COMMISSIONER OF INCOME TAX vs. M/S.SUNDARAM CLAYTON LTD.,

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TCA/61/2016HC Madras22 September 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the Direct Tax Vivad Se Vishwas Act, 2020, was enacted to provide for the resolution of disputed tax matters. The learned counsel for the respondent/assessee submitted that the assessee had availed this scheme and had been issued Form-3 on 29.04.2021. Since the assessee had been issued Form-3, the Court found that nothing further survived for adjudication in the appeal. Consequently, the Tax Case Appeal was disposed of on this basis, without deciding the substantial question of law framed. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 08.11.2004 passed by the Income Tax Appellate Tribunal, Madras "B" Bench, in I.T.A.No.2326/Mds/1997. The appeal pertains to the assessment year 1993-94 and concerns the assessee, M/s.Sundaram Clayton Ltd. The core dispute revolved around whether a transaction was hit by Section 50 of the Act, despite the assessee having demarcated depreciable assets sold as part of an undertaking, with the transfer price fixed considering the value of both depreciable and immovable assets.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the transaction is not hit by the provision of Section 50 of the Income Tax Act, 1961, even though the assessee had clearly demarcated the depreciable assets sold during the year as part of the sale of the undertaking, and the transfer price was also fixed after taking into account the value of the depreciable assets, and the immovable assets of the assessee company? Assessee's Contention: The assessee had availed the Direct Tax Vivad Se Vishwas Scheme, 2020, and had been issued Form-3 on 29.04.2021. Revenue's Contention: The Revenue argued that the Tribunal erred in its finding regarding Section 50, given the clear demarcation of depreciable assets and the method of fixing the transfer price.

Which sections of the Income-tax Act were involved?

Section 260A,Section 50

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.61 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22.09.2021 CORAM : THE HON'BLE MR. JUSTICE T.S. SIVAGNANAM AND THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP Tax Case Appeal No.61 of 2016 Commissioner of Income Tax, Chennai. ... Appellant Vs.

M/s.Sundaram Clayton Ltd., No.24, (Old No.8), Haddows Road, Chennai – 600 006.

... Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras "B" Bench, dated 08.11.2004 in I.T.A.No.2326/Mds/1997. For Appellant : Mr.J.Narayanaswamy

Senior Standing Counsel For Respondent : Mr.R.Venkata Narayanan for M/s.Subbara Aiyar Padmanabhan Page 1/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.61 of 2016 J U D G M E N T (Judgment was delivered by T.S. SIVAGNANAM, J.) This appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity), is directed against the order dated 08.11.2004 passed by the Income Tax Appellate Tribunal, Madras "B" Bench, ('the Tribunal' for brevity) in I.T.A.No.2326/Mds/1997 for the assessment year 1993-94. The appellant/Revenue has raised the following Substantial Question of Law for consideration : "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the transaction is not hit by the provision of sec.50, even though the assessee had clearly demarcated the depreciable assets sold during the year, as part of the sale of the undertaking, and the transfer price was also fixed after taking into account the value of the depreciable assets, and the immovable assets of the assessee company?" Page 2/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.61 of 2016 2. We have heard Mr.J.Narayanaswamy, learned Senior Standing Counsel for the appellant/Revenue and Mr.R.Venkata Narayanan, learned counsel for the respondent/assessee. 3. It may not be necessary for this Court to decide the Substantial Question of Law framed for consideration on account of certain subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or incidental thereto. The Act of the Parliament received the assent of the President on 17th March 2020 and published in the Gazette of India on 17th March 2020. 4.Learned counsel for the respondent/assessee submitted that the assessee had availed the Vivad Se Vishwas Scheme and that the respondent/assessee had already been issued with Form–3 on 29.04.2021.

Page 3/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.61 of 2016 5.Since the respondent/assessee had been issued with Form-3, nothing survives for adjudication in the above appeal. Recording the submission made by the learned counsel for the respondent/assessee, the Tax Case Appeal stands disposed of. No costs. (T.S.S., J.) (S.S.K., J.) 22.09.2021

jeni/mkn

Internet : Yes

Index : Yes / No To 1. Income Tax Appellate Tribunal, Madras "B" Bench 2.The Commissioner of Income Tax, Chennai. Page 4/5 https://www.mhc.tn.gov.in/judis/ Tax Case Appeal No.61 of 2016 T.S. SIVAGNANAM, J. and SATHI KUMAR SUKUMARA KURUP, J. jeni/mkn Tax Case Appeal No.61 of 2016

22.09.2021 Page 5/5 https://www.mhc.tn.gov.in/judis/

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