COMMISSIONER OF INCOME TAX II vs. M/S.HARITA GOPAL PVT LTD,

TCA.No.346 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22.03.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN and THE HONOURABLE MR. JUSTICE J.SATHYA NARAYANA PRASAD TCA.No.346 of 2016 The Commissioner of Income Tax II, 121, Nungambakkam High Road, Chennai - 600 034. ... Appellant

Vs M/s. Harita Gopal Pvt.Ltd., Jeyalakshmi Estate, 29, Haddows Road, Chennai 600 006. PAN:AAA CH 0926 K ... Respondent Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, “C” Bench, Chennai, dated 30.12.2015 in I.TA.No.277/Mds/2014. For Appellant : Mr. Karthik Ranganathan Senior Standing Counsel For Respondent : Mr.R. Vijayaraghavan for M/s.Subbaraya Aiyar 1/4 https://www.mhc.tn.gov.in/judis TCA.No.346 of 2016 JUDGMENT (Judgment of the Court was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 30.12.2015 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai, in I.T.A.No.277/Mds/2014, relating to the assessment year 2008-2009, by raising the following substantial questions of law:- “ (i) Whether on the facts and in the circumstances of the case, the ITAT is justified in holding that the loans and advances taken by a concern cannot be subjected to addition as deemed dividend under section 2(22)(e) of the Act? (ii) Whether on the facts and in the circumstances of the case, the ITAT was right in holding that the assessee company was not the beneficial owner of shareholding in its sister concern when both the shareholders are one and the same in both the companies? (iii) Whether on the facts and in the circumstances of the case, the restrictive interpretation of section 2(22)(e) by the ITAT does not amount to ignoring the second limb of provisions to section 2(22)(e) wherein the word "concern" is also included for the purpose of taxation of deemed dividend in its hands? 2/4 https://www.mhc.tn.gov.in/judis TCA.No.346 of 2016 (iv) Whether on the fact and in the circumstances of the case, the ITAT was right in granting liberty to the Revenue for roping in the shareholders concerned when the law does not provide to do so? 2. When the matter was taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeal 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). It is also submitted that the tax effect in this appeal is less than the threshold limit. 3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs. [R.M.D., J.] [J.S.N.P., J.] 22.03.2022

Index : yes/no Internet : yes/no 3/4 https://www.mhc.tn.gov.in/judis TCA.No.346 of 2016 R. MAHADEVAN,

and J.SATHYA NARAYANA PRASAD

, J.

av To 1. The Income Tax Appellate Tribunal, “C” Bench, Chennai, 2. The Commissioner of Income Tax II, 121, Nungambakkam High Road, Chennai - 600 034. 3. The Assistant Commissioner of Income tax, Company Circle - III (2), Chennai - 600 034. 4. The Commissioner of Income Tax (Appeals) - II, Chennai. TCA.No.346 of 2016 22.03.2022 4/4 https://www.mhc.tn.gov.in/judis