PRINCIPAL COMMISSIONER OF IN vs. KHIVRAJ AUTOMOBILES AND INFR

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TCA/476/2021HC Madras20 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 by the Revenue's counsel that the appeal was not being pursued due to a low tax effect, as per CBDT Circular No. 17/2019. This circular increased the monetary limit for filing or pursuing appeals before the High Court to Rs. 1 Crore, and the tax effect in this particular case was below this limit. The Court explicitly stated that the substantial question of law framed in the appeal was 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 fixed in the circular, allowing for a decision on merits. No costs were awarded.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax, Corporate Circle-4(2), Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Madras, "D" Bench, dated June 6, 2017. The appeal pertains to Assessment Year 2014-15 and concerns the assessee, M/s. Khivraj Automobiles & Infrastructure Pvt. Ltd. The dispute revolves around the ITAT's decision to allow a deduction under Section 80IA(4)(iv) of the Act. The Revenue has challenged this order before the High Court of Judicature at Madras.

What were the issues?

1. Whether, on the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal is correct in allowing deduction under Section 80IA(4)(iv) of the Income Tax Act, 1961, when the assessee has taken the windmills on lease? The Revenue contended 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 before the High Court to Rs. 1 Crore. The tax effect in this case was stated to be below this threshold. The assessee's arguments are not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80IA(4)(iv)

AI-generated summary — verify with the full judgment below

T.C.A.No.476 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 20.09.2021 CORAM : THE HON'BLE MR. JUSTICE T.S. SIVAGNANAM AND THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP T.C.A.No.476 of 20

Principal Commissioner of Income Tax, Corporate Circle -4(2), Chennai – 600 034. ... Appellant Vs. M/s. Khivraj Automobiles & Infrastructure Pvt. Ltd., 617, Bharat Kumar Bhavan, Anna Salai, Thousand Lights, Chennai 600 006. ... 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 06.06.2017 in I.TA.No.790/Mds/2017, Assessment Year 2014-15. For Appellant : Mr.Karthik Ranganathan,

Senior Standing Counsel For Respondent : Mr.N.V.Balaji

Page 1/5 http://www.judis.nic.in T.C.A.No.476 of 2021 J U D G M E N T (Judgment was delivered by T.S. SIVAGNANAM, J.) We have heard Mr.Karthik Ranganathan, learned Senior Standing Counsel for the appellant/Revenue and Mr.N.V.Balaji, 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 06.06.2017 made in I.TA.No.790/Mds/2017 on the file of the Income Tax Appellate Tribunal, Madras, “D” Bench (“the Tribunal” for brevity) for the Assessment Year 2014-15. 3.The Revenue has raised the following substantial question of law: “Whether on the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal is correct in allowing deduction u/s 80IA(4)(iv) of the Income Tax Act 1961 when the assessee has taken the windmills on lease? Page 2/5 http://www.judis.nic.in T.C.A.No.476 of 2021 4.The learned Senior Standing Counsel for the 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 08.08.2019 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 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 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. (T.S.S., J.) (S.S.K., J.) 20.09.2021 (3/3) jeni/mkn

Page 3/5 http://www.judis.nic.in T.C.A.No.476 of 2021 Internet : Yes

Index : Yes / No To 1.The Income Tax Appellate Tribunal, Madras, “D” Bench 2.The Principal Commissioner of Income Tax, Corporate Circle -4(2), Chennai – 600 034. Page 4/5 http://www.judis.nic.in T.C.A.No.476 of 2021

T.S. SIVAGNANAM, J. and SATHI KUMAR SUKUMARA KURUP, J. jeni/mkn T.C.A.No.476 of 2021 20.09.2021 (3/3) Page 5/5 http://www.judis.nic.in

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