PRINCIPAL COMMISSIONER OF INCOME TAX vs. SUN SPINTEX INDIA LTD

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TCA/344/2023HC Madras15 October 2024Bench: Honourable Mr Justice R. SURESH KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the Revenue submitted that the appeal is covered under the Low Tax Effect as per Circular No.9/2024 dated 17.09.2024. Consequently, the Court dismissed the appeal on this ground. The Court explicitly stated that the substantial questions of law arising in this appeal are kept open to be decided at a later point in time. Therefore, no finding was rendered by the High Court on the merits of the substantial questions of law concerning the depreciation rates for windmills. The operative direction was to dismiss the appeal as covered by the low tax effect circular, with no order as to costs.

What were the facts?

The appeal is filed by the Principal Commissioner of Income Tax, Coimbatore (Revenue) against the order of the Income Tax Appellate Tribunal (ITAT), Chennai. The ITAT's order was passed in ITA No.596/CHNY/2022. The assessee is M/s. Sun Spintex India Ltd., which has since amalgamated with Harshini Textiles Pvt. Ltd. The appeal concerns the assessment year(s) not explicitly stated but implied to be related to the installation and purchase of windmills. The core dispute revolves around the depreciation rate applicable to windmills. The Revenue is challenging the ITAT's decision on this matter.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether the ITAT was perverse in holding that the Income Tax Act, 1961, specifically states that windmills installed on or before 31.03.2012 are eligible for depreciation at 80%, and that the Income Tax Rules, 1962, emphasize installation over purchase/acquisition. 2. Whether the ITAT was right in holding that restricting the depreciation rate to 15% on windmills purchased by the assessee during FY 2013-14, following an amendment via notification No.15 of 2012 dated 30.03.2012, is contrary to Rule 5 of the Income Tax Rules, 1962. The Revenue contended that the matter is covered under the Low Tax Effect as per Circular No.9/2024 dated 17.09.2024. The judgment does not record specific arguments from the assessee on the substantial questions of law, but their position would be in support of the ITAT's order.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

T.C.A.No.344 of 2023 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15.10.2024 CORAM : THE HONOURABLE MR.JUSTICE R. SURESH KUMAR AND THE HONOURABLE MR.JUSTICE C. SARAVANAN T.C.A.No.344 of 2023 Principal Commissioner of Income Tax Corporate Circle – 1, Coimbatore. .. Appellant Vs. M/s.Sun Spintex India Ltd. (now amalgamated with Harshini Textiles Pvt. Ltd.) 504, Avinashi Road, Peelamedu Coimbatore – 641 004. PAN: AAQCS 4328E .. Respondent Prayer: Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order of Income Tax Appellate Tribunal, “A” Bench,

Chennai

dated

19.01.2023

passed

in I.T.A.No.596/CHNY/2022. For the Appellant : Mr.Karthik Ranganathan Senior Standing Counsel For the Respondent : Mr.R.Venkata Narayanan for M/s.Subbaraya Aiyar Padmanabhan JUDGMENT (Order of the Court was made by R.SURESH KUMAR, J.) The present tax case appeal was admitted on 05.07.2023 by this Court on the following substantial questions of law:- "1. Whether on the facts and circumstances of Page 1 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.344 of 2023 the case and in law, the Ld. Income Tax Appellate Tribunal was perverse in holding that the IT Act specifically states that windmills installed on or before 31.03.2012 are eligible for depreciation @ 80% and the IT Rules does not give emphasize for purchase / acquisition of windmills, but only talks about installation? 2. Whether on the facts and circumstances of the case and in law, the Ld. Income Tax Appellate Tribunal was right in law in holding that restricting the rate or depreciation to 15% on windmills purchased by the assessee during the FY 2013-14 in terms of amendment vide notification No.15 of 2012 dated 30.03.2012, is contrary to the provisions of Rule 5 of Income Tax Rules, 1962?" 2. It is submitted by the learned Senior Standing Counsel appearing for the appellant Revenue that this matter is covered under the Low Tax Effect as per the recent Circular dated 17.09.2024, in Circular No.9/2024. Page 2 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.344 of 2023 3. Hence, this appeal stands dismissed, as covered under the low tax effect and the substantial questions of law arising in this appeal are kept open to be decided at the later point of time. There shall be no order as to costs. (R.S.K., J.) (C.S.N, J) 15.10.2024 Neutral Citation:Yes/No drm Page 3 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.344 of 2023 R. SURESH KUMAR, J. AND C. SARAVANAN

, J.

(drm) T.C.A.No.344 of 2023 15.10.2024 Page 4 of 4 https://www.mhc.tn.gov.in/judis

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