THE COMMISSIONER OF INCOMETA vs. M/S. BAILEY HYDROPOWER (P)LTD

PDF · subscribers
TCA/995/2015HC Madras05 July 2021Bench: THE HON`BLE MR.JUSTICE M.DURAISWAMY5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the Tax Case Appeal as withdrawn on account of low tax effect, in line with CBDT Circular No. 17/2019. The Court noted the submission by the Revenue that the tax effect was below the increased monetary limit for pursuing appeals before the High Court. Consequently, the substantial questions of law framed at the time of admission were left open. The Revenue was granted liberty to seek restoration of the appeal if the tax effect was found to be above the threshold limit, to be heard and decided on merits. 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 of the Income Tax Appellate Tribunal, Chennai ('C' Bench) dated 02.01.2015. The appeal pertains to Assessment Year 2005-2006 and challenges the Tribunal's decision regarding the allowability of income from sale of scraps for deduction under Section 10B of the Income Tax Act. The assessee is M/s. Bailey Hydropower (P) Ltd. The appeal was admitted on substantial questions of law. The Revenue later sought to withdraw the appeal due to low tax effect, citing CBDT Circular No. 17/2019.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Tribunal was right in allowing income from sale of scraps while considering the deduction under Section 10B of the Income Tax Act? 2. Is the Tribunal's finding incorrect in holding that scrap sale was not part of export turnover and allowing 100% deduction on it while computing deduction under Section 10B? 3. Whether the Tribunal's finding is proper, especially when the scrap is sold in the domestic market, is a byproduct, and has no connection with the export of goods or merchandise? Assessee's Contention: Not recorded in the judgment. Revenue's Contention: The Revenue submitted that the appeal was not being pursued due to low tax effect, as per CBDT Circular No. 17/2019, which increased the monetary limit for appeals to High Courts to Rs. 1 Crore. The tax effect in this case was stated to be below this threshold.

Which sections of the Income-tax Act were involved?

Section 10B,Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.995 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 05.07.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMY AND THE HON'BLE MRS.JUSTICE R. HEMALATHA Tax Case Appeal No.995 of 2015 The Commissioner of Income Tax, Chennai. ... Appellant /Respondent Vs. M/s.Bailey Hydropower (P) Ltd., SIPCOT Industries Park, Irungattukottai, Sriperumbadur - 692 105. PAN: AABCB 1804F ...Respondent/Appellant PRAYER: Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chennai

"C"

Bench,

dated

02.01.2015

passed

in I.T.A.No.1265/Mds/2013 for the assessment year 2005-2006. For Appellant : Mr. T.Ravikumar

Senior Standing Counsel Page 1/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.995 of 2015 For Respondent : Ms.Vardhini Karthik for Ms.J. Sree Vidya JUDGMENT (Judgment of the Court was delivered by M. DURAISWAMY, J.) We have heard Mr. T.Ravikumar, learned Senior Standing Counsel for the appellant/Revenue and Ms.Vardhini Karthik, learned counsel for the respondent. 2. The appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act) is directed against the order dated 02.01.2015 made in I.T.A.No.1265/Mds/2013 on the file of the Income Tax Appellate Tribunal, Chennai, "C" Bench (for brevity, the Tribunal) for the Assessment Year 2005-2006. 3. The appeal was admitted on the following substantial questions of law:- “Whether on the facts and circumstances of the case, the Tribunal was right in allowing income from sale or scraps while considering the deduction u/s.108 of the Income Tax Act? Page 2/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.995 of 2015 2. Is not the finding of the Tribunal bad by holding that the scrap sale was not part of the Export turnover and allowing 100% deduction on the same while computing deduction u/s.108? 3. Whether the finding of the Tribunal is proper especially when the scrap is sold in the domestic market which is a byproduct and not has nothing to do with the export of the goods or merchandise?" 4. The learned Senior Standing Counsel appearing for the appellant submits that the above appeal is not pursued by the Revenue on account of the Low Tax Effect in terms of Circular No.17/2019 dated 08.08.2019 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. Page 3/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.995 of 2015 5. In the light of the said submissions, the above Tax Case Appeal is dismissed as withdrawn on account of the Low Tax Effect. The substantial questions of law framed is left open. In the event the tax effect in this case 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. [M.D., J.] [R.H., J.] Index : Yes/No 05.07.2021 Internet : Yes gv Page 4/5 https://www.mhc.tn.gov.in/judis/ T.C.A.No.995 of 2015 M. DURAISWAMY, J. and R.HEMALATHA,J gv To The Income Tax Appellate Tribunal, Chennai,"C" Bench Tax Case Appeal No.995 of 2015 05.07.2021

Page 5/5 https://www.mhc.tn.gov.in/judis/

More judgments on Section 10B

All 1,217 judgments and leading authorities on Section 10B →

Recent GST High Court judgments

Search GST case law →