THE COMMISSIONER OF INCOME T vs. M/S.CHEMFAB ALKALIS LTD.,

TCA.No.504 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.1.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MS.JUSTICE R.N.MANJULA Tax Case Appeal No.504 of 2020

The Commissioner of Income Tax, Chennai-34 ...Appellant Vs M/s.Chemfab Alkalis Ltd., Chennai-14 ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 20.11.2017 passed by the Income Tax Appellate Tribunal, Madras 'D' Bench, Chennai made in I.T.A.No.2810/Mds/2014 for the assessment year 2010-11. For Appellant: Mr.J.Narayanaswamy, SSC For Respondent : Mr.A.S.Sriraman for Mr.S.Sridhar Judgment was delivered by

T.S.SIVAGNANAM

This appeal has been filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order 1/4 https://www.mhc.tn.gov.in/judis/ TCA.No.504 of 2020 dated 20.11.2017 made in I.T.A.No.2810/Mds/2014 on the file of the Income Tax Appellate Tribunal, Chennai, 'D' Bench ('the Tribunal' for brevity) for the assessment year 2010-11. 2. The Revenue has filed this appeal by raising the following substantial questions of law: “1. Whether the Tribunal was right in deleting the disallowance of Rs.2,93,25,806/- claimed as payment made towards sales commission especially when the agents to whom the said sum was paid did not even know the basic facts such as the nature of services rendered, commodity that they were canvassing for the assessee, location of the company, the details of the purchasers, etc.? and 2. Whether the sales commission claimed is to be allowed even if the assessee has not satisfactorily proved with documentary evidence to the satisfaction of the Assessing Officer about the existence of such agents, their services rendered to the assessee to prove that it was a genuine transaction?” 3. We have heard Mr.J.Narayanaswamy, learned Standing Senior Counsel appearing for the appellant/Revenue and Mr.A.S.Sriraman, learned counsel accepting notice for the respondent/assessee. 2/4 https://www.mhc.tn.gov.in/judis/ TCA.No.504 of 2020 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 08.8.2019 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. 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 raised 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 a petition before this Court to restore the appeal to be heard and decided on merits. No costs. 11.1.2021 To The Income Tax Appellate Tribunal, 'D' Bench, Chennai. RS 3/4 https://www.mhc.tn.gov.in/judis/ TCA.No.504 of 2020 T.S.SIVAGNANAM,J AND R.N.MANJULA,J RS TCA.No.504 of 2020 11.1.2021 4/4 https://www.mhc.tn.gov.in/judis/