COMMISSIONER OF INCOME TAX vs. THE SRI VENKATESA MILLS LTD.,

PDF · subscribers
TCA/977/2019HC Madras16 March 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal did not raise a substantial question of law. The Court noted that the ITAT's order was based entirely on factual considerations placed before it. The Tribunal had concluded that the Assessing Officer was not justified in treating the replacement of machinery as capital in nature and disallowing the assessee's claim. The Court found that the ITAT's decision was consistent with its own findings in the assessee's own case for earlier assessment years, which were purely factual. Therefore, the thin line of difference sought to be pointed out by the Revenue did not constitute a substantial question of law. The appeal was dismissed on this ground.

What were the facts?

The Revenue, Commissioner of Income-tax, Coimbatore, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 03.04.2002 passed by the Income-tax Appellate Tribunal (ITAT), Chennai Bench 'B'. The appeal pertains to assessment years 1992-93, 1993-94, and 1994-95. The ITAT had allowed the replacement cost of machinery as revenue expenditure and cancelled reassessments. The Revenue's appeal was admitted on 16.12.2019. The respondent assessee, The Sri Venkatesa Mills Ltd., did not appear before the High Court.

What were the issues?

1. Whether the Tribunal is justified in allowing the replacement cost of machinery as revenue expenditure and cancelling the reassessments, ignoring the fact that the law was amended with effect from 01.04.1989 with regard to Section 147 governing the assessment years under consideration? (Question of law) Assessee's arguments: Not recorded as the assessee did not appear. Revenue's arguments: The Revenue contended that the Tribunal erred in allowing the replacement cost of machinery as revenue expenditure and cancelling reassessments. They argued that the law was amended with effect from 01.04.1989 concerning Section 147, which should have governed the assessment years in question. The Revenue relied on the amended provisions of Section 147.

Which sections of the Income-tax Act were involved?

Section 260A,Section 147

AI-generated summary — verify with the full judgment below

T.C.A.No.977 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 16.03.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MS.JUSTICE R.N.MANJULA T.C.A.No.977 of 2019 Commissioner of Income-tax, Coimbatore. .. Appellant -vs- The Sri Venkatesa Mills Ltd., Palani Road, Venkatesa Mills Post, Coimbatore-642 128. .. Respondent Appeal under Section 260A of the Income Tax Act, 1961 against the order dated 03.04.2002 made in I.T.A.Nos.713 to 715/Mds/2001 on the file of the Income-tax Appellate Tribunal Chennai Bench 'B' for the assessment years 1992-93, 1993-94 & 1994-95 respectively. For Appellant : Mr.T.R.Senthil Kumar, Senior Standing Counsel assisted by Ms.K.G.Usharani Junior Standing Counsel For Respondent : No appearance ****** 1/4 https://www.mhc.tn.gov.in/judis/ T.C.A.No.977 of 2019 JUDGMENT (Judgment of the Court was delivered by T.S.Sivagnanam, J.) This appeal, filed by the Revenue under Section 260A of the Income Tax, 1961, is directed against the order dated 03.04.2002, made in I.T.A.Nos.713 to 715/Mds/2001 passed by the Income-tax Appellate Tribunal Chennai Bench 'B' for the assessment years 1992-93, 1993-94 & 1994-95 respectively. 2.The appeal was admitted on 16.12.2019, on the following substantial question of law:- “Whether the Tribunal is justified in allowing the replacement cost of machinery as revenue expenditure and cancelling the reassessments, ignoring the fact that the law was amended with effect from 01.04.1989 with regard to Section 147 governed the assessment years under consideration?”

3.We have elaborately heard Mr.T.R.Senthil Kumar, learned Senior Standing Counsel assisted by Ms.K.G.Usharani, learned Junior Standing Counsel appearing for the appellant/Revenue. 4.Though the respondent/assessee has been served and their name is printed in the cause list, none appears for the assessee. 2/4 https://www.mhc.tn.gov.in/judis/ T.C.A.No.977 of 2019 5.After hearing the learned Senior Standing Counsel for the Revenue and carefully perusing the materials placed on record, we find that the order passed by the Tribunal is entirely on the facts, which were placed before the it and after taking note of the factual position, the Tribunal concluded that the Assessing Officer was not justified in treating the replacement of machinery as capital in nature and disqualifying the claim of the assessee. Since the matter has been decided solely on the factual consideration and the decisions of the Tribunal in the assessee's own case for the earlier assessment years, the thin line of difference which is sought to be pointed out in this appeal, cannot be regarded as a substantial question of law, as the decision taken by the Tribunal in the assessee's own case for the earlier assessment years was purely on facts. Therefore, we find that there is no substantial question of law arising for consideration in this appeal. 6.Accordingly, this appeal stands dismissed, as there is no substantial question of law arises for consideration. No costs. (T.S.S., J.) (R.N.M., J.) 16.03.2021 abr To The Income-tax Appellate Tribunal Chennai Bench 'B', Chennai. 3/4 https://www.mhc.tn.gov.in/judis/ T.C.A.No.977 of 2019 T.S.Sivagnanam, J. and R.N.Manjula, J. (abr) T.C.A.No.977 of 2019 16.03.2021

4/4 https://www.mhc.tn.gov.in/judis/

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →