COMMISSIONER OF INCOME TAX vs. M/S BRT SPINNERS PVT LTD
What did the High Court hold?
The High Court dismissed the appeal filed by the Revenue as withdrawn. The dismissal was based on the Revenue's submission that the appeal was not being pursued due to the low tax effect, citing CBDT Circular No. 17/2019. The Court noted that the monetary limit for filing or pursuing an appeal before the High Court had been increased to Rs. 1 Crore by this circular, and the tax effect in the present case was below this limit. Consequently, the appeal was dismissed as withdrawn. The substantial question of law framed for the appeal was expressly left open. Liberty was granted to the Revenue to seek restoration of the appeal if the tax effect was found to be above the threshold limit, to be heard and decided on merits. No costs were awarded.
What were the facts?
The Revenue, Commissioner of Income Tax, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Madras Bench. The appeal pertained to Assessment Year 2010-2011 and challenged the ITAT's decision regarding the taxability of proceeds realized by the assessee, M/s. BRT Spinners Pvt. Ltd., from the sale of Certified Emission Reduction Credits (CERCs) earned through its wind energy operations. The ITAT had held these proceeds to be a capital receipt and not taxable. The appeal was admitted on a substantial question of law concerning this classification.
What were the issues?
1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the proceeds realized by the assessee on sale of Certified Emission Reduction Credit, which the assessee had earned on the Clean Development mechanism in its wind energy operations, is a capital receipt and not taxable? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The assessee is the respondent in the appeal. Revenue's Contention: The Revenue submitted that the appeal was not being pursued due to the low tax effect, as per CBDT Circular No. 17/2019, which increased the monetary limit for pursuing appeals before the High Court to Rs. 1 Crore. The tax effect in this case was stated to be below this threshold.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
T.C.A.No.353 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 02.07.2021 CORAM: THE HON'BLE MR. JUSTICE M.DURAISWAMY AND THE HON'BLE MRS.JUSTICE R.HEMALATHA T.C.A.No.353 of 2015 Commissioner of Income Tax, No.63, Race Course Road, Coimbatore. ... Appellant v. M/s. BRT Spinners Pvt. Ltd., No.336, Pullakkadu Thottam, Kombakkadupudur, Itchipatti Post, Coimbatore – 641 668. PAN: AAA CB 7320 D ... Respondent/Cross Objector Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras, "A" Bench, dated 10.09.2014 in C.O.No.61/Mds/2014 in ITA.No.1675/Mds/2014 for the Assessment Year 2010-2011. For Appellant : Mr. T.R.Senthil Kumar Page 1/5 http://www.judis.nic.in T.C.A.No.353 of 2015
Senior Standing Counsel For Respondent : Mr.S. Sendamarai Kannan JUDGMENT (Judgment was delivered by M. DURAISWAMY, J.) We have heard Mr.T.R.Senthil Kumar, learned Senior Standing Counsel for the appellant/Revenue and Mr.S.Sendamarai Kannan, learned counsel for the respondent. 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
10.09.2014
made
C.O.No.61/Mds/2014
in ITA.No.1675/Mds/2014 on the file of the Income Tax Appellate Tribunal, Chennai, "A" Bench (for brevity, the Tribunal) for the Assessment Year 2010-2011. 3. The appeal was admitted on the following substantial question of law:- “Whether on the facts and in the Page 2/5 http://www.judis.nic.in T.C.A.No.353 of 2015 circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the proceeds realized by the assessee on sale of Certified Emission Reduction Credit, which the assessee had earned on the Clean Development mechanism in its wind energy operations, is a capital receipt and not taxable?”
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, liberty Page 3/5 http://www.judis.nic.in T.C.A.No.353 of 2015 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. [M.D., J.] [R.H., J.] Index : Yes/No 02.07.2021 Internet : Yes gv To The Income Tax Appellate Tribunal, Chennai,"A" Bench Page 4/5 http://www.judis.nic.in T.C.A.No.353 of 2015 M. DURAISWAMY, J. and R.HEMALATHA,J gv T.C.A.No.353 of 2015 02.07.2021
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