PRINCIPAL COMMISSIONER OF INCOME TAX I vs. M/S.SENTHIL ENERGY PVT. LTD.,

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TCA/596/2021HC Madras15 October 2024Bench: Honourable Mr Justice R. SURESH KUMAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court did not decide the substantial questions of law on their merits. Instead, the Revenue submitted that the appeal was covered by the 'Low Tax Effect' circular (Circular No. 9/2024 dated 17.09.2024). Consequently, the High Court dismissed the appeal on this ground. The substantial questions of law were explicitly kept open to be decided at a later point in time. No order as to costs was made. The judgment does not record any finding or reasoning on the merits of the depreciation claim or the interpretation of the notification by the ITAT.

What were the facts?

The appeal was filed by the Principal Commissioner of Income Tax (Revenue) against the order of the Income Tax Appellate Tribunal (ITAT), Madras 'A' Bench, dated 28.04.2021. The assessee is M/s. Senthil Energy Pvt. Ltd. The dispute concerns the depreciation rate applicable to windmills. The ITAT had ruled in favour of the assessee. The High Court admitted the appeal on substantial questions of law. Subsequently, the Revenue submitted that the matter is covered by a recent circular on 'Low Tax Effect'.

What were the issues?

The High Court was to decide the following substantial questions of law: 1. Whether the ITAT's finding that windmills installed on or before 31.03.2012 are eligible for 80% depreciation, and that the Income Tax Rules emphasize installation rather than purchase/acquisition, was perverse. 2. Whether the ITAT was correct in holding that restricting depreciation to 15% on windmills purchased during FY 2013-14, following an amendment via Notification No. 15 of 2012 dated 30.03.2012, is contrary to Rule 5 of the Income Tax Rules, 1962. 3. Whether the ITAT correctly interpreted Notification No. 15 of 2012 dated 30.03.2012 to mean that pre-installed windmills are not covered by the amendment, thereby nullifying its enactment and the applicability of machinery provisions. Contentions: Revenue: Submitted that the matter is covered under the 'Low Tax Effect' as per Circular No. 9/2024 dated 17.09.2024. Assessee: No specific contentions recorded in the judgment for the assessee on the merits of the substantial questions of law.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

T.C.A.No.596 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15.10.2024 CORAM : THE HONOURABLE MR.JUSTICE R. SURESH KUMAR AND THE HONOURABLE MR.JUSTICE C. SARAVANAN T.C.A.No.596 of 2021 Principal Commissioner of Income Tax 1 No.63, Race Course Road Coimbatore 641 018. .. Appellant Vs. M/s. Senthil Energy Pvt. Ltd. 6th Floor, Senthil Towers Avinashi Road, Coimbatore 641 018 PAN: AAS CS 7231G .. Respondent Prayer: Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order of Income Tax Appellate Tribunal Madras “A” Bench dated 28.04.2021 passed in I.T.A.No.581/CHNY/2019. For the Appellant : Mr.Karthik Ranganathan Senior Standing Counsel For the Respondent : Mr.N.V.Balaji JUDGMENT (Order of the Court was made by R.SURESH KUMAR, J.) The present tax case appeal was admitted on 21.12.2021 by this Court on the following substantial questions of law:- Page 1 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.596 of 2021 "1. Whether on the facts and in the circumstances of the case, the ITAT was perverse in holding that the Income Tax Act specifically states that windmills installed on or before 31.03.2012 are eligible for depreciation @ 80% and the Income Tax Rules does not give emphasize for purchase / acquisition of windmills, but only talks about installation? 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that restricting the rate of depreciation to 15% on windmills purchased by the assessee during the Financial Year 2013-14 in terms of amendment vide notification No.15 of 2012 dated 30.03.2012, is contrary to the provisions of Rule 5 of Income Tax Rules, 1962? 3. Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in interpreting the Notification No.15 of 2012 dated 30.03.2012, whereby the pre installed windmills would not be covered by the amendment, thereby nullifying its enactment and defeating the applicability of the machinery provisions?" 2. It is submitted by the learned Senior Standing Counsel Page 2 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.596 of 2021 appearing for the appellant Revenue that this matter is covered under the Low Tax Effect as per the recent Circular dated 17.09.2024, in Circular No.9/2024. 3. Hence, this appeal stands dismissed, as covered under the low tax effect and the substantial questions of law arising in this appeal are kept open to be decided at the later point of time. There shall be no order as to costs. (R.S.K., J.) (C.S.N, J) 15.10.2024 Neutral Citation:Yes/No drm Page 3 of 4 https://www.mhc.tn.gov.in/judis T.C.A.No.596 of 2021 R. SURESH KUMAR, J. AND C. SARAVANAN

, J.

(drm) T.C.A.No.596 of 2021 15.10.2024 Page 4 of 4 https://www.mhc.tn.gov.in/judis

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