PRINCIPAL COMMISSIONER OF vs. M/S LEO FASTENERS

T.C.A.No.661 of 2018 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.08.2022 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.661 of 2018 The Principal Commissioner of Income Tax, D.P.Thottam, Muthialpet, Puducherry. ... Appellant Versus M/s.Leo Fasteners, A-27A, Industrial Estate, Thattanchavady, Pondicherry - 605 009. ... Respondent (PAN No.AABFL 0652 J) Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras “B” Bench, dated 08.02.2018 in I.TA.No.2164/Mds/2017. For Appellant : Mr.J.Narayanaswamy Senior Standing Counsel For Respondent : Mrs.J.Sree Vidya J U D G M E N T Page 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.661 of 2018 (Judgment was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 08.02.2018 passed by the Income Tax Appellate Tribunal, Madras 'B' Bench, in I.T.A.No.2164/Mds/2017, relating to the assessment year 2013-14, by raising the following substantial questions of law:- "(i) Whether the Appellate Tribunal is correct in law in relying upon the Apex Court judgment in the case of CIT Vs. Woodward Governor India (P) Ltd., [312 ITR 254] for allowing the foreign exchange fluctuations under Section 37 of the IT Act, when the facts of the present case are different which involves foreign exchange loss on capital account on purchase of wind mills? (ii) Whether the Appellate Tribunal is correct in holding that the loss incurred by the assessee in foreign currency fluctuation shall be considered as expenses and the same is to be allowed under Section 37 of the Act, without considering that the assessee obtained the loan for acquiring Wind Mills and the currency was converted into foreign currency to reduce interest, thus the loan amount for acquiring capital asset has to be capitalized including the losses?" 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 Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.661 of 2018 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. 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 case. No costs. (R.M.D., J.) (M.S.Q., J.) 26.08.2022 r n s

Internet : Yes.

Index : Yes / No. Page 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.661 of 2018 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. r n s To 1. The Income Tax Appellate Tribunal Madras 'B' Bench, Chennai. 2. The Commissioner of Income Tax (Appeals), Puducherry. 3. The Deputy Commissioner of Income Tax, Pondicherry Circle, Pondicherry. T.C.A.No.661 of 2018 26.08.2022 Page 4/4 https://www.mhc.tn.gov.in/judis