M/S SIMPSON & GENERAL FINANCE vs. THE ASSISTANT COMMISSIONER OF

TCA/496/2015HC Madras01 March 2021Bench: Hon`ble Mr Justice M.DURAISWAMY5 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law framed for consideration. This was due to the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The learned counsel for the appellant/assessee informed the Court that the assessee had been issued Form-3 under this Act and sought permission to withdraw the appeal. In view of this submission, the Tax Case Appeal was dismissed as withdrawn. No costs were awarded. The specific findings of the ITAT on the lease rentals and depreciation are not discussed or adjudicated upon by the High Court.

What were the facts?

The assessee, M/s. Simpson & General Finance Co. Ltd., filed an appeal before the High Court of Judicature at Madras against an order dated 22.08.2013 passed by the Income Tax Appellate Tribunal (ITAT), Madras "C" Bench. The appeal pertained to the assessment year 2009-10. The ITAT's order was challenged by the assessee. The High Court admitted the appeal on substantial questions of law. Subsequently, the Direct Tax Vivad Se Vishwas Act, 2020, was enacted. The assessee informed the court that they had been issued Form-3 under this Act and sought permission to withdraw the appeal.

What were the issues?

1. Whether, in the case of a "Finance Lease" transaction, the entire lease rental should be offered as income, contrary to Accounting Standard – 19 issued by the Institute of Chartered Accountants of India? (Question of law) 2. Whether the Tribunal was justified in not directing the Assessing Officer to consider that in a Financial Lease, only the interest income accrued to the assessee should be taxed, not the entire lease rental, and consequently withdraw the claim of depreciation on leased assets? (Question of mixed law and fact) Assessee's contentions: The assessee argued that for finance lease transactions, only the interest component of the lease rental should be taxed, aligning with Accounting Standard – 19, and that depreciation on leased assets should be considered. The assessee relied on Accounting Standard – 19. Revenue's contentions: The judgment does not record any specific contentions made by the revenue on these issues.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.496 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 01.03.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE T.V. THAMILSELVI Tax Case Appeal No.496 of 2015 M/s.Simpson & General Finance Co. Ltd., 861/862, Anna Salai, Chennai – 600 002.

... Appellant Vs.

The Assistant Commissioner of Income Tax, Company Circle – VI(3), Chennai – 600 034. ... Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras "C" Bench, dated 22.08.2013 passed in I.T.A.No.344/Mds/2013. For Appellant : Mr.R.Venkata Narayanan for M/s.Subbaraya Aiyar For Respondent : Mr.J.Narayanaswamy

Senior Standing Counsel Page 1/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.496 of 2015 J U D G M E N T (Delivered by M.DURAISWAMY, J.) This appeal filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity), is directed against the order dated 22.08.2013 passed by the Income Tax Appellate Tribunal, Madras "C" Bench, ('the Tribunal' for brevity) in I.T.A.No.344/Mds/2013 for the assessment year 2009-10. The above appeal has been admitted on 23.07.2015 on the following Substantial Questions of Law: “1.Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that in the case of “Finance Lease” transaction the entire lease rental should be offered as income contrary to the Accounting Standard – 19 dealing with accounting of leases issued by the Institute of Chartered Acountants of India? 2.Whether on the facts and in the circumstances of the case, the Tribunal was justified in not directing the Assessing Officer to consider that in the case of Financial Lease only the interest income accrued to assessee should be taxed and not the entire lease rental as assessed by him and consequentially withdraw the claim of depreciation on leased assets?” Page 2/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.496 of 2015 2. We have heard Mr.R.Venkata Narayanan for M/s.Subbaraya Aiyar, learned counsel for the appellant/assessee and Mr.J.Narayanaswamy, learned Senior Standing Counsel for the respondent/Revenue. 3. It may not be necessary for this Court to decide the Substantial Questions of Law framed for consideration on account of certain subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or incidental thereto. The Act of the Parliament received the assent of the President on 17th March 2020 and published in the Gazette of India on 17th March 2020. 4. We are informed by the learned counsel for the appellant/ assessee that the assessee had already been issued with Form-3 on 23.12.2020 and the learned counsel for the appellant seeks permission of this Court to withdraw the appeal. Page 3/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.496 of 2015 5. In view of the submission made by the learned counsel for the appellant, the Tax Case Appeal stands dismissed as withdrawn. No costs. [M.D., J.] [T.V.T.S., J.] Index : Yes/No 01.03.2021 Internet : Yes

mkn To 1. Income Tax Appellate Tribunal, Madras "C" Bench 2.The Assistant Commissioner of Income Tax, Company Circle – VI(3), Chennai – 600 034. Page 4/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.496 of 2015 M. DURAISWAMY, J. and T.V. THAMILSELVI, J. mkn Tax Case Appeal No.496 of 2015

01.03.2021 Page 5/5 https://www.mhc.tn.gov.in/judis/

Recent GST High Court judgments

Search GST case law →