PRL COMMISSIONER OF INCOME T vs. M/S THE INDIA CEMENTS LTD

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TCA/619/2019HC Madras08 August 2022Bench: THE HON`BLE MR. JUSTICE R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that during the pendency of the appeal, the assessee had availed the benefit of the Direct Tax Vivad Se Vishwas Act, 2020. The assessee filed the necessary declarations, which were accepted, and a Form 5 order for full and final settlement of tax arrears was issued by the Income Tax Department on 30.10.2021. This subsequent development was fairly conceded by the learned standing counsel for the Revenue. In view of this settlement, the High Court was of the opinion that nothing further survived for adjudication in the appeal. Therefore, the Tax Case Appeal was disposed of based on the settlement, and no costs were imposed. The connected miscellaneous petition was also closed. The specific findings on the substantial questions of law raised by the Revenue were not adjudicated on merits due to the settlement.

What were the facts?

The Revenue, Principal Commissioner of Income Tax 2, Chennai, filed a Tax Case Appeal under Section 260A of the Income Tax Act, 1961, against the order dated 12.05.2017 passed by the Income Tax Appellate Tribunal (ITAT), Madras 'C' Bench. The appeal pertains to Assessment Year 2004-05 and challenges the ITAT's decision regarding the deletion of an addition from deferred income to the profit and loss account and the taxability of a benefit received under lower customs duty. During the pendency of the appeal, the assessee, M/s. The India Cements Ltd., availed the benefit of the Direct Tax Vivad Se Vishwas Act, 2020, filing necessary declarations which were accepted, and a Form 5 order for full and final settlement of tax arrears was issued on 30.10.2021. The Revenue conceded this subsequent development.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether the ITAT was correct in deleting the addition of the amount transferred from deferred income (reserves) to the profit and loss account. 2. Whether the ITAT was correct in not appreciating that the assessee had benefited from lower customs duty after fulfilling export obligations not linked to a capital asset, making the revenue-nature benefit taxable as perquisite under Section 28(iv) of the Income Tax Act, 1961. The Revenue contended that the ITAT erred in deleting the addition. The Revenue also argued that the benefit of lower customs duty, being of a revenue nature and not linked to a capital asset, should be taxable as a perquisite under Section 28(iv). The judgment records no specific arguments from the assessee on these points as the matter was settled under the Vivad Se Vishwas Act.

Which sections of the Income-tax Act were involved?

Section 260A,Section 28(iv)

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.619 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :08.08.2022 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No.619 of 2019 & CMP.No.18135 of 2019 Principal Commissioner of Income Tax 2 No.121, Mahatma Gandhi Road, Chennai.

... Appellant Vs.

M/s. The India Cements Ltd., Dhun Buildings, No.827, Anna Salai, Chennai 600 002. ... Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras “C” Bench, dated 12.05.2017 passed in I.T.A.No.1340/Mds/2010 relating to Assessment Year 2004-05. Page 1/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.619 of 2019 For Appellant : Mr.Karthik Ranganathan, Standing Counsel For Respondent : Mr.Venkata Narayanan for Mr.Subbaraya Aiyar

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 12.05.2017 passed by the Income Tax Appellate Tribunal Madras 'C' Bench ('the Tribunal', for brevity) in I.T.A.No.1340/Mds/2010 for the Assessment Year 2004-05 on the following substantial questions of law : “1. Whether on the facts and in the circumstances of the case and in law, the ITAT was right in deleting the addition of the amount transferred from deferred income (reserves) to profit and loss account? 2. Whether on the facts and in the circumstances of the case and in law, the ITAT was right in not appreciating the fact that the assessee had taken the benefit of lower customs Page 2/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.619 of 2019 duty after fulfilling the obligations of export not linked to capital asset, hence, benefit of revenue nature is taxable as perquisite under section 28(iv) of the Income Tax Act, 1961?” 3.When the matter was taken up for consideration, the learned counsel appearing for the respondent / assessee submitted that during the pendency of this tax case appeal, the assessee has availed the benefit conferred under the Direct Tax Vivad Se Vishwas Act, 2020 and filed necessary declarations, which were accepted and Form 5 / order for full and final settlement of tax arrears, was also issued by the Income tax department, on 30.10.2021. The learned counsel has also filed Form 5 dated 30.10.2021 to that effect. 4.The aforesaid submission made by the learned counsel for the respondent/assessee has also been fairly conceded by the learned standing counsel appearing for the appellant/ Revenue. 5.In view of the subsequent development, this court is of the opinion that nothing survives for adjudication in this appeal. Recording the submission so made by the learned counsel on either side, the Tax Case Page 3/4 https://www.mhc.tn.gov.in/judis Tax Case Appeal No.619 of 2019 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. msr Appeal stands disposed of. No costs. Consequently, the connected miscellaneous petition is also closed. [R.M.D,J.] [M.S.Q, J.] 08.08.2022

msr

Internet : Yes

Index : Yes / No To 1. Principal Commissioner of Income Tax 2 No.121, Mahatma Gandhi Road, Chennai. 2. The Income Tax Appellate Tribunal Madras 'C' Bench, Chennai. Tax Case Appeal No.619 of 2019 & CMP.No.18135 of 2019 Page 4/4 https://www.mhc.tn.gov.in/judis

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