021 (Judgment was delivered by M. DURAISWAMY, J.) We have heard Mr. Karthik Ranganathan, learned Senior Standing Counsel for the appellant/Revenue. 2.The appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act) is directed against the order dated 03.05.2017 made in ITA.No.1178/Mds/2015 on the file of the Income Tax Appellate Tribunal, Chennai, "B" Bench (for brevity, the Tribunal) for the Assessment Year 2011-2012. 3. The appellant has raised the following substantial question of law in the above appeal:- “ Whether on the facts and in the circumstances of the case and law the ITAT is correct and justified in law in allowing deduction u/s.801A(4)(iv) of the Income Tax Act 1961 when the assessee has taken the windmills on lease?"

4.

The learned Senior Standing Counsel appearing 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 Page 2/4 https://www.mhc.tn.gov.in/judis/ T.C.A.No.257 of 2021 & C.M.P. Nos. 6747 of 2021 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 as withdrawn on account of the Low Tax Effect. The substantial question of law framed is left open. In the event the tax effect in this case 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. Consequently, the connected Miscellaneous Petition is closed. [M.D., J.] [R.H., J.] Index : Yes/No 17.04.2021 Internet : Yes Rj To The Income Tax Appellate Tribunal, Chennai,"B" Bench Page 3/4 https://www.mhc.tn.gov.in/judis/ T.C.A.No.257 of 2021 & C.M.P. Nos. 6747 of 2021 M. DURAISWAMY, J. and R.HEMALATHA,J Rj T.C.A.No.257 of 2021 & C.M.P. Nos. 6747 of 2021 17.04.2021

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