PRINCIPAL COMMISSIONER OF vs. M/S.CRI PUMPS PVT.LTD.,

T.C.A.Nos.407 and 408 of 2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 25.08.2022 CORAM THE HON'BLE Mr. JUSTICE R. MAHADEVAN AND THE HON'BLE Mr. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal Nos.407 and 408 of 2017 AND C.M.P.No.10238 of 2017 The Principal Commissioner of Income Tax-I No.63, Race Course Road Coimbatore 641 018 .. Appellant in both T.C.As Vs. M/s.CRI Pumps Pvt. Ltd. 7/46-1, Keeranatham Road Saravanamatti Coimbatore 641 035 PAN : AAACC 9497N .. Respondent in both T.C.As Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961 against the common order dated 16.11.2016 passed by the Income Tax Appellate Tribunal, 'D' Bench, Chennai, in respective I.T.A.No.1246/Mds/2012 and 2014/Mds/2013. For Appellant : Mr.M.Swaminathan in both T.C.As Mrs.V.Pushpa Standing Counsels For Respondent : Mr.S.Sridhar in both T.C.As 1/4 https://www.mhc.tn.gov.in/judis T.C.A.Nos.407 and 408 of 2017 C O M M O N J U D G M E N T (Judgment was delivered by R. MAHADEVAN, J.) These tax case appeals have been filed by the appellant/Revenue, calling in question the correctness of the common order dated 16.11.2016 passed by the Income Tax Appellate Tribunal, 'D' Bench, Chennai, in respective I.T.A.No.1246/Mds/2012 and 2014/Mds/2013, for the assessment years 2008-09 and 2009-10. 2. By order dated 21.07.2020, this Court admitted the aforesaid tax case appeals on the following substantial questions of law : “1. Whether on the facts and circumstance of the case, the ITAT is justified in allowing the royalty payment when the transfer of trade mark "CRI" was not allowed during the merger proceedings before the Hon'ble High Court and which was subsequently transferred from CRI Industries P Ltd to CRI Amalgamations P Ltd through a family arrangement for a meager amount of Rs.I000/-? 2. Whether on the facts and circumstance of the case, the ITAT is justified in allowing the royalty payment, when the value of the CRI Trade Mark as fixed by the directors of the transferor company was low and the payment made to the holding company as royalty for using the trade mark was excessive and unreasonable having regard to the fair market value of the trade mark itself? 2/4 https://www.mhc.tn.gov.in/judis T.C.A.Nos.407 and 408 of 2017 3. Whether on the facts and circumstance of the case the Hon'ble ITAT is justified in not considering the section 40A(2)(a) and that there is a violation of section 40A(2) (b) of the Income Tax Act irrespective of the fact that the recipient has offered the same to tax?” 3. When these matters were taken up for consideration, the learned Standing Counsels 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 appeals 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 these appeals are less than the threshold limit. 4. In the light of the aforesaid submissions made by the learned Standing Counsels for the appellant/Revenue, the present appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. Consequently, connected miscellaneous petition is closed. [R.M.D,J.] [M.S.Q, J.] 3/4 https://www.mhc.tn.gov.in/judis T.C.A.Nos.407 and 408 of 2017 25.08.2022

gya R. MAHADEVAN, J. AND MOHAMMED SHAFFIQ, J. gya To 1.The Assistant Commissioner of Income Tax Company Circle-IV(2), Coimbatore 2.The Commissioner of Income Tax (Appeals)-I Coimbatore 3.The Income Tax Appellate Tribunal 'D' Bench, Chennai T.C.A.Nos.407 and 408 of 2017 25.08.2022

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