The Principal Commissioner o vs. M/s.Island Hotels Maharaj Lt

TCA/288/2021HC Madras28 April 2021Bench: Hon`ble Mr Justice M.DURAISWAMY5 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The High Court dismissed the appeal as withdrawn on account of the Low Tax Effect, citing Circular No. 17/2019. The Court noted that the tax effect in this case was less than the threshold limit stipulated in the circular. 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 for hearing and decision on merits if the tax effect was found to be above the fixed threshold limit. No costs were awarded, and the connected Miscellaneous Petition was closed.

What were the facts?

The Revenue, specifically the Principal Commissioner of Income Tax, Corporate Circle - 2(1), Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal, Madras, dated October 31, 2017. The appeal pertained to Assessment Year 2010-2011 and concerned the assessee, M/s. Island Hotels Maharaj Ltd. (successor to EIH Associated Hotels Ltd.). The core of the dispute revolved around whether unabsorbed depreciation from Assessment Years 1997-98 to 2001-02 could be carried forward beyond the statutory eight-year period. The Revenue's appeal was presented to the High Court of Judicature at Madras.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct in holding that unabsorbed depreciation relating to AY 1997-98 to 2001-02 can be carried forward beyond eight years? (Question of law) Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The learned Senior Standing Counsel for the appellant (Revenue) submitted that the appeal was not being pursued due to 'Low Tax Effect' as per Circular No. 17/2019 dated August 8, 2019, issued by the Central Board of Direct Taxes. 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 was below that threshold.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.288 of 2021 1 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 28.04.2021 CORAM: THE HON'BLE MR. JUSTICE M.DURAISWAMY AND THE HON'BLE MRS.JUSTICE R.HEMALATHA T.C.A.No.288 of 2021 The Principal Commissioner of Income Tax, Corporate Circle - 2(1), Chennai - 34. ... Appellant v. M/s. Island Hotels Maharaj Ltd., [Successor-EIH Associated Hotels Ltd.,] 1/24, GST Road, Meenambakkam, Chennai - 600 027 PAN : AAACI 81573M ... 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 31.10.2017 in ITA.No.2993/Mds/2016 for the Assessment Year 2010-2011. Page 1/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.288 of 2021 1 For Appellant : Mr. Karthik Ranganathan, Senior Standing Counsel For Respondent : Mr.N.V. Balaji JUDGMENT (Judgment was delivered by M. DURAISWAMY, J.) We have heard Mr. Karthik Ranganathan, learned Senior Standing Counsel for the appellant/Revenue and Mr.N.V. Balaji, learned counsel appearing for the respondent/assessee. 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 31.10.2017 made in ITA.No.2993/Mds/2016 on the file of the Income Tax Appellate Tribunal, Chennai, "B" Bench (for brevity, the Tribunal) for the Assessment Year 2010-2011. Page 2/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.288 of 2021 1 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 in law the Hon'ble ITAT is correct and in law in holding that unabsorbed depreciation relating to AY 1997-98 to 2001-02 can be carry forward beyond eight years?

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 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, Page 3/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.288 of 2021 1 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 28.04.2021 Internet : Yes Rj To The Income Tax Appellate Tribunal, Chennai,"B" Bench Page 4/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.288 of 2021 1 M. DURAISWAMY, J. and R.HEMALATHA,J Rj T.C.A.No.288 of 2021 28.04.2021

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