PRINCIPAL COMMISSIONER OF vs. MALLIKA BATTERY COMPANY LTD

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TCA/264/2017HC Madras20 March 2020Bench: Hon`ble Dr Justice VINEET KOTHARI4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The learned Standing Counsel for the Revenue brought to the court's notice Circular No. 17/2019 dated August 8, 2019, issued by the Central Board of Direct Taxes (CBDT). 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 case, the tax effect was stated to be less than this monetary limit. Consequently, the High Court dismissed the appeal as not pressed. The court explicitly stated that the substantial questions of law remain open for determination in an appropriate case.

What were the facts?

The Revenue (Principal Commissioner of Tax-4, Chennai) filed a Tax Case Appeal under Section 260A of the Income Tax Act, 1961, challenging an order of the Income Tax Appellate Tribunal (ITAT), 'B' Bench, Chennai, dated October 15, 2018, in ITA No.1012/Mds/2016. The appeal concerns the assessment year(s) not explicitly stated in the provided text. The dispute revolves around the ITAT's decision to delete the addition of sale proceeds of shares of M/s. Numeric Power Systems Ltd. when computing the book profits for the purpose of Section 115JB of the Act. The procedural history involves the ITAT's order being challenged 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 Tribunal was right in deleting the addition of sale proceeds of shares of M/s. Numeric Power Systems Ltd., while computing the book profits for the purpose of Section 115JB of the Income Tax Act? 2. Whether, in the facts and circumstances of the case and in law, the Appellate Tribunal was correct and justified in holding that the assessee company is not the owner of shares of M/s. Numeric Power Systems Ltd., even though the assessee's name appears as owner/holder in the share certificate as well as the share register of the said company? 3. Whether, in the facts and circumstances of the case and in law, the ITAT is correct in holding that the assessee was holding shares of M/s. Numeric Power Systems Ltd., in a fiduciary capacity on behalf of its director and whether the order of the Appellate Tribunal is contrary on records and is perverse on facts? The Revenue raised these questions. The judgment does not record specific arguments made by the assessee.

Which sections of the Income-tax Act were involved?

Section 260A,Section 115JB

AI-generated summary — verify with the full judgment below

Judgment in TCA No.264 of 2017 dated 20.03.2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 20.03.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.264 of 2017 Principal Commissioner of Tax-4 No.121, Mahatma Gandhi Road Chennai 600 034. ... Appellant Vs. Mallika Battery Company Ltd No.5, 4th Street, Dr.Radhakrishnan Salai Myalpore, Chennai 600 004. PAN AAACM23878L ... Respondent ----- Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal 'B' Bench, Chennai dated 15.10.2018 in ITA No.1012/Mds/2016. ----- For Appellant : Mr.T.R.Senthil Kumar Senior Standing Counsel

For Respondent : Mr.A.S.Sriraman for M/s.S.Sridhar Page 1 of 4 http://www.judis.nic.in Judgment in TCA No.264 of 2017 dated 20.03.2020 J U D G M E N T (Judgment of the Court was delivered by DR.VINEET KOTHARI,J) This Tax Case Appeal has been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, 'B' Bench, Chennai, by raising the following substantial questions of law: "1.Whether on the facts and in the circumstances of the case, the Tribunal was right in deleting the addition of sale proceeds of shares of M/s.Numeric Power Systems Ltd., while computing the book profits for the purpose of Section 115 JB of the Income Tax Act? 2. Whether in the facts and circumstances of the case and in law, the Appellate Tribunal was correct and justified in holding that the assessee company is not the owner of shares of M/s.Numeric Power Systems Ltd., even though name of assessee appears as owner/holder in the share certificate as well as share register of the said company? 3. Whether in the facts and circumstances of the case and in law, ITAT is correct in holding that assessee was holding shares of M/s.Numeric Power Systems Ltd., in fiduciary capacity on behalf of its director and whether order of the Appellate Tribunal is contrary on records and is perverse on facts?” Page 2 of 4 http://www.judis.nic.in Judgment in TCA No.264 of 2017 dated 20.03.2020 2. When the matter was taken up for hearing, the learned 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 case, the tax effect is said to be less than the monetary limit imposed and therefore, the appeal filed by the Revenue is dismissed as not pressed, keeping open the substantial questions of law for determination in an appropriate case. (V.K.,J.) (R.S.K.,J.) 20.03.2020 KST To Income Tax Appellate Tribunal 'B' Bench,Chennai. Page 3 of 4 http://www.judis.nic.in Judgment in TCA No.264 of 2017 dated 20.03.2020 DR.VINEET KOTHARI, J. AND R.SURESH KUMAR, J. KST T.C.(A) No.264 of 2017 20.03.2020 Page 4 of 4 http://www.judis.nic.in

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