PRINCIPAL COMMISSIONER OF IN vs. M/S.SAKTHI SUGARS LTD

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TCA/692/2019HC Madras10 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the assessee had availed the Direct Tax Vivad Se Vishwas Act, 2020, and had obtained a full and final settlement of tax arrears on 07.10.2021. This subsequent development was fairly conceded by the Revenue's counsel. In view of this subsequent development, the Court was of the opinion that nothing survived for adjudication in the appeal. Accordingly, recording the submissions of both sides, the Tax Case Appeal was disposed of. No costs were awarded. The issue regarding the disallowance of the revenue loss claim and the ITAT's order remitting it back to the AO was not decided on merits. The operative direction was to dispose of the appeal as settled.

What were the facts?

The appeal was filed by the Principal Commissioner of Income Tax (Revenue) against an order dated 09.04.2019 passed by the Income Tax Appellate Tribunal (ITAT) 'C' Bench, Chennai. The ITAT had remitted back to the Assessing Officer (AO) the issue of disallowance of a revenue loss claim of Rs. 5 Crores on investment in shares of a wholly-owned subsidiary. The assessment year in question was 2011-12. The Revenue contended that the AO had made the disallowance after verifying balance sheet entries and that the assessee had not produced fresh material before the ITAT. During the pendency of the appeal before the High Court, the assessee, M/s. Sakthi Sugars Ltd., availed the benefit of the Direct Tax Vivad Se Vishwas Act, 2020, filed declarations, and received an order for full and final settlement of tax arrears on 07.10.2021.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Tribunal is right in remitting back to the AO the issue of disallowance of revenue loss claim of Rs. 5 Crores on investment in shares in the wholly owned subsidiary of the assessee, more so, when the AO made the disallowance after verifying the entries in the Balance Sheet and also when the assessee did not adduce any fresh material before the ITAT to hold it otherwise? (Question of law/mixed law and fact, concerning Section 260-A of the Income Tax Act, 1961). Assessee's Contention: The assessee submitted that it had availed the benefit of the Direct Tax Vivad Se Vishwas Act, 2020, filed necessary declarations, which were accepted, and an order for full and final settlement of tax arrears was issued on 07.10.2021. Revenue's Contention: The learned Standing Counsels for the Revenue fairly conceded to the submission made by the assessee's counsel regarding the settlement under the Vivad Se Vishwas Act.

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.692 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 10.08.2022 CORAM THE HON'BLE Mr. JUSTICE R. MAHADEVAN AND THE HON'BLE Mr. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.692 of 2019 AND C.M.P.No.20862 of 2019 The Principal Commissioner of Income Tax 1 No.63, Race Course Road Coimbatore

.. Appellant Vs. M/s.Sakthi Sugars Ltd. 180, Course Road Coimbatore 641 018 PAN : AAD CS 0651 B

.. Respondent Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order dated 09.04.2019 passed by the Income Tax Appellate Tribunal 'C' Bench, Chennai, in I.T.A.No.1524/Chny/2017. For Appellant Mr.M.Swaminathan Mrs.V.Pushpa Standing Counsels For Respondent Mr.R.Venkatanarayan for M/s.Subbaraya Aiyar 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.692 of 2019 J U D G M E N T (Judgment was delivered by R. MAHADEVAN, J.) This Tax Case Appeal arises from the order dated 09.04.2019 passed by the Income Tax Appellate Tribunal 'C' Bench, Chennai, in I.T.A.No. 1524/Chny/2017, relating to the assessment year 2011-12, by raising the following substantial question of law: “Whether on the facts and circumstances of the case, the Tribunal is right in remitting back to AO the issue of disallowance of revenue loss claim of Rs.5Crores on investment in shares in the wholly owned subsidiary of the assessee, more so, when the AO made the disallowance after verifying the entries in the Balance Sheet and also when the assessee did not adduce any fresh material before the ITAT to hold it otherwise ?" 2. When this 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 07.10.2021. The learned counsel has also filed Form-5 dated 07.10.2021 to that effect. 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.692 of 2019 3. The aforesaid submission made by the learned counsel for the respondent/assessee has also been fairly conceded by the learned Standing Counsels appearing for the appellant/ Revenue. 4. 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, this Tax Case Appeal stands disposed of. No costs. Consequently, connected miscellaneous petition is closed. [R.M.D,J.] [M.S.Q, J.] gya 10.08.2022

To 1.The Principal Commissioner of Income Tax 1 No.63, Race Course Road Coimbatore 2.The Income Tax Appellate Tribunal 'C' Bench, Chennai 3.The Deputy Commissioner of Income Tax Company Circle-I(1), Coimbatore 4.The Commissioner of Income Tax (Appeals)-1 Coimbatore 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.692 of 2019 R. MAHADEVAN, J. AND MOHAMMED SHAFFIQ, J. gya T.C.A.No.692 of 2019 10.08.2022 4/4 https://www.mhc.tn.gov.in/judis

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