COMMISSIONER OF INCOME TAX vs. M/S.TCP LTD.

TCA/360/2022HC Madras11 November 2024Bench: Honourable Mr Justice R. SURESH KUMAR3 pages

AI SummaryDismissed

What did the High Court hold?

The High Court noted the submission made by the learned Standing Counsel for the appellant Revenue regarding the tax effect being below the monetary limit stipulated in CBDT's Circular No.9 of 2024 dated 17.09.2024. Consequently, the Court decided to dispose of the Tax Case Appeal on the ground of low tax effect. The Court explicitly stated that the substantial questions of law raised in the appeal are kept open for adjudication at an appropriate stage. No costs were awarded, and connected miscellaneous petitions were closed. The judgment does not provide any finding on the merits of the substantial question of law concerning the allowability of interest on borrowed capital paid to an associate company.

What were the facts?

The Revenue has filed this Tax Case Appeal against an order of the Income Tax Appellate Tribunal (ITAT), Chennai, dated 09.08.2021, made in I.T.A.No.3358/2019. The appeal concerns the assessment year 2005-2006. The dispute revolves around the allowability of interest paid on borrowed capital to an associate company of the respondent assessee, M/s.TCP Limited. The Revenue is challenging the ITAT's decision to uphold the order allowing this interest deduction. The learned Senior Standing Counsel for the appellant Revenue submitted that the tax effect in this case is below the monetary limit prescribed by CBDT's Circular No.9 of 2024 dated 17.09.2024.

What were the issues?

1. Whether the Tribunal was justified in upholding the order of the ITAT for the assessment year 2005-2006 by allowing the interest on borrowed capital which was paid to an Associate Company of the Respondent? (Question of law) Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue contended that the tax effect in the instant case is less than the monetary limit imposed by CBDT's Circular No.9 of 2024 dated 17.09.2024. Based on this circular, the Revenue submitted that the appeal can be disposed of without adjudicating the substantial question of law.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.360 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 11.11.2024 CORAM THE HON'BLE MR.JUSTICE R.SURESH KUMAR AND THE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case Appeal No.360 of 2022 Commissioner of Income Tax Chennai. .... Appellant Vs. M/s.TCP Limited 10, TCP Sapthagiri Bhavan Karpagamba Nagar Mylapore, Chennai 600 004. .... 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 09.08.2021 made in I.T.A.No.3358/2019. For Appellant : Mr.Karthik Ranganathan Senior Standing Counsel For Respondent : No appearance ----- J U D G M E N T (Delivered by R.SURESH KUMAR, J.) This Tax Case Appeal has been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, Chennai by raising the following substantial question of law: https://www.mhc.tn.gov.in/judis T.C.A.No.360 of 2022 " Whether the Tribunal was justified in upholding the order of the ITAT for the assessment year 2005-2006 by allowing the interest on borrowed capital which was paid to an Associate Company of the Respondent?" 2. It is brought to our notice by the learned Standing Counsel for the appellant Revenue that in the instant case, as per the CBDT's Circular No.9 of 2024 dated 17.09.2024 the tax effect is said to be less than the monetary limit imposed and therefore, the appeal can be disposed of, keeping the substantial questions of law raised in this appeal open for adjudication at a later point of time. 3. Recording the aforesaid submission made by the learned Standing Counsel for the appellant Revenue, this Tax Case Appeal is dismissed for low tax effect, keeping open the substantial questions of law for adjudication at appropriate stage. No costs. Consequently, connected miscellaneous petitions are closed. (R.S.K.,J.) (C.S.N.,J.) 11.11.2024 NCS : Yes/No KST To The Income Tax Appellate Tribunal 'A' Bench, Chennai. https://www.mhc.tn.gov.in/judis T.C.A.No.360 of 2022 R.SURESH KUMAR, J. AND C.SARAVANAN, J. KST T.C.A.No.360 of 2022 11.11.2024 https://www.mhc.tn.gov.in/judis

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