PRINCIPAL COMMISSIONER OF IN vs. M/S. EAST COAST CONSTRUCTION

TCA.No.56 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 09.3.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MS.JUSTICE R.N.MANJULA Tax Case Appeal No.56 of 2020 The Principal Commissioner of Income Tax, Central-I, Chennai-34 ...Appellant Vs M/s.East Coast Constructions & Industries Ltd., Chennai-6. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 14.2.2018 passed by the Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai made in I.T.A.No.1431/Chny/2016 for the assessment year 2010-11. For Appellant : Mr.T.R.Senthilkumar, SSC assisted by Mrs.K.G.Usharani, JSC For Respondent : Mr.G.Baskar Judgment was delivered by

T.S.SIVAGNANAM

This appeal has been filed by the Revenue under Section 260A of 1/4 https://www.mhc.tn.gov.in/judis/ TCA.No.56 of 2020 the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 14.2.2019 made in I.T.A.No.1431/Chny/2016 on the file of the Income Tax Appellate Tribunal, Chennai, 'C' 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, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the assessee is eligible for deduction u/s 80IA(4) of the Income Tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the assessee is a 'developer' and not a 'contractor' without appreciating the findings of the Assessing Officer and therefore, considering the assessee eligible for deduction u/s 80IA(4) of the Income Tax Act, 1961? 3. Whether the Tribunal is correct in law in deleting the disallowance made under Section 14A of the Act by placing reliance on the decision of the Hon'ble High Court of Delhi in the case of Joint Investment Vs. CIT [372 ITR 694] for giving relief to the assessee by ignoring that the above decision is still pending 2/4 https://www.mhc.tn.gov.in/judis/ TCA.No.56 of 2020 in a higher forum for final decision ? 4. Whether the Tribunal is correct in law in placing reliance on the assessee's own case for the assessment year 2009-10 and deleting the disallowance u/s 14A of the Act without considering that the above decision was not accepted by the Department and the matter has not attained finality? 5. Whether the Tribunal is correct in law in considering the UPS as intergral part of the computer, whereas the computer can even function without any UPS? And 6. Whether the Tribunal is correct in law in allowing depreciation on UPS at 60% treating it as an integral part of a computer without appreciating that the UPS, which can only be considered as an accessory used to protect the unsaved data when there is a power failure and can only be grouped under the head 'office equipment'?” 3. We have heard Mr.T.R.Senthilkumar, learned Senior Standing Counsel assisted by Mrs.K.G.Usharani, Junior Standing Counsel appearing for the appellant/Revenue and Mr.G.Baskar, learned counsel appearing for the respondent/assessee. 4. The learned Senior Standing Counsel for the appellant submits that the above appeal is not pursued by the Revenue on 3/4 https://www.mhc.tn.gov.in/judis/ TCA.No.56 of 2020 T.S.SIVAGNANAM,J AND R.N.MANJULA,J RS 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. 09.3.2021 To The Income Tax Appellate Tribunal, 'C' Bench, Chennai. TCA.No.56 of 2020 4/4 https://www.mhc.tn.gov.in/judis/