SHRIRAM EQUIPMENT FINANCE vs. DEPUTY COMMISSIONER OF

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TCA/3/2016HC Madras19 November 2024Bench: Honourable Mr Justice R. SURESH KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

Both the learned counsel for the appellant (assessee) and the learned Standing Counsel for the respondent (revenue) submitted that the issue raised in this tax case appeal is covered by the decision of a Division Bench of the High Court in T.C.A.No.755 of 2009 etc., batch dated 30.06.2022. They further submitted that the issue has been widely discussed and decided in pages 29 to 43 of the said judgment. In view of the decision in the said batch of cases, where the questions of law were decided in favour of the Revenue and against the assessee, this appeal is also disposed of by deciding the questions of law in favour of the Revenue and against the assessee. Therefore, the Tax Case Appeal deserves to be dismissed. No specific reasoning for the decision on the merits of the questions of law is provided in this judgment, as it relies on a previous binding decision. The operative direction is dismissal of the appeal.

What were the facts?

The assessee, Shriram Equipment Finance Company Limited, filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order of the Income Tax Appellate Tribunal (ITAT), Chennai. The appeal pertains to assessment year(s) not explicitly stated but relates to the deductibility of amounts set apart as per RBI Act provisions. The core of the dispute involves whether these amounts constitute a diversion of income by overriding charge and if they are allowable as a deduction in computing assessable income under the Income Tax Act, 1961, including under Section 115JB. The procedural history involves the ITAT's order, which is now under challenge before the High Court.

What were the issues?

The High Court was asked to decide the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the appellate Tribunal was right in holding that there has been no diversion of income by overriding charge in respect of the amount set apart as per the RBI Act in compliance with the mandatory provisions of Section 45IC read with Section 45Q of the RBI Act? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the amount set apart in compliance with the provisions of the Reserve Bank of India Act, 1934, by the appellant from its income, is not an allowable deduction in computing the assessable income under the provisions of the Income Tax Act, 1961, both in regular computation and under Section 115JB? Assessee's Contentions: The assessee argued that the amounts set apart as per RBI Act provisions constituted a diversion of income by overriding charge and should be allowed as a deduction. The specific authorities or precedents relied upon by the assessee are not recorded in the judgment. Revenue's Contentions: The revenue contended that these amounts were not deductible and did not represent a diversion of income by overriding charge. The specific authorities or precedents relied upon by the revenue are not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 260A,Section 45IC,Section 45Q,Section 115JB

AI-generated summary — verify with the full judgment below

T.C.A.No.3 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19.11.2024 CORAM THE HON'BLE MR.JUSTICE R.SURESH KUMAR AND THE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case Appeal No.3 of 2016 Shriram Equipment Finance Company Limited Mookambika Complex, No.4, Lady Desika Road Mylapore, Chennai 600 004. .... Appellant Vs. Deputy Commissioner of Income Tax Corporate Circle 6(1), 121, MG Road Chennai 600 034. .... Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, 'A' Bench Chennai, dated 25.06.2015 made in I.T.A.No.576/Mds/2015. For Appellant : Mr.R.Sivaraman For Respondent : Mr.K.Narayanaswamy J U D G M E N T (Delivered by R.SURESH KUMAR, J.) This Tax Case Appeal has been filed by the assessee calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai by raising the following substantial questions of law: https://www.mhc.tn.gov.in/judis T.C.A.No.3 of 2016 1. Whether on the facts and in the circumstances of the case, the appellate Tribunal was right in holding that there has been no diversion of income by overriding charge in respect of amount set apart as per RBI Act in compliance with the mandatory provisions of Section 45IC read with Section 45Q of RBI Act? 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the amount set apart in compliance with the provisions of Reserve Bank of India Act, 1934, by the appellant from its income, is not an allowable deduction in computing the assessable income under the provisions of Income Tax Act, 1961 both in regular computation and under Section 115JB? 2. When this matter is taken up for final hearing, both the learned counsel for the appellant / assessee as well as the learned Standing Counsel for the respondent / revenue submit that the issue raised in this tax case appeal is covered by the decision of a Division Bench of this Court in T.C.A.No.755 of 2009 etc., batch dated 30.06.2022. They further submit that the issue has been widely discussed and decided in page numbers 29 to 43 of the said judgment. 3. In view of the decision that has been taken in the said batch of cases by judgment dated 30.06.2022, where the questions of law have been decided in favour of the Revenue and against the assessee, as the issue raised in the https://www.mhc.tn.gov.in/judis T.C.A.No.3 of 2016 present tax case appeal is covered by the said decision, this appeal is also disposed of by deciding the questions of law in favour of the Revenue and against the assessee. Therefore, the tax case appeal deserves to be dismissed and it is accordingly dismissed. No costs. (R.S.K.,J.) (C.S.N.,J.) 19.11.2024 NCS : Yes/No KST To The Income Tax Appellate Tribunal 'A' Bench, Chennai. https://www.mhc.tn.gov.in/judis T.C.A.No.3 of 2016 R.SURESH KUMAR, J. AND C.SARAVANAN, J. KST T.C.A.No.3 of 2016 19.11.2024 https://www.mhc.tn.gov.in/judis

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