THE COMMISSIONER vs. M/S RECKITT BENCKISER SCHOLL

T.C.A.Nos.542 to 544 of 2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 25.08.2022 CORAM THE HON'BLE Mr. JUSTICE R. MAHADEVAN AND THE HON'BLE Mr. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal Nos.542 to 544 of 2017 The Commissioner of Income Tax Chennai

.. Appellant in all T.C.As Vs. M/s.Reckitt Benckiser Scholl India Ltd. Plot F 73/74, SIPCOT Industrial Park Irungattukottai, Sriperumbudur Kancheepuram 602 117 PAN : AAFCS5498E .. Respondent in all T.C.As Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961 against the common order dated 28.10.2016 passed by the Income Tax Appellate Tribunal, 'D' Bench, Chennai, in respective I.T.A.Nos.952/Mds/2014, 676/Mds/2015 and 962/Mds/2015. For Appellant : Mr.T.Ravi Kumar in all T.C.As Standing Counsel For Respondent : Mr.S.P.Chidambaram in all T.C.As

1/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.542 to 544 of 2017 C O M M O N J U D G M E N T (Judgment was delivered by R. MAHADEVAN, J.) These tax case appeals have been filed by the appellant/Revenue, calling in question the correctness of the common order dated 28.10.2016 passed by the Income Tax Appellate Tribunal, 'D' Bench, Chennai, in respective I.T.A.Nos.952/Mds/2014, 676/Mds/2015 and 962/Mds/2015, for the assessment years 2009-10 and 2010-11. 2. By order dated 27.06.2019, this Court admitted the aforesaid tax case appeals on the following substantial questions of law : TCA.No.542 of 2017 : “Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the telecommunication charges and expenditure incurred in foreign currency were to be excluded both from the export turnover and also from the total turnover, which is contrary to the Section?” TCA.No.543 of 2017 : “i. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that gain or forex exchange fluctuation is eligible for deduction under Section 10B even though the said foreign exchange gain are not derived from the eligible undertaking from export of article? ii. Whether the finding of the Tribunal is proper especially when the Hon'ble Apex Court in the case of Sterling Foods reported in 237 2/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.542 to 544 of 2017 ITR 579 has held that source of a particular income, on which, deduction is sought for, must directly emerge from the running of industrial undertaking yielding profit and gains, which is not the case on hand since foreign exchange fluctuation has no nexus with the exports made? and iii. Whether the reasoning and finding of the Tribunal is proper especially when the forex gains are not derived from the eligible undertaking of export of articles, but is received after the completion of the exports and therefore, not eligible for deductions?” TCA.No.544 of 2017 : “Whether, on the facts and circumstances of the case, the Tribunal was right in holding that telecommunication charges and expenditure incurred in foreign currency were to be excluded both from the export turnover and also from the total turnover, which is contrary to the intention of the legislature?” TCA.Nos.542 & 544 of 2017 : “i. Whether, on the facts and circumstances of the case, the Tribunal was right in directing the Assessing Officer to recompute the income in the light of the decision of the Special Bench in the case of Sak Soft by excluding the freight and insurance expenses both from the export turnover and also from the total turnover while computing deduction under Section 10B? and ii. Is not the finding of the Tribunal bad especially when Section 10B(2)(iv), the term 'export turnover' had been defined whereby it would not include freight telecommunication charges, insurance attributable to be delivery of articles or things or computer software outside India or expenses, if any incurred in foreign exchange while providing the technical services outside India?” 3. When these matters were taken up for consideration, the learned Standing Counsel for the appellant/Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019, issued by the Central Board Direct 3/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.542 to 544 of 2017 Taxes, wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in these appeals are less than the threshold limit. 4. In the light of the aforesaid submissions made by the learned Standing Counsel for the appellant/Revenue, the present appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. [R.M.D,J.] [M.S.Q, J.] 25.08.2022

Index : Yes / No gya 4/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.542 to 544 of 2017 To 1.The Deputy Commissioner of Income Tax Company Circle-V(1), Chennai 2.The Income Tax Officer (Hqrs.) O/o.The Director of Income Tax International Taxation, Chennai 3.The Income Tax Appellate Tribunal 'D' Bench, Chennai R. MAHADEVAN, J. 5/6 https://www.mhc.tn.gov.in/judis T.C.A.Nos.542 to 544 of 2017 AND MOHAMMED SHAFFIQ, J. gya Tax Case Appeal Nos.542 to 544 of 2017 25.08.2022

6/6 https://www.mhc.tn.gov.in/judis