THE DEPUTY COMMISSIONER OF INC vs. M/S.G.M. PENS INTERNATIONAL LT

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TCA/671/2019HC Madras10 September 2019Bench: Hon`ble Dr Justice VINEET KOTHARI5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the learned Standing Counsel for the Revenue brought to its notice a Circular instruction issued by the Central Board of Direct Taxes (CBDT) vide Circular No. 17/2019 dated August 8, 2019. This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court in cases where the tax effect does not exceed Rs. 1 Crore. In the present case, the tax effect was stated to be less than this monetary limit. Consequently, the High Court dismissed the appeal filed by the Revenue as not pressed. The Court explicitly stated that the substantial questions of law were kept open for determination in an appropriate case. No decision was made on the merits of the substantial questions of law.

What were the facts?

The Revenue, represented by the Deputy Commissioner of Income Tax, filed a Tax Case Appeal before the High Court of Judicature at Madras, challenging an order passed by the Income Tax Appellate Tribunal (ITAT), Madras 'B' Bench, Chennai, dated January 25, 2017. The appeal was filed against M/s. G.M. Pens International Ltd. The ITAT's order was in relation to ITA No. 2836/Mds/2016. The appeal raised substantial questions of law concerning the allowability of additional depreciation in subsequent years and the interpretation of Section 32(1) of the Income Tax Act, 1961.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal was right in holding that additional depreciation can be allowed in the next year if it could not be allowed in the earlier year, and if this holding was vague and wrong. 2. Whether the Tribunal was right in ignoring the jurisdictional High Court's decision in the case of M.M. Forgings Ltd., reported in 349 ITR 673. 3. Whether the Tribunal was right in ignoring the second proviso to Section 32(1) of the Income Tax Act, 1961, given that there are no statutory provisions to carry forward the balance additional depreciation. The Revenue contended that the Tribunal's decision on allowing additional depreciation in a subsequent year was incorrect and that the Tribunal failed to consider the binding precedent of the jurisdictional High Court and the specific provisions of Section 32(1). The judgment does not record any specific arguments made by the assessee, M/s. G.M. Pens International Ltd.

Which sections of the Income-tax Act were involved?

Section 32(1),Section 260A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Madras

Judgment dt. 18.09.2019 in T.C.(A) No.671 of 2019 Dy. CIT v. M/s.G.M.Pens International Ltd., Chennai-42 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18.09.2019 CORAM : THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case Appeal No.671 of 2019 The Deputy Commissioner of Income Tax, Corporation Circle 2(1), Nungambakkam, Chennai-600 034. ... Appellant Vs. M/s.G.M.Pens International Ltd., No.2, Janakpuri, Velachery-Bypass Road, Velachery, Chennai-600 042 PAN: AAACG1150E ... 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, Chennai, dated 25.01.2017 made in ITA No.2836/Mds/2016. __________ Page 1 of 5 http://www.judis.nic.in Judgment dt. 18.09.2019 in T.C.(A) No.671 of 2019 Dy. CIT v. M/s.G.M.Pens International Ltd., Chennai-42 For Appellant : Mr.V.Rajesh Jr. Standing Counsel for M/s.Karthik Ranganathan ORDER (Order of the Court was made by DR.VINEET KOTHARI,J.) This Tax Case Appeal has been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, Madras 'B' Bench, Chennai, by raising the following substantial questions of law: "1. Whether the Tribunal was right in holding additional depreciation can be allowed in the next year in case the same cannot be allowed in the earlier year is vague and wrong? 2. Whether the Tribunal was right in ignoring the jurisdictional High Court's decision in the case of M.M.Forgings Ltd., reported in 349 ITR 673? 3. Whether the Tribunal was right in ignoring the second provision of Section 32(1) when there are no provisions in the statute to carry forward the balance additional depreciation?” __________ Page 2 of 5 http://www.judis.nic.in Judgment dt. 18.09.2019 in T.C.(A) No.671 of 2019 Dy. CIT v. M/s.G.M.Pens International Ltd., Chennai-42 2. When the matter is taken up for hearing, the learned Standing Counsel brought to our notice the Circular instruction issued by the Central Board of Direct Taxes vide Circular No.17/2019 dated 08.08.2019 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 Crore. 3. In the instant case, the tax effect is said to be less than the monetary limit imposed and therefore, the appeal filed by the Revenue is dismissed as not pressed, keeping open the substantial questions of law for determination in an appropriate case. (V.K.,J.) (C.S.N.,J.) 18.09.2019 Index : Yes/No bbr To: 1. The Registrar, Income Tax Appellate Tribunal, Madras "B" Bench, Chennai. __________ Page 3 of 5 http://www.judis.nic.in Judgment dt. 18.09.2019 in T.C.(A) No.671 of 2019 Dy. CIT v. M/s.G.M.Pens International Ltd., Chennai-42 2. The Commissioner of Income Tax (Appeals)-VI, 221, 121 MG Road, Nungambakkam, Chennai-34. 3. The Assistant Commissioner of Income-tax, Corporate Circle 2(1) Chennai. __________ Page 4 of 5 http://www.judis.nic.in Judgment dt. 18.09.2019 in T.C.(A) No.671 of 2019 Dy. CIT v. M/s.G.M.Pens International Ltd., Chennai-42 DR.VINEET KOTHARI, J. and C.SARAVANAN, J. bbr

T.C.(A) No.671 of 2019 18.09.2019 __________ Page 5 of 5 http://www.judis.nic.in

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