M/S. VISHNU LAKSHMI MILLS PVT vs. THE DEPUTY COMMISSIONER

PDF · subscribers
TCA/983/2015HC Madras26 April 2021Bench: Hon`ble Mr Justice M.DURAISWAMY5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law framed for consideration. The Court noted that the Direct Tax Vivad Se Vishwas Act, 2020, had been enacted to provide for the resolution of disputed tax. The learned counsel for the appellant/assessee informed the Court that the assessee had been issued Form-3 on 25.01.2021, and consequently, sought permission to withdraw the appeal. In view of this submission, the Tax Case Appeal was dismissed as withdrawn. No costs were awarded. The specific findings of the ITAT on the capital versus revenue nature of the expenditure and the allowability of replacement costs were not adjudicated upon by the High Court.

What were the facts?

The assessee, M/s. Vishnu Lakshmi Mills Pvt. Ltd., filed an appeal before the High Court of Judicature at Madras against an order of the Income Tax Appellate Tribunal (ITAT), Madras 'B' Bench, dated 19.08.2015. This order pertained to the assessment year 2007-08. The appeal was admitted on substantial questions of law concerning the classification of expenditure incurred by the assessee. The expenditure in question amounted to Rs.1,24,11,640/-, which the ITAT had held to be capital in nature and thus liable for disallowance. The appeal also touched upon the allowability of expenditure on the replacement of components for carding and roving machines and ring frames.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in holding that the expenditure incurred by the appellant of an amount of Rs.1,24,11,640/- is capital in nature and liable to be disallowed, concerning Section 37 of the Income Tax Act, 1961. 2. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in noting that the expenditure incurred by the appellant on replacement of components for carding and roving machines and ring frames is revenue in nature and liable to be allowed in its computation of income, concerning Section 37 of the Income Tax Act, 1961. Assessee's Contentions: The assessee, through its counsel, sought to withdraw the appeal. This request was made subsequent to the enactment of the Direct Tax Vivad Se Vishwas Act, 2020, and after the assessee had been issued Form-3 under the said Act. Revenue's Contentions: The judgment does not record any specific contentions made by the Revenue's counsel on the merits of the substantial questions of law, given the assessee's request to withdraw the appeal.

Which sections of the Income-tax Act were involved?

Section 260A,Section 37

AI-generated summary — verify with the full judgment below

Tax Case Appeal No.983 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.04.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA Tax Case Appeal No.983 of 2015 M/s.Vishnu Lakshmi Mills Pvt. Ltd., 1C, Gleneden Place, 310, Poonamallee High Road, Kilpauk, Chennai – 600 010.

... Appellant Vs.

The Deputy Commissioner of Income-Tax, Company Circle-III (4), 121, Nungambakkam High Road, Chennai – 600 034. ... Respondent

Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras "B" Bench, dated 19.08.2015 passed in I.T.A.No.2205/Mds/2014. For Appellant : Mr.G.Baskar For Respondent : Mr.M.Swaminthan

Senior Standing Counsel Page 1/5 http://www.judis.nic.in Tax Case Appeal No.983 of 2015 J U D G M E N T (Delivered by M.DURAISWAMY, J.) This appeal filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity), is directed against the order dated 19.08.2015 passed by the Income Tax Appellate Tribunal, Madras "B" Bench, ('the Tribunal' for brevity) in I.T.A.No.2205/Mds/2014 for the assessment year 2007-08. The above appeal has been admitted on 16.10.2015 on the following Substantial Questions of Law: "1.Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in holding that the expenditure incurred by the appellant of an amount of Rs.1,24,11,640/- is capital in nature and liable to be disallowed? 2.Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in noting that the expenditure incurred by the appellant on replacement of components for carding and roving machines and ring frames is revenue in nature and liable to be allowed in its computation of income?” Page 2/5 http://www.judis.nic.in Tax Case Appeal No.983 of 2015 2. We have heard Mr.G.Baskar, learned counsel for the appellant/assessee and Mr.M.Swaminathan, learned Standing Counsel for the respondent/Revenue. 3. It may not be necessary for this Court to decide the Substantial Questions of Law framed for consideration on account of certain subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) to provide for resolution of disputed tax and for matters connected therewith or incidental thereto. The Act of the Parliament received the assent of the President on 17th March 2020 and published in the Gazette of India on 17th March 2020. 4. We are informed by the learned counsel for the appellant/ assessee that the assessee had already been issued with Form-3 on 25.01.2021 and the learned counsel for the appellant seeks permission of this Court to withdraw the appeal. Page 3/5 http://www.judis.nic.in Tax Case Appeal No.983 of 2015 5. In view of the submission made by the learned counsel for the appellant, the Tax Case Appeal stands dismissed as withdrawn. No costs. [M.D., J.] [R.H., J.] 26.04.2021 (1/2) mkn

Index : Yes/No

Internet : Yes

To 1. Income Tax Appellate Tribunal, Madras "B" Bench 2.The Deputy Commissioner of Income Tax, Company Circle-III (4), 121, Nungambakkam High Road, Chennai – 600 034. Page 4/5 http://www.judis.nic.in Tax Case Appeal No.983 of 2015 M. DURAISWAMY, J. and R. HEMALATHA, J. mkn Tax Case Appeal No.983 of 2015

26.04.2021 (1/2) Page 5/5 http://www.judis.nic.in

More judgments on Section 37

All 4,334 judgments and leading authorities on Section 37 →

Recent GST High Court judgments

Search GST case law →