PRINCIPAL COMMISSIONER OF vs. M/s.Chettinad Logistics Pvt

T.C.A.No.787 of 2017 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 25.08.2022 CORAM THE HON'BLE Mr. JUSTICE R. MAHADEVAN AND THE HON'BLE Mr. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.787 of 2017 AND C.M.A.No.19859 of 2017 The Principal Commissioner of Income Tax Central-I No.108, Mahatma Gandhi Road Chennai 600 034

.. Appellant Vs. M/s.Chettinad Logistics (P) Ltd. 5th Floor, Rani Seethai Hall 603, Anna Salai Chennai 600 006 PAN : AABCC4551C

.. Respondent Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order dated 01.07.2016 passed by the Income Tax Appellate Tribunal 'B' Bench, Chennai, in I.T.A.No.1495/Mds/2012. For Appellant Mr.T.Ravikumar Senior Standing Counsel For Respondent Mr.S.Sridhar 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.787 of 2017 J U D G M E N T (Judgment was delivered by R. MAHADEVAN, J.) This tax case appeal has been filed by the appellant/Revenue, calling in question the correctness of the order dated 01.07.2016 passed by the Income Tax Appellate Tribunal 'B' Bench, Chennai, in I.T.A.No.1495/Mds/2012, relating to the assessment year 2008-09, by raising the following substantial questions of law : “1. Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal was right in directing the Assessing Officer to recompute the deduction under Section 10B by excluding both freight on export and insurance from export turnover as well as from total turnover? 2. Whether on the facts and in the circumstances of the case and in law the Appellate Tribunal is correct in not appreciating that clause (iv) to Explanation 2 to Section 10B specifically excludes foreign exchange expenditure from export turn over only and nothing can be added is the statue to exclude the foreign currency expenditure from total turnover also, for the purpose of deduction u/s 10A of the Income Tax Act? 3. Whether on the facts and circumstances of the case and in law, the Appellate Tribunal was right in holding that provision for loss can be allowed out of total estimated loss prior to completion of the contract and crystallization of the actual loss? 4. Whether on the facts and circumstances of the case and in law, the appellate Tribunal was right in relying on the Accounting Standard 7 whereas the guidelines therein provide only a frame work for projection of true or real profits under Companies Act but not taxable income under Income Tax Act? 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.787 of 2017 5. Whether on the facts and circumstances of the case and in law, is it correct to allow anticipated losses that might arise in future, which will distort taxable income under income Taxable Act and as such against the provisions of the Act?” 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 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.] gya 25.08.2022

R. MAHADEVAN, J. 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.787 of 2017 AND MOHAMMED SHAFFIQ, J. gya To 1.The Assistant Commissioner of Income Tax Company Circle-I(3), Chennai 2. The Commissioner of Income Tax (Appeals)-III Chennai 3.The Income Tax Appellate Tribunal 'B' Bench, Chennai T.C.A.No.787 of 2017 25.08.2022 (2/2) 4/4 https://www.mhc.tn.gov.in/judis