COMMISSIONER OF INCOME TAX vs. M/S. S.S.F. LTD., FORMERLY

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TCA/753/2017HC Madras07 June 2019Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages
AI SummaryDismissed

What did the High Court hold?

The Revenue's appeal was dismissed on the ground of low tax effect. The learned Standing Counsel for the Revenue fairly submitted that the appeal was not being pursued due to the low tax effect, referencing Circular No. 3/2018 issued by the Central Board of Direct Taxes. This circular revises monetary limits for filing appeals, and under the revised limits, the Revenue would not be entitled to pursue appeals where the tax effect does not exceed Rs. 50 lakhs. Consequently, the present appeal was dismissed based on this circular. The substantial questions of law raised for consideration were expressly left open and not decided on merits. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed an appeal against the order of the Income Tax Appellate Tribunal (ITAT), Chennai 'C' Bench, dated July 29, 2016. The appeal pertained to Assessment Year 2010-11 and concerned the assessee, M/s. S.S.F. Limited (formerly Southern Sea Foods Ltd.). The core of the dispute involved whether unabsorbed depreciation from Assessment Years 1999-2000 to 2001-02 could be set off against the income of Assessment Year 2010-11. The Revenue's appeal was filed under Section 260A of the Income Tax Act, 1961.

What were the issues?

The Tribunal was asked to decide two substantial questions of law: 1. Whether the Tribunal was right in holding that unabsorbed depreciation pertaining to Assessment Years 1999-2000 to 2001-02 could be set off against the income of Assessment Year 2010-11, in contravention to Section 32(2)(iii)(b) as it stood prior to the Finance Act, 2001? 2. Whether the Tribunal was right in holding that unabsorbed depreciation pertaining to Assessment Years 1999-2000 to 2001-02 could be set off beyond eight assessment years and allow set off against the income of Assessment Year 2010-11? The Revenue argued that the set-off was impermissible under the prevailing provisions of Section 32(2). The judgment does not record specific arguments from the assessee.

Which sections of the Income-tax Act were involved?

Section 32(2),Section 260A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 07.06.2019 CORAM THE HON'BLE MR.JUSTICE T.S.SIVAGNANAM AND THE HON'BLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case (Appeal) No.753 of 2017 Commissioner of Income Tax, Chennai. ... Appellant - Vs - M/s.S.S.F.Limited (Formerly known as Southern Sea Foods Ltd.), K-16, First Main Road Anna Nagar East, Chennai – 600 012 PAN AABCS 0556K ... Respondent Prayer : Appeal under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal “C” Bench, Chennai in I.T.A.No.1303/Mds/2016 dated 29.07.2016. For Appellant : Mr.T.R.Senthil Kumar, Standing Counsel JUDGMENT (Judgment of the Court was delivered by T.S.SIVAGNANAM, J.) This appeal by the Revenue is directed against the order dated 29.07.2016 passed by the Income Tax Appellate Tribunal, Chennai 'C' Bench in I.T.A.No.1303/Mds/2016 for the assessment year 2010-11, raising the following substantial questions of law for consideration. “1. Whether on the facts and in the circumstances of the case, the tribunal was right in holding that the unabsorbed depreciation pertaining to the assessment year 1999-2000 to 2001-02, could be set off against the income of the assessment year 2010-11 in contravention to Section 32(2)(iii)(b) as it stood prior to Finance Act, 2001? 2. Whether on the facts and circumstances of the case, the http://www.judis.nic.in 2 tribunal was right in holding that unabsorbed depreciation pertaining to assessment year 1999-2000 to 2001-02, could be set off beyond eight assessment years and allow set off against the income of the present asessment year 2010-11?” 2. Mr.T.R.Senthil Kumar, learned Standing Counsel for the appellant Revenue, fairly submits that this appeal is not being pursued by the Revenue on account of low tax effect. In this regard, the learned counsel has placed before us the Circular issued by the Central Board of Direct Taxes viz., Circular No.3/2018, F.No.279/Misc.142/2007-ITJ (Pt), Government of India, Department of Revenue, Central Board of Direct Taxes dated 11.07.2018, wherein there has been a revision of monetary limits for filing of appeals by the Department before the Tribunal / High Court and Special Leave Petitions / Appeals before the Honourable Supreme Court. In terms of the monetary limit fixed in Circular No.3 of 2018, the Revenue would not be entitled to pursue the appeal, if already filed or file fresh appeals for the tax which does not exceed the monetary limit of Rs.50 lakhs. 3. Thus, applying the said circular, the present appeal is dismissed on the ground of low tax effect. Needless to state that the substantial questions of law raised for consideration are left open. No costs. (T.S.S.J.) (V.B.S.J.) 07-06-2019 KST Index : Yes/No Internet : Yes/No To http://www.judis.nic.in 3 1. Commissioner of Income Tax, Chennai 2. The Income Tax Appellate Tribunal, Chennai “C' Bench. http://www.judis.nic.in 4 T.S.SIVAGNANAM, J. AND V.BHAVANI SUBBAROYAN, J. kst T.C.(A) No.753 of 2017 07.06.2019 http://www.judis.nic.in

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