COMMSSR.OF INCOME TAX-II,HYD vs. INFOTECH ENTERPRISES LTD.HYD

[ 32e5 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD WEDNESDAY, THE FOURTEENTH DAY OF SEPTEIVBER TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE GHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE C.V. BHASKAR REDDY lncome Tax Tribunal Appeal under Section 260(4) of the lncome Tax Act, '1961 against the order of the lncome Tax Appellate Tribunal, Hyderabad Bench 'B' Hyderabad in ITA No.610/Hydl2OOO, for assessment year 1997-98 dated 3110512002 preferred against the Order of the Commissioner of lncome Tax (Appeals)-lV, Hyderabad, Appeal No,94/DC-7(4)lClr (A) lV/200-01 dated 04/08/2000 preferred against the Order of the Deputy Commissioner of lncome Tax Ctcle -7(4), Hyderabad PAN/GlR No.1-71lDCIT 7(4) Hyderabad dated 30/03/2000. Between: Commissioner of lncome Tax-ll, Hyderabad AND ...APPELLANT/ RESPONDENT lvl/s. lnfotech Enterprises Ltd., PIot No.42, Nagarjuna Hills, Punjagutta, Hyderabad . ..,RESPONDENT/ APPELLANT For the Appellant : SRI B.NARASIMHA SARMA, REP. FOR MS. K.MAMATA CHOWDARY, Sr. SC for l.T.Department For the Respondent : SRI CHALLA GUNARANJAN, Advocate The Court delivered the following: JUDGN/ENT l.T.T.A. NO: 90 OF 2003

HON 'BLE THE CHIEF. JUSTICE UJJAL BHIIYAN AND THE HON'BLE SRI JUSTICE C.V.BHASXAR REDDY I.T.T.A. No.90 of 2OO3 JUDGMENT: (Per the Haft'bte the Chief Justice Ujjal BL gan) Heard Mr. B.Narsimha Sarma, learned counsel representing Ms. K.Mamata Chowdary, learned Senior Standing Counsel for Income Tax Department appearing for the appellant and Mr. Chal1a Gunaranjan, learned counsel for the resPondent. 2. This appeal under Section 260A of the Income Tax Act' 1961, has been filed' against the order dated 31'05'2002 passed by the Income Tax Appellate Tribunal, Hyderabad Bench ts', Hyderabad (Tribunal) in I'T'A'No'6lOlHydl2OOO for the assessment Year 7997 -98 ' 3 In the appeal, the following substantial questions of law have been proPosed: "A) Whether the Appellate Tribunal is justified in holding that 'net interest' and not 'gross interest' should be deducted from 'business profit''for the purpose of computation of relief U/s. 80HHE of the I T'Act ? B) Whether the Appellate Tribunal is justifier! in holding that net interest alone should form the basis for / I

2 computation of 'business profit' without there being a finding about the nexus of interest receipts and interest payments ? 4. On 14.O7.2003, the appeal was admitted. 5. In the hearing today, we have perused the assessment order dated 30.03.2000. We find therefrom that the taxable income of the respondent was determined at Rs.89,63,930.00 and quantum of tax to be paid was assessed at Rs.22,55,320.00. 6. Central Board of Direct Taxes (CBDT) has issued Circular No.17 of 2019, dated 08.08.2019, amending the previous Circular No.3 of 2018, dated ll.O7.2Ol8, by further enhancing the monetary limits for fiiing appeals by the Income Tax Department before the Income Tax Appellate Tribunals, High Courts and Supreme Court as a measure for reducing litigation. In paragraph 2 of the said circular we find that the monetary limit fixed for Iiling an appeal before the High Court is Rs. 1.00 crore. 7 . In the instant appeal, tax effect is of \ Rs.22,55,320.00, which is well below the monetary limit. \

-) To Kj I 3 4 6 7 8. Therefore, the appeal filed by the Department 1S dismissed in terms of the aforesaid Circular No. 17 of 2019, dated 08.08.2019. However, if the appeal comes within the exception under paragraph 10 of Circular No.3 of 2018, it would be open to the Income Tax Department to seek revival of the appeal. Miscellaneous applications pending, if any, shall stand closed. However, there shall be no order as to costs. Sd/-K,SRINIVASA o JOINT REGI RAR //TRUE COPY' SECTION OFFICER The lncome Tax Appellate Tribunal, Hyderabad Bench 'B' Hyderabad The Commissioner of lncome Tax (Appeals)-lV, Hyderabad. The Deputy Commissioner of lncome Tax, Circle-7(4),-Hyderabad. One CC to'Ms. K.Mamata Chowdary, Advocate IOPUC] One CC to Sri Challa Gunaranjan, Advocate [OPUC] Two CD Copies One Spare Copy u s" - I I I 1

HIGH COURT DATED:1410912022 JUDGMENT ITTA.No.90 of 2003 //. v' 2s $ti ? 6i "u2 - a.., v DISMISSING THE ITTA WITHOUT COSTS.