COMMISSIONER OF INCOME TAX, vs. RM.K. VISWANATHA PILLAI AND

T.C.A.No.723 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 29.08.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.723 of 2019 and CMP.No.21137 of 2019 Commissioner of Income Tax, Central Circle IV, Chennai. ... Appellant Versus M/s. Rm.K.Viswanatha Pillai & Sons, No.176F Trivandrum Road, Tirunelveli 627 003. PAN: AABFR 1307 C ... Respondent Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order dated 01.06.2016 passed by the Income Tax Appellate Tribunal, “B” Bench, Chennai, in I.T.A.No.1787/Mds/2014.

For Appellant : Mr.M.Swaminathan, Senior Standing Counsel Mrs.V.Pushpa, Standing Counsel Page 1/6 https://www.mhc.tn.gov.in/judis T.C.A.No.723 of 2019 For Respondent : Mr.Venkata Narayanan for M/s. Subbaraya Aiyar

JUDGMENT (Judgment of the Court was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 01.06.2016 passed by the Income Tax Appellate Tribunal, “B” Bench, Chennai, in I.T.A.No.1787/Mds/2014, relating to the assessment year 2009-2010, by raising the following substantial questions of law:- “(i) Whether on the facts and in the circumstances of the case and in law the Income Tax appellate Tribunal was legally justified in holding that the deduction of adhoc provision from the book value of stock to arrive the closing stock is permissible? (ii) Whether on the facts and in the circumstances of the case and in law the Income Tax Appellate Tribunal was correct in holding that assessee's method of valuation is acceptable when the Income Tax Appellate Tribunal itself has given a finding that such valuation is based on assessee's perception only and not based on any acceptable standard of accounting? (iii) Whether on the facts and in the circumstances of the Page 2/6 https://www.mhc.tn.gov.in/judis T.C.A.No.723 of 2019 case and in law the Income Tax Appellate Tribunal is right in giving relief on the ground that Assessing Officer failed to reconcile such stock with the by-numbers given when the assessee itself failed to do so during the course of search, and thus the burden remains un discharged on the assessee who made the said assertion? (iv) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was right in holding that the lease commitment charges which was initially paid by the partner of the assessee firm in his individual capacity and subsequently disclosed as expenditure in the books of accounts of the firm as donations to various temples business expenditure and hence allowable as revenue expenditure? (v) Whether on the facts and in the circumstances of the case and in law the Income Tax Appellate Tribunal was right in holding that the tenancy rights acquired by the assessee through donation is not capital asset and not covered under section 55(2) of the Income Tax Act 1961? (vi) Whether on the facts and in the circumstances of the case and in law the Income Tax Appellate Tribunal was correct in deleting the addition made towards stock discrepancy which was taken with the active participation of the assessee's staff under their own supervision and valuation thereof by relying on their own statement?" 2.When the matter was taken up for consideration, the learned counsel Page 3/6 https://www.mhc.tn.gov.in/judis T.C.A.No.723 of 2019 for the appellant / Revenue brought to the notice of this court the Circular 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. Consequently, connected miscellaneous petition is closed. (R.M.D., J.) (M.S.Q., J.) 29.08.2022

Internet : Yes

Index : Yes / No av Page 4/6 https://www.mhc.tn.gov.in/judis T.C.A.No.723 of 2019 To 1. The Income Tax Appellate Tribunal, “B” Bench, Chennai. 2. The Commissioner of Income Tax, Central Circle IV, Chennai. 3. The Deputy Commissioner of Income Tax, Central Circle - IV (1), Chennai. 4. The Commissioner of Income Tax (Appeals), Chennai. Page 5/6 https://www.mhc.tn.gov.in/judis T.C.A.No.723 of 2019 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. av T.C.A.No.723 of 2019 29.08.2022 Page 6/6 https://www.mhc.tn.gov.in/judis