THE COMMSSIONER OF INCOME TAX vs. M/S.ADITYA BIRLA MONEY LTD.,

TCA/57/2017HC Madras25 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as withdrawn. The Revenue's counsel brought to the court's notice CBDT Circular No.17/2019 dated 08.08.2019, which stipulates that appeals shall not be filed or pursued by the Department before the High Court if the tax effect does not exceed Rs.1,00,00,000/-. The Revenue submitted that the tax effect in this appeal was below the threshold limit. Consequently, the appeal was dismissed as withdrawn, with the substantial questions of law left open for determination in an appropriate case. No costs were awarded. The specific findings of the ITAT on the classification of V-Sat equipments and the eligibility for 60% depreciation were not adjudicated upon by the High Court due to the withdrawal of the appeal.

What were the facts?

The Commissioner of Income Tax, Chennai (Revenue) filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order dated 05.08.2016 passed by the Income Tax Appellate Tribunal (ITAT), 'B' Bench, Chennai. The appeal pertains to the assessment year 2008-09 and concerns the eligibility of V-Sat Equipments for claiming depreciation at 60%. The assessee is M/s. Aditya Birla Money Limited. The Revenue's appeal questioned the ITAT's finding that V-Sat equipments are computers eligible for 60% depreciation, arguing they are communication expenses and should be classified as plant and machinery only.

What were the issues?

1. Whether the Tribunal was right in holding that V-Sat Equipments are computers eligible for claiming depreciation at 60%? (Question of law) 2. Is not the finding of the Tribunal bad by holding that V-Sat Equipments are computers eligible to claim depreciation at 60% especially when V-Sat Equipments are nothing but communication expenses used for transfer of data over large distances and has no characteristic of computer software and therefore are eligible to classify as plant and machinery only for the purpose of claiming depreciation? (Question of mixed law and fact) Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that V-Sat Equipments are communication expenses used for data transfer over long distances, lacking the characteristics of computer software. Therefore, they should be classified as plant and machinery only for depreciation purposes, not as computers eligible for 60% depreciation.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.57 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 No.57 of 2017 The Commissioner of Income Tax Chennai

.. Appellant Vs. M/s.Aditya Birla Money Limited 55, Ali Towers Greams Road Thousand Lights Chennai 600 006 PAN : AAACA7472K .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 05.08.2016 passed by the Income Tax Appellate Tribunal, 'B' Bench, Chennai, in I.T.A.No.270/Mds/2016. For Appellant : Mr.T.Ravikumar

Senior Standing Counsel For Respondent : Mr.Venkatanarayanan for M/s.Subbaraya Aiyar 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.57 of 2017 J U D G M E N T (Judgment was delivered by R. MAHADEVAN, J.) This tax case appeal has been filed by the appellant/Revenue, calling in question the correctness of the order dated 05.08.2016 passed by the Income Tax Appellate Tribunal, 'B' Bench, Chennai, in I.T.A.No.270/Mds/2016, relating to the assessment year 2008-09, by raising the following substantial questions of law : “1. Whether the Tribunal was right in holding that V-Sat Equipments are computers eligible for claiming depreciation at 60%? 2. Is not the finding of the Tribunal bad by holding that V-Sat Equipments are computers eligible to claim depreciation at 60% especially when V-Sat Equipments are nothing but communication expenses used for transfer of data over large distances and has no characteristic of computer software and therefore are eligible to classify as plant and machinery only for the purpose of claiming depreciation?” 2. When the matter was 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 Taxes, wherein, it is stipulated that appeal shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.57 of 2017 Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in this appeal is less than the threshold limit. 3. In the light of the aforesaid submissions made by the learned Standing Counsel for the appellant/Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs. [R.M.D,J.] [M.S.Q, J.] 25.08.2022 Internet : Yes gya To 1.The Deputy Commissioner of Income Tax Company Circle-I(1), Chennai 2.The Commissioner of Income Tax (Appeals)-I Chennai 3.The Income Tax Appellate Tribunal 'B' Bench, Chennai 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.57 of 2017 R. MAHADEVAN, J. AND MOHAMMED SHAFFIQ, J. gya Tax Case Appeal No.57 of 2017 25.08.2022

4/4 https://www.mhc.tn.gov.in/judis

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