COMMISIONER OF INCOME TAX-I vs. M/S. MADRAS SPINNERS LTD.,

Tax Case Appeal No.584 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 17.12.2021 CORAM THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No. 584 of 2021 Commissioner of Income Tax - I Coimbatore .. Appellant Versus M/s. Madras Spinners Limited Race Course Mansion 8/1-M, Race Course Coimbatore – 641 018 .. Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 05.08.2004 passed by the Income Tax Appellate Tribunal, “C” Bench, Chennai in I.T.A.No.1718/Mds/1996. For Appellant : Mr.M.Swaminathan, Senior Standing Counsel Mrs.Usha Rani, Junior Standing Counsel For Respondent : Mr.Subburaja Aiyar 1/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.584 of 2021 JUDGMENT (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 '01.03.2018 passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai, in I.T.A.No.1718/Mds/1996, relating to the assessment years 1992-93, by raising the following substantial questions of law:- “(i) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in setting aside the order of the assessing officer disallowing the claim of foreign exchange difference of Rs.13,44,043/- as revenue expenditure and directing the assessing officer to decide the matter afresh on the basis of the decision of the Kerala High Court on the Revenue's appeal for the assessment year 1991-92 challenging the finding of the Cochin Bench of the Tribunal holding that the original cost of the imported machinery was allowable as revenue expenditure? (ii) Whether on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal was right in observing that irrespective of the finding regarding the nature of the expenditure on the original cost of machinery, the expenditure on account of exchange difference was to be treated as capital 2/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.584 of 2021 expenditure in view of the decision of the jurisdictional High Court on this issue? 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 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 this appeal is less than the threshold limit. 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 questions of law for determination in an appropriate cases. No costs. [R.M.D,J.] [M.S.Q, J.] 17.12.2021

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Index : Yes / No dhk R. MAHADEVAN, J. 3/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.584 of 2021 AND MOHAMMED SHAFFIQ, J. dhk To 1. The Income Tax Appellate Tribunal, Madras “C” Bench. 2.The Commissioner of Income Tax - I Coimbatore 3. Deputy Commissioner of Income-tax Special Range, Trichur Tax Case Appeal No. 584 of 2021 17.12.2021 4/4 https://www.mhc.tn.gov.in/judis