THE COMMISSIONER OF INCOME T vs. M/S. C.H. ROBINSON WORLDWIDE

TCA/455/2021HC Madras08 September 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM5 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The dismissal was based on the submission made by the Revenue's counsel regarding the low tax effect in the case, which was below the threshold limit stipulated in CBDT Circular No. 17/2019. Consequently, the substantial questions of law framed by the Revenue were left open. The Court granted liberty to the Revenue to mention the case for restoration if the tax effect was found to be above the threshold limit. No costs were awarded. The Tribunal's order dated 01.06.2016 was not decided on merits.

What were the facts?

The Revenue, Commissioner of Income Tax, Corporate Circle I(2), Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 01.06.2016 passed by the Income Tax Appellate Tribunal, Madras, “D” Bench. The appeal pertained to Assessment Year 2009-10 and concerned the assessee, M/s. C.H. Robinson Worldwide Freight India P Ltd. The appeal was preferred against the Tribunal's decision regarding the allowability of depreciation on non-complete fees and the comparison of the assessee's functions with another entity for arriving at an Arm's Length Price. The Revenue sought to challenge the Tribunal's findings on these points.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that depreciation is allowed on non-complete fee at the rate of 25%? (Question of law) 2. Is not the reasoning and finding of the Tribunal bad and perverse, especially when the functions of the assessee and that of Hyderabad Meizes Cargo P Ltd are different and therefore cannot be compared with one another for arriving at Arms Length Price? (Question of mixed law and fact) The Revenue argued that the Tribunal's findings on both issues were incorrect. The Revenue's counsel submitted that the appeal was not being pursued due to low tax effect, citing CBDT Circular No. 17/2019 which increased the monetary limit for appeals to the High Court to Rs. 1 Crore. The Revenue stated that the tax effect in this case was below this threshold. No specific arguments were recorded for the assessee.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.455 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 08.09.2021 CORAM : THE HON'BLE MR. JUSTICE T.S. SIVAGNANAM AND THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP T.C.A.No.455 of 2021 The Commissioner of Income Tax, Corporate Circle I(2), Chennai. ... Appellant Vs. M/s.C.H.Robinson Worldwide Freight India P Ltd, No.18, Lokesh Towers, No.4, 2nd Floor, Kodambakkam High Road, Chennai 600 034 ... Respondent Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras, “D” Bench, dated 01.06.2016 in I.TA.No.490/Mds/2015, Assessment Year 2009-10. For Appellant : Mr.T.Ravi Kumar Senior Standing Counsel For Respondent : Mr.R.Venkatanarayanan for M/s.Subbaraya Aiyar Padmanabhan Page 1/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.455 of 2021 J U D G M E N T (Judgment was delivered by T.S. SIVAGNANAM, J.) We have heard Mr.T.Ravi Kumar, learned Senior Standing Counsel for the appellant/Revenue and Mr.R.Venkatanarayanan for M/s.Subbaraya Aiyar Padmanabhan, learned counsel for the respondent/assessee. 2.The appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (“the Act” for brevity) is directed against the order dated 01.06.2016 made in I.T.A.No.490/Mds/2015 on the file of the Income Tax Appellate Tribunal, Madras, “D” Bench (“the Tribunal” for brevity) for the Assessment Year 2009-10. 3.The appellant/Revenue has raised the following substantial questions of law in this appeal : “1)Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that deprecation is allowed on non complete fee at the rate of 25%? Page 2/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.455 of 2021 2)Is not the reasoning & finding of the Tribunal bad and perverse especially when the functions of the assessee and that of the Hyderabad Meizes Cargo P Ltd are different and therefore cannot be compared with one another for arriving at Arms Length Price? 4.The learned Senior Standing Counsel 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 on account of the Low Tax Effect. The substantial questions of law framed are left open. In the event the tax effect in this case is above the threshold limit fixed in the said Circular, liberty is granted to the Revenue Page 3/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.455 of 2021 to make a mention to this Court to restore the appeal to be heard and decided on merits. No costs. (T.S.S., J.) (S.S.K., J.) 08.09.2021

jeni/mkn

Internet : Yes

Index : Yes / No To 1.The Income Tax Appellate Tribunal, Chennai, “D” Bench 2.The Commissioner of Income Tax, Corporate Circle I(2), Chennai. Page 4/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.455 of 2021

T.S. SIVAGNANAM, J. and SATHI KUMAR SUKUMARA KURUP, J. jeni/mkn T.C.A.No.455 of 2021 08.09.2021 Page 5/5 https://www.mhc.tn.gov.in/judis/

Recent GST High Court judgments

Search GST case law →