THE COMMISSIONER OF INCOME T vs. M/S.GOLDQUEST INTERNATIONAL

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TCA/841/2015HC Madras27 August 2019Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The dismissal was based on the submission by the Revenue that the appeal was not being pursued due to low tax effect, in terms of CBDT Circular No. 17/2019, which increased the monetary limit for filing appeals before the High Court to Rs. 1 Crore. The Court noted that the tax effect in this case was less than the threshold limit. Consequently, the substantial questions of law framed at the time of admission were left open. The Revenue was granted liberty to mention the case for restoration if the tax effect was found to be above the threshold limit. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated December 18, 2013, passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'B' Bench. The appeal pertains to assessment year 2007-08. The ITAT's order had deleted additions made by the Assessing Officer concerning personal travel expenses of the Managing Director and sales promotion expenses. The High Court admitted the appeal on substantial questions of law. Subsequently, the Revenue sought to withdraw the appeal, citing a CBDT Circular No. 17/2019 which increased the monetary limit for pursuing appeals before the High Court to Rs. 1 Crore. The Revenue stated that the tax effect in this case was below this threshold.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in deleting the addition of Rs. 2,69,382/- on account of personal travel expenses incurred by the Managing Director, which were not explained by the assessee for its business purposes? (Question of law and fact, relating to Section 37 of the Income Tax Act, 1961). 2. Whether, on the facts and circumstances of the case, the ITAT was right in law in deleting the addition on account of sales promotion expenses, when the assessee failed to furnish any details and genuineness of the expenditure, especially as all sales were made to a sister concern located in the same premises? (Question of law and fact, relating to Section 37 of the Income Tax Act, 1961). Assessee's Contentions: The judgment does not record any specific contentions made by the assessee before the High Court. The assessee was represented by counsel Ms. J. Sreevidhya. Revenue's Contentions: The Revenue, represented by Mr. Karthik Ranganathan, Senior Standing Counsel, submitted that the appeal was not being pursued due to low tax effect, as per CBDT Circular No. 17/2019, which raised the monetary limit for High Court appeals to Rs. 1 Crore. The tax effect in this case was stated to be below this limit.

Which sections of the Income-tax Act were involved?

Section 260A,Section 37

AI-generated summary — verify with the full judgment below

TCA.No.841 of 2015 In the High Court of Judicature at Madras Dated : 27.08.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.841 of 2015 The Commissioner of Income Tax, Chennai. ...Appellant Vs M/s.Goldquest International Pvt. Ltd., Raintree Place, 9th Floor, Mc.Nichols Road, Chetput, Chennai - 600 031. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 18.12.2013 made in ITA.No.1445/MDS/2013 on the file of the Income Tax Appellate Tribunal, Chennai 'B' Bench for the assessment year 2007-08. For Appellant : Mr.Karthik Ranganathan, SSC assisted by Mr.S.Rajesh, SC For Respondent : Ms.J.Sreevidhya JUDGMENT (Judgment was delivered by T.S.Sivagnanam,J.) We have heard Mr.Karthik Ranganathan, learned Senior Standing Counsel, assisted by Mr.S.Rajesh, learned Standing Counsel appearing for the 1/4 http://www.judis.nic.in TCA.No.841 of 2015 appellant/revenue and Ms.J.Sreevidhya, learned counsel appearing for the respondent/assessee. 2.This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 is directed against the order dated 18.12.2013 made in ITA.No.1445/MDS/2013 on the file of the Income Tax Appellate Tribunal, Chennai 'B' Bench for the assessment year 2007-08. 3.The appeal was admitted on 29.09.2015 on the following substantial questions of law : “(i) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in deleting the addition on account of personal travel expenses of Rs.2,69,382/- incurred by the Managing Director of the company on five dates, which were not explained by the assessee for its business purpose? (ii) Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in deleting the addition on account of sales promotion expenses, when the assessee failed to furnish any details and genuineness of the expenditure, as the entire sales were made to the sister concern only, which is functioning in the next floor of the same premises?" 4.The learned Senior Standing Counsel for the appellant submits that the above appeal is not pursued by the Revenue on account of the low tax 2/4 http://www.judis.nic.in TCA.No.841 of 2015 effect in terms of Circular No.17/2019 dated 08.8.2019 issued by the Central Board of Direct Taxes. By the said Circular, the monetary limit for filing or pursuing an appeal before the High Court has been increased to Rs.1 Crore. It is further submitted that the tax effect in this case is less than the threshold limit. 5.In the light of the said submissions, the above tax case appeal is dismissed on account of the low tax effect. The substantial questions of law framed are left open. In the event the tax effect is above the threshold limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeal to be heard and decided on merits. No costs. (T.S.S.J.) (V.B.S.J.) 27.08.2019 cse Speaking (or) Non Speaking Order Index : Yes (or) No To 1.M/s.Goldquest International Pvt. Ltd., Raintree Place, 9th Floor, Mc.Nichols Road, Chetput, Chennai - 600 031. 2.The Income Tax Appellate Tribunal, Chennai 'B' Bench. 3/4 http://www.judis.nic.in TCA.No.841 of 2015 T.S.SIVAGNANAM,J. AND V.BHAVANI SUBBAROYAN,J. cse TCA.No.841 of 2015 27.08.2019 4/4 http://www.judis.nic.in

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