PRINCIPAL COMMISSIONER OF vs. CIBI INTERNATIONAL PVT LTD.,

TCA/576/2018HC Madras24 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court noted the submission by the Revenue's counsel regarding CBDT Circular No. 17/2019, which sets a monetary limit of Rs. 1,00,00,000/- for filing or pursuing appeals before the High Court. The Revenue confirmed that the tax effect in the present appeal was below this threshold. Consequently, the High Court dismissed the appeal as withdrawn, without deciding on the substantial question of law. The court explicitly stated that the substantial question of law was kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax-3, Coimbatore, appealed against an order of the Income Tax Appellate Tribunal (ITAT), Madras 'A' Bench, dated June 7, 2017. This order pertained to assessment year 2011-12 and concerned M/s. Cibi International Pvt. Ltd. The appeal was filed under Section 260A of the Income Tax Act, 1961. The core dispute revolved around whether certain amounts advanced by M/s. Eastman Exports Global Clothing Pvt. Ltd. to the assessee should be treated as income in the hands of the assessee.

What were the issues?

1. Whether the ITAT was correct in law in holding that when the assessee has no right to use the facilities set up in the money advanced by M/s. Eastman Exports Global Clothing Pvt. Ltd., the same cannot be treated as income in the hands of the assessee? (Question of law) Assessee's Contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, the issue framed by the High Court implies that the assessee argued that the advanced money, for which the assessee had no right to use the facilities set up, should not be treated as income. Revenue's Contentions: The Revenue's counsel brought to the court's notice CBDT Circular No. 17/2019 dated August 8, 2019. This circular 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 less than the stipulated threshold limit.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.576 of 2018 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 24.08.2022 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.576 of 2018 The Principal Commissioner of Income Tax-3, No.63, Race Course Road, Coimbatore. ... Appellant Versus M/s.Cibi International Pvt. Ltd., No.92/4, Angeripalayam Road, Opp. Bishop School, Tirupur - 641 603. ... Respondent (PAN No.AAE CC 0288 M) Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras “A” Bench, dated 07.06.2017 in I.TA.No.1731/Mds/2016. For Appellant : M/s.M.Swaminathan &

V. Pushpa

Standing Counsel For Respondent : Mr.R.Sivaraman Page 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.576 of 2018 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, challenging the order dated 07.06.2017 passed by the Income Tax Appellate Tribunal, Madras 'A' Bench in I.TA.No.1731/Mds/2016, relating to the assessment year 2011-12, by raising the following substantial question of law:- "Whether the ITAT is correct in law in holding that when the assessee has no right to use the facilities set up in the money advanced by M/s.Eastman Exports Global Clothing Pvt. Ltd., that the same cannot be treated as income in the hands of the assessee? " 2. When the matter was taken up for consideration, the learned 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 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. Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.576 of 2018 3. In the light of the aforesaid submissions made by the learned 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 question of law for determination in an appropriate case. No costs. (R.M.D., J.) (M.S.Q., J.) 24.08.2022 r n s

Internet : Yes.

Index : Yes / No. Page 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.576 of 2018 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. r n s To 1. The Income Tax Appellate Tribunal Madras 'A' Bench, Chennai. 2. The Commissioner of Income Tax, (Appeals)-II, Coimbatore. 3. The Joint Commissioner of Income-tax, Tirupur Range, Tirupur. T.C.A.No.576 of 2018 24.08.2022 Page 4/4 https://www.mhc.tn.gov.in/judis

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