Principal Commissioner of Income Tax 2, vs. Equitas Holding Pvt Ltd.,

T.C.A.No.437 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.12.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MR.JUSTICE R.PONGIAPPAN T.C.A.No.437 of 2020 Principal Commissioner of Income Tax 2, Corporate Circle – 2(1), Chennai – 600 034.

.. Appellant Versus M/s.Equitas Holding Pvt Ltd., No.672, 4th Floor, Temple Towers, Anna Salai, Nandanam, Chennai – 600 035 PAN:AAACU 9126C

.. Respondent Prayer:- Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai made in I.T.A.No.1424/Mds/2016 dated 13.02.2017 relating to the Assessment Year 2012-13. For Appellant : Mr.R.Karthik Ranganathan Senior Standing counsel 1/4 https://www.mhc.tn.gov.in/judis/ T.C.A.No.437 of 2020 JUDGMENT [Order of the Court was made by

T.S.SIVAGNANAM

, J.]

We have heard Mr.R.Karthik Ranganathan, learned Senior Standing counsel appearing for the appellant / Revenue. 2. This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 is directed against the order dated 13.02.2017 made in I.T.A.No.1424/Mds/2016 on the file of the Income Tax Appellate Tribunal, Chennai 'C' Bench for the Assessment Year 2012-13. 3. The Revenue has raised the following Substantial Questions of Law for consideration: “1.Whether on the facts and circumstances of the case and in law, the ITAT was correct and justified in holding that investment made in subsidiary companies is not liable for disallowance u/s 14A when the provisions of the said section as well as Rule 8D does not provide for any such exception? 2. Whether on the facts and in the circumstances of the case and in law, the ITAT 2/4 https://www.mhc.tn.gov.in/judis/ T.C.A.No.437 of 2020 was correct in holding that when the assessee made investment in the subsidiary companies, the intention of the assessee is not for earning exempt income but because of commercial expediency? 3. Whether on the facts and in the circumstances of the case and in law, the ITAT was correct in not appreciating the CBDT circular No.5/2014 wherein it is clarified that, disallowance u/s.14A r.w.r.8D has to be made even if the taxpayer in a particular year not earned any exempt income?” 4. The learned counsel for the appellant / Revenue 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 08.8.2019 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. 3/4 https://www.mhc.tn.gov.in/judis/ T.C.A.No.437 of 2020 T.S.SIVAGNANAM, J. AND R.PONGIAPPAN, J. 5. In the light of the said submissions, the above tax case appeal is dismissed on account of the low tax effect. The substantial questions of law framed are left open. In the event the tax effect is above the threshold limit fixed in the said circular, liberty is granted to the Revenue to file an application before this Court to restore this appeal to be heard and decided on merits. No costs. (T.S.S.,J) (R.P.A.,J) 11.12.2020 Kak Index: Yes / No Internet: Yes / No Speaking Order/Non-Speaking Order To The Income Tax Appellate Tribunal, 'C' Bench, Chennai. T.C.A.No.437 of 2020 4/4 https://www.mhc.tn.gov.in/judis/