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The High Court noted the submission by the Revenue's counsel that the main appeal had already been disposed of by the ITAT. Consequently, the appeal filed against the interim order in that main appeal was rendered redundant. Therefore, the Tax Case Appeal was dismissed as infructuous. The Court explicitly stated that the substantial questions of law raised in the appeal were left open and would be decided in an appropriate future appeal. No costs were awarded. The specific findings on the merits of the questions of law regarding the ITAT's power to grant stay under Section 254(2A) were not decided.
The High Court dismissed the appeal filed by the Revenue. The Court followed the ratio laid down in its previous judgments, specifically citing T.C.A.No.62 of 2015 ([2021] 127 taxmann.com 805 (Madras)) and [2020] 122 taxmann.com 212 (Madras) ([Commissioner of Income Tax, Chennai Vs. Sanmar Speciality Chemicals Ltd.]). These judgments, referencing CBDT Circular No. 14/2001 and the Gujarat High Court's decision in General Motors India (P.) Ltd. v. Dy. CIT, held that the restriction of 8 years for carry forward and set-off of unabsorbed depreciation was dispensed with from Assessment Year 2002-03 onwards. Consequently, any unabsorbed depreciation available as of April 1, 2002, would be governed by the amended Section 32(2) and could be carried forward and set off against profits of subsequent years without any time limit. The substantial question of law was answered against the Revenue and in favour of the assessee.
The High Court dismissed the appeal as withdrawn on account of low tax effect, as per the submissions made by the Revenue. The Court noted that the appeal was not being pursued due to the monetary limit stipulated in CBDT Circular No. 17/2019. The substantial question of law framed at the time of admission was 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 fixed in the said Circular, to be heard and decided on merits. No costs were awarded. The Tribunal's order was not adjudicated upon on its merits.
The High Court dismissed the appeal as withdrawn. The Revenue's counsel submitted that the appeal was not being pursued due to a low tax effect, as per CBDT Circular No. 17/2019, which raised the monetary threshold for appeals to the High Court to Rs. 1 crore. The tax effect in this particular case was stated to be below this limit. Consequently, the Court dismissed the appeal as withdrawn on account of the low tax effect. The substantial questions of law framed in the appeal were expressly left open. The Court also granted liberty to the Revenue to seek restoration of the appeal if the tax effect was found to be above the threshold limit fixed in the circular, for a decision on merits. No costs were awarded.
The High Court, following its own previous judgments, including the one in T.C.A.No.16 of 2014 and a Division Bench decision in T.C.A. No.732 & 733 of 2018, held that the income derived from letting out premises and other facilities in an industrial park/SEZ is to be charged to tax under the head 'Profits and Gains of Business'. The Court noted that the CBDT Circular No.16 of 2017, taking note of Karnataka High Court decisions, clarified this position. The reasoning also incorporated the principle that income from letting out property with all amenities and facilities is business income, not income from house property or other sources, as established in CIT Vs. Elnet Technologies Limited. The Court answered both substantial questions of law against the Revenue and in favour of the assessee. The appeals were dismissed.
The High Court, following its own prior judgment in T.C.A.No.16 of 2014, which in turn relied on a Division Bench decision in CIT Vs. Elnet Technologies Limited and CBDT Circular No.16 of 2017, held that income derived from letting out premises/developed space along with other facilities in an industrial park/SEZ is to be charged to tax under the head 'Profits and Gains of Business'. The Court found that the emphasis was on not only letting out the premises but also providing other facilities. The earlier Division Bench decision, which was appealed to the Supreme Court and dismissed on the ground of low tax effect, had held that income derived from letting out property with all amenities and facilities would be income from business. Therefore, the substantial questions of law were answered against the Revenue and in favour of the assessee. The appeals were dismissed.
The High Court did not decide the substantial questions of law on their merits. The learned Senior Standing Counsel for the appellant (Revenue) informed the Court that the Revenue was not pursuing the appeal due to low tax effect, as per CBDT Circular No. 17/2019, which raised the monetary threshold for filing appeals before the High Court to Rs. 1 crore. The tax effect in this case was below this limit. Consequently, the High Court dismissed the appeal as withdrawn on account of low tax effect. The Court explicitly stated that the substantial questions of law framed were left open. Liberty was granted to the Revenue 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.
The High Court did not decide the substantial questions of law. It was informed that the assessee had availed the benefit under the Direct Tax Vivad Se Vishwas Act, 2020, and had been issued Form-3. Consequently, the assessee sought to withdraw the appeal. The Court observed that keeping the appeal pending would serve no useful purpose. The appeal was dismissed as withdrawn. However, to safeguard the assessee's interest, liberty was granted to restore the appeal in the event the ultimate decision on the declaration filed under Section 4 of the Vivad Se Vishwas Act is not in favour of the assessee. If such a prayer is made, the Registry shall entertain it without requiring a condonation of delay application. The substantial questions of law were left open.
The High Court did not decide the substantial questions of law framed for consideration. Instead, the Court noted the enactment of the Direct Tax Vivad Se Vishwas Act, 2020, and was informed that the assessee had availed benefits under this Act, having been issued Form-3. Consequently, the assessee sought permission to withdraw the appeal. The Court observed that no useful purpose would be served by keeping the appeal pending. The appeal was dismissed as withdrawn, with liberty granted to the assessee to restore the appeal in the event the ultimate decision on their declaration filed under Section 4 of the Vivad Se Vishwas Act is not in their favour. The substantial questions of law were left open.
The High Court did not decide the substantial questions of law. It was informed that the assessee had availed the benefit under the Direct Tax Vivad Se Vishwas Act, 2020, having been issued Form-3. Consequently, the assessee sought permission to withdraw the appeal. The Court observed that no useful purpose would be served in keeping the appeal pending. The appeal was dismissed as withdrawn, with liberty granted to the assessee to restore the appeal in the event the decision under the Vivad Se Vishwas Act was not in their favour. The Court directed that if such a prayer for restoration is made, the Registry shall entertain it without insisting on a condonation of delay application. The substantial questions of law were left open. The operative direction was the dismissal of the appeal as withdrawn.
The High Court dismissed the appeal as withdrawn on account of the low tax effect, in line with CBDT Circular No.17/2019. The Court noted that the Revenue's submission was that the tax effect was below the revised monetary threshold for pursuing appeals before the High Court. Consequently, the substantial question of law framed by the Court was 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.
The High Court noted the submission by the Revenue's counsel that the appeal was not being pursued due to a low tax effect, as per CBDT Circular No. 17/2019. This circular increased the monetary threshold for filing or pursuing appeals before the High Court to Rs. 1 crore. The Revenue stated that the tax effect in this case was less than this limit. Consequently, the High Court dismissed the appeal as withdrawn on account of the low tax effect. The substantial question of law was left open. Liberty was granted to the Revenue 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.
The High Court dismissed the appeals as withdrawn on account of low tax effect, as submitted by the Revenue. The Revenue cited CBDT Circular No. 17/2019, which raised the monetary threshold for filing appeals before the High Court to Rs. 1 crore, and stated that the tax effect in these cases was below this limit. Consequently, the appeals were dismissed without a decision on the merits of the substantial questions of law framed. The Court explicitly stated that the substantial questions of law were left open. Liberty was granted to the Revenue to seek restoration of the appeals if the tax effect was found to be above the threshold limit. No costs were imposed.
The High Court noted that the Direct Tax Vivad Se Vishwas Act, 2020, had been enacted. The assessee's counsel informed the court that the assessee had availed the benefit under this Act and sought to withdraw the appeal. In light of this development, the Court found no useful purpose in keeping the appeal pending. The appeal was accordingly dismissed as withdrawn. The Court granted liberty to the assessee to restore the appeal if the ultimate decision under the Vivad Se Vishwas Act was not in their favour. The substantial questions of law were left undecided. The Department was directed to process the assessee's application under the Act at the earliest.
The High Court dismissed the appeals as withdrawn on account of low tax effect, as per CBDT Circular No. 17/2019. The Court noted the submission by the Revenue's counsel that the tax effect in these cases was below the enhanced monetary limit of Rs. 1 crore for filing appeals before the High Court. Consequently, the substantial questions of law framed by the Revenue were left open. The Court granted liberty to the Revenue to seek restoration of the appeals if the tax effect was found to be above the threshold limit fixed in the circular, allowing them to be heard and decided on merits. No costs were awarded. The specific findings of the ITAT on the penalty under Section 271B and the applicability of Section 40A(3) read with Rule 6DD(k) were not adjudicated upon by the High Court.
The High Court held that the substantial questions of law were decided against the Revenue and in favour of the assessee, following the ratio laid down in a previous judgment of the Division Bench of the same Court in T.C.A.No.732 & 733 of 2018 and T.C.A.No.16 of 2014. The Court noted that the CBDT Circular No.16 of 2017, taking note of Karnataka High Court decisions, established a settled position that income from letting out premises/developed space along with other facilities in an industrial park/SEZ is to be charged to tax under the head 'Profits and Gains of Business'. The Court also referred to its own Division Bench decision in CIT Vs. Elnet Technologies Limited, which held that income derived from letting out property with all amenities and facilities is income from business and cannot be assessed as income from house property or other sources. The appeal was accordingly dismissed.
The High Court, following its own previous judgment in T.C.A.No.16 of 2014 (which in turn relied on a Division Bench decision in CIT Vs. Elnet Technologies Limited and a CBDT Circular No.16 of 2017), held that income derived from letting out premises/developed space along with other facilities in an industrial park/SEZ is to be charged to tax under the head 'Profits and Gains of Business'. The Court found that the emphasis is on not only letting out the premises but also providing other facilities. The earlier decision of the Division Bench, which was appealed before the Supreme Court and dismissed on the ground of low tax effect, also supported this view. Consequently, the substantial questions of law were answered against the Revenue and in favour of the assessee. The appeals were dismissed.
The High Court recorded the submission made by the learned counsel appearing for the appellant (assessee) seeking permission to withdraw the Tax Case Appeal. Based on this submission, the Court dismissed the Tax Case Appeal as withdrawn. No costs were awarded. The specific findings or reasoning of the ITAT or the High Court on the merits of the case are not discussed as the appeal was disposed of on the procedural aspect of withdrawal. No issues were decided on merit, and therefore, no ratio decidendi can be extracted for future citation.
The High Court allowed the appeals, setting aside the order of the Income Tax Appellate Tribunal. The Court followed the ratio laid down in its own previous judgment in T.C.A.No.46 of 2021, which in turn relied on the Supreme Court's decision in Commissioner of Income Tax-III, Pune v. Rajasthan & Gujarati Charitable Foundation, Ponna (2018) 402 ITR 441. The Supreme Court had held that charitable institutions registered under Section 12A are entitled to claim depreciation on assets, even if the entire expenditure for acquiring those assets was treated as an application of income under Section 11(1)(a). The argument of double benefit was rejected, with the Bombay High Court's reasoning in Commissioner of Income Tax v. Institute of Banking Personnel Selection (IBPS) and Director of Income-tax (Exemption) v. Framjee Cawasjee Institute being affirmed. The Court also noted that the amendment to Section 11(6) is prospective, effective from Assessment Year 2015-2016, and that depreciation, once allowed, can be carried forward. Therefore, depreciation is allowable for the assessment years in question.
The High Court did not decide the substantial questions of law. It noted the enactment of the Direct Tax Vivad Se Vishwas Act, 2020, and was informed by the assessee's counsel that the assessee had availed the benefit under this Act, having been issued Form-3. Consequently, the assessee sought to withdraw the appeal. The Court found no useful purpose in keeping the appeal pending. The Tax Case Appeal was dismissed as withdrawn. The Court granted liberty to the assessee to restore the appeal if the ultimate decision under the Vivad Se Vishwas Act was not in their favour. In such an event, the Registry was directed to entertain a Miscellaneous Petition for Restoration without insisting on a delay condonation application. The substantial questions of law were left open.
The High Court did not decide the substantial questions of law. It was informed that the Direct Tax Vivad Se Vishwas Act, 2020, had been enacted. The assessee's counsel stated that Form-3 had been issued to the assessee under the Act and sought permission to withdraw the appeals. The Court noted that no useful purpose would be served by keeping the appeals pending, but safeguarded the assessee's interest in case the decision under the Vivad Se Vishwas Act was not in their favour. Consequently, the Tax Case Appeals were dismissed as withdrawn, with liberty granted to the assessee to restore the appeals if the ultimate decision on their declaration under Section 4 of the Act was not in their favour. The substantial questions of law were left open.
The High Court did not decide the substantial questions of law. It was informed that the assessee had availed the benefits under the Direct Tax Vivad Se Vishwas Act, 2020. Consequently, the Court dismissed the appeals as withdrawn. The Court granted liberty to the assessee to restore the appeals if the ultimate decision under the Vivad Se Vishwas Act was not in their favour. In such an event, the Registry was directed to entertain a Miscellaneous Petition for Restoration without insisting on a condonation of delay application. The substantial questions of law were left open. The Court observed that no useful purpose would be served by keeping the appeals pending given the assessee's participation in the Vivad Se Vishwas scheme.
The High Court held that the questions of law arising in these appeals were already decided against the Revenue and in favour of the assessee by the Hon'ble Supreme Court in Commissioner of Income-Tax, Central-III v. HCL Technologies Ltd. ([2018] 93 taxmann.com 33 (SC)) and by a Division Bench of the Madras High Court in Principal Commissioner of Income Tax, Corporate Circle-2(1), Chennai v. Envestor Ventures Ltd. ([2021] 123 taxmann.com 378 (Madras)). The Supreme Court in HCL Technologies Ltd. held that expenses excluded from export turnover must also be excluded from total turnover for computing deduction under Section 10A to avoid an illogical and unjust result. The Madras High Court in Envestor Ventures Ltd. held that disallowance under Rule 8D cannot exceed the exempted income and that the Assessing Authority must record satisfaction before resorting to Rule 8D computation. Consequently, the questions of law were decided against the Revenue and in favour of the assessee.
The High Court dismissed the appeals filed by the Revenue. The Court noted that the learned Senior Standing Counsel for the appellant fairly submitted that the questions of law involved had already been decided against the Revenue by a Division Bench of the same Court in TCA No. 228 of 2011 (M/s. Comstar Automotive Technologies Private Ltd. v. The Deputy Commissioner of Income Tax) dated March 18, 2020. This judgment, in turn, relied on the Apex Court's decision in Commissioner of Income-tax v. Yokogawa India Ltd., which held that deductions under Chapter IV of the Act are to be made while computing gross total income, not at the stage of computing total income under Chapter VI. The Court further observed that another Division Bench had also decided similar questions of law against the Revenue in TCA Nos. 1101 & 1102 of 2015 (The Commissioner of Income Tax, Chennai v. M/s. Caterpillar India Pvt. Limited, Chennai) dated April 1, 2021. Therefore, following these precedents, the questions of law were decided in favour of the assessee and against the Revenue, leading to the dismissal of the appeals.
The High Court dismissed the appeals as withdrawn. The learned Senior Standing Counsel for the appellant (Revenue) submitted that the appeals were not being pursued due to the Low Tax Effect, as per Circular No. 17/2019 issued by the Central Board of Direct Taxes, which increased the monetary limit for filing appeals before the High Court to Rs. 1 Crore. The tax effect in these cases was stated to be below this threshold. Consequently, the Court dismissed the Tax Case Appeals as withdrawn. The substantial questions of law framed were left open. Liberty was granted to the Revenue to seek restoration of the appeals if the tax effect was found to be above the threshold limit. No costs were imposed, and connected miscellaneous petitions were closed.
The High Court held that the question of law involved in the appeal was covered by its own previous judgment dated 19.01.2021 in T.C.A.No.451 of 2018. In that judgment, the Division Bench had relied on decisions of various High Courts, including the Karnataka High Court in CIT vs. Subhash Kabini Power Corporation Ltd. and the Andhra Pradesh High Court in CIT vs. My Home Power Ltd., which held that the sale of carbon credits results in a capital receipt and is not taxable. The Court noted that the Andhra Pradesh High Court had confirmed the Tribunal's view that carbon credit is not an offshoot of business but of environmental concerns, and no asset is generated in the course of business. Therefore, the High Court concluded that the question of law was decided against the Revenue and in favour of the assessee. The Tax Case Appeal was dismissed.
The High Court dismissed the appeals as withdrawn on account of low tax effect, as per the submissions made by the Revenue. The Court noted that the tax effect in these cases was below the threshold limit stipulated in CBDT Circular No.17/2019. Consequently, the substantial questions of law framed for the appeals were left undecided. The Court granted liberty to the Revenue to seek restoration of the appeals if the tax effect was found to be above the threshold limit, allowing them to be heard and decided on merits. No costs were awarded.
The High Court noted that it was not necessary to decide the substantial questions of law due to subsequent developments. The enactment of the Direct Tax Vivad Se Vishwas Act, 2020, provided a mechanism for resolving disputed tax. The Court was informed that the assessee had availed this scheme, with the Department issuing Form-3 and the assessee filing Form-4. In light of the assessee having availed the benefit under the Act, the Court found no useful purpose in keeping the appeal pending. The Tax Case Appeal was disposed of on the ground that the assessee had availed the Vivad Se Vishwas Scheme. The Court granted liberty to the assessee to restore the appeal in the event the ultimate decision on the declaration filed under Section 4 of the Vivad Se Vishwas Act was not in its favour. The substantial questions of law were left open. The Department was directed to process the application at the earliest.
The High Court decided all three substantial questions of law against the Revenue and in favour of the assessee. For questions 1 and 2, the Court followed the ratio laid down by the Hon'ble Supreme Court of India in Commissioner of Income Tax v. HCL Technologies Ltd. (2018) 404 ITR 0719 (SC). This judgment held that expenses like freight, telecommunication, and insurance attributable to the delivery of computer software outside India, and expenses incurred in foreign exchange for providing technical services outside, should be excluded from both export turnover and total turnover when computing deduction under Section 10A. The Court reasoned that excluding these from export turnover but not from total turnover would make the formula unworkable and absurd. For question 3, the Court followed the ratio laid down by a Division Bench of the High Court in T.C.A.No.375 of 2018 dated 02.09.2020, which decided the issue of set off of brought forward losses against the Revenue. Consequently, the Tax Case Appeal was dismissed.
The High Court dismissed the appeals as withdrawn. The Revenue's learned Senior Standing Counsel submitted that the appeals were not being pursued due to low tax effect, citing CBDT Circular No. 17/2019, which increased the monetary limit for appeals to the High Court to Rs. 1 crore. The Court noted that the tax effect in these cases was below this threshold. Consequently, the appeals were dismissed as withdrawn on account of low tax effect. The substantial questions of law framed were expressly left open. The Revenue was granted liberty to seek restoration of the appeals if the tax effect was found to be above the threshold limit. No costs were awarded.
The High Court did not decide the substantial questions of law on merits. The Revenue submitted that it was not pursuing the appeal due to the Low Tax Effect, as per CBDT Circular No.17/2019, which increased the monetary limit for appeals to the High Court to Rs.1 crore. The tax effect in this case was stated to be below this threshold. Consequently, the High Court dismissed the appeal as withdrawn on account of the low tax effect. The substantial questions of law were left open. Liberty was granted to the Revenue to seek restoration of the appeal if the tax effect was found to be above the threshold limit.
The High Court held that both substantial questions of law were covered by a previous Division Bench judgment of the same court in T.C.A.No.873 of 2013, dated 02.03.2021, and a judgment of the Delhi High Court in AMD Metplast Pvt Ltd v. Deputy Commissioner of Income Tax (2012) 20 Taxmann.com 647. Following these precedents, the court decided both questions of law against the Revenue and in favour of the assessee. The reasoning was that the commission was paid for services rendered as per the terms of appointment, was treated as part of salary, and TDS was deducted. The Managing Director was liable to pay tax on both salary and commission. Dividend payment is distinct from salary or commission. The CIT(A) had also noted that the Managing Director offered the entire commission for taxation and paid tax at the maximum marginal rate, indicating no tax avoidance motive. Therefore, the appeal was dismissed.
The High Court held that the unabsorbed depreciation pertaining to AY 1997-98 and 1998-99 is eligible for carry forward and set off against the income of AY 2007-08. The Court followed the ratio laid down in its own previous judgments, specifically citing [2021] 127 taxmann.com 805 (Madras) in Harvey Heart Hospitals Ltd. Vs. Assistant Commissioner of Income Tax and [2020] 122 taxmann.com 212 (Madras) in Commissioner of Income Tax, Chennai Vs. Sanmar Speciality Chemicals Ltd. These decisions, along with the Supreme Court's ruling in CIT v. Bajaj Hindustan Ltd. [2019] 103 taxmann.com 32, affirmed that unabsorbed depreciation, particularly after the amendment by the Finance Act, 2001, which removed the eight-year limit, can be carried forward and adjusted against future profits without any time restriction. The Court found no error in the ITAT's order and dismissed the Revenue's appeal. The substantial question of law was answered against the Revenue.
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.
The High Court dismissed the Tax Case Appeal filed by the Revenue as withdrawn. 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 appeals to the High Court to Rs.1 Crore. The Court noted that the tax effect in this case was below this threshold. Consequently, the appeal was disposed of without a decision on the merits of the substantial question of law. The substantial question of law framed by the Court was expressly 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.
The High Court dismissed the appeal filed by the Revenue as withdrawn. The dismissal was based on the Revenue's submission that the appeal was not being pursued due to the low tax effect, citing CBDT Circular No. 17/2019. The Court noted that the monetary limit for filing or pursuing an appeal before the High Court had been increased to Rs. 1 Crore by this circular, and the tax effect in the present case was below this limit. Consequently, the appeal was dismissed as withdrawn. The substantial question of law framed for the appeal was expressly left open. Liberty was granted to the Revenue 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.
The High Court dismissed the appeal filed by the Revenue. The Court noted that the substantial question of law raised in the appeal had already been decided by a Division Bench of the same High Court in a common judgment in T.C.A.Nos.343 to 345 & 347 of 2014 (Commissioner of Income Tax, Trichy Vs. M/s.National College Council). In that judgment, the Division Bench had followed the decision of the Hon'ble Supreme Court in CIT Vs. Rajasthan and Gujarati Charitable Foundation reported in [2018] 402 ITR 441 (SC). The Supreme Court's decision, as cited by the Revenue's counsel, had answered the substantial question of law against the Revenue. Consequently, the Division Bench had dismissed the appeals against the Revenue. Therefore, following the precedent set by the Supreme Court and the Division Bench of the High Court, the present appeal was also dismissed, answering the question of law against the Revenue.
The High Court did not decide the substantial questions of law. It noted the enactment of the Direct Tax Vivad Se Vishwas Act, 2020, and was informed by the assessee's counsel that Form-3 had been issued under this Act. Consequently, the assessee sought permission to withdraw the appeal. The Court granted this request, dismissing the appeal as withdrawn. No specific finding was made on the substantial questions of law, and the issue of whether the ITAT order was correct was not adjudicated upon. The operative direction was to dismiss the appeal as withdrawn.
The High Court did not decide the substantial questions of law framed for consideration. This was due to subsequent developments, specifically the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The court was informed that the assessee had been issued Form-3 under this Act, and the assessee's counsel sought permission to withdraw the appeal. Consequently, the High Court dismissed the Tax Case Appeal as withdrawn. No specific finding was given on the merits of the substantial questions of law, and therefore, no ratio decidendi on those points can be extracted. The operative direction was the dismissal of the appeal as withdrawn.
The High Court, following the ratio laid down by the Hon'ble Supreme Court of India in its judgment dated 14.01.2020 in Civil Appeal Nos. 7615 of 2009 and 2414 of 2010 (Commissioner of Income Tax v. Gujarat Guardian Limited, Erode), decided the questions of law against the Revenue and in favour of the assessee. The Supreme Court in that case had held that prepayment premium paid to a bank in lieu of agreeing to reduce the rate of interest on a loan represents upfront payment of the differential rate of interest and is revenue expenditure, deductible in the year of accrual, as the Income Tax Act does not recognize deferred revenue expenditure. The ITAT's view in the cited case, which was affirmed by the High Court, was that such prepayment charges are interest paid on moneys borrowed for business purposes and are deductible as revenue expenditure. The High Court found no reason to take a different view. Consequently, the Tax Case Appeal filed by the Revenue was dismissed.
The High Court noted that it was not necessary to decide the substantial questions of law due to subsequent developments. The enactment of the Direct Tax Vivad Se Vishwas Act, 2020, provided a mechanism for the resolution of disputed tax. The assessee's counsel informed the Court that Form-3 had been issued to the assessee under this Act and sought permission to withdraw the appeal. Consequently, the High Court dismissed the Tax Case Appeal as withdrawn. No specific finding was given on the substantial questions of law as the appeal was disposed of on procedural grounds. The operative direction was the dismissal of the appeal as withdrawn.
The High Court did not decide the substantial questions of law on merits. The Revenue sought to withdraw the appeal, citing the low tax effect in the case, as per CBDT Circular No. 17/2019 which increased the monetary limit for appeals to the High Court to Rs. 1 crore. The Court noted that the tax effect in this particular case was below the threshold limit. Consequently, the appeal was dismissed as withdrawn. The substantial questions of law were expressly left open. Liberty was granted to the Revenue 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.
The High Court did not decide the substantial questions of law framed for consideration. This was due to the enactment of the Direct Tax Vivad Se Vishwas Act, 2020. The learned counsel for the appellant/assessee informed the Court that the assessee had been issued with Form-3 under the said Act and 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 addition of Rs. 12,00,000/-, the evidentiary value of the sale agreement and bank statement, the affidavit of Mr. Mahadevan, and the principles of natural justice were not adjudicated upon by the High Court.
The High Court held that questions 1 and 2 were decided against the Revenue by the Supreme Court in Commissioner of Income Tax v. HCL Technologies Ltd. (2018) 404 ITR 0719 (SC). The Supreme Court held that 'total turnover' is not defined in Section 10A, but any exclusion from 'export turnover' must also be excluded from 'total turnover' as export turnover is a component of total turnover. This interpretation aligns with the legislative intent to avoid illogical results. The High Court also held that question 3 was decided against the Revenue by a Division Bench of the same High Court in T.C.A.No.375 of 2018 [Commissioner of Income Tax, Chennai v. M/s.Allsec Technologies Ltd., Chennai] dated 02.09.2020, which followed earlier decisions of the court in favour of the assessee regarding the set off of brought forward losses. Consequently, all three questions of law were decided against the Revenue and in favour of the assessee. The appeal was dismissed.
The High Court dismissed the appeal as withdrawn. The Revenue's counsel submitted that the appeal was not being pursued due to low tax effect, citing CBDT Circular No. 17/2019 which increased the monetary limit for appeals to the High Court to Rs. 1 crore. As the tax effect in this case was below this threshold, the appeal was withdrawn. The Court explicitly stated that the substantial questions of law framed were left open. Liberty was granted to the Revenue to seek restoration of the appeal if the tax effect was found to be above the threshold limit. No decision was made on the merits of the substantial questions of law.
The High Court dismissed the appeals as withdrawn on account of low tax effect, in line with CBDT Circular No.17/2019. The Court noted the Revenue's submission that the tax effect in these cases was below the enhanced 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 Court granted liberty to the Revenue to seek restoration of the appeals if the tax effect was found to be above the threshold limit, for a decision on merits. No costs were awarded. The specific findings or reasoning of the ITAT on the nature of royalty payments as revenue or capital expenditure were not adjudicated upon by the High Court.
The High Court noted the submission by the Revenue's counsel that the main appeal before the ITAT (I.T.A.No.2353/Mds/2012) had been disposed of by an order dated April 22, 2016. Given this development, the High Court found that the present appeal, which was filed against an interim order in the said main appeal, had become redundant. Therefore, the Tax Case Appeal was dismissed as infructuous. The Court explicitly stated that the substantial questions of law raised in the appeal were left open to be decided in an appropriate future appeal. No costs were awarded.
The High Court dismissed the appeal as withdrawn on account of low tax effect, citing CBDT Circular No. 17/2019. The Court noted that the Revenue's submission was based on the increased monetary limit for appeals to the High Court, which was Rs. 1 crore, and that the tax effect in this case was below that threshold. Consequently, the appeal was not pursued on merits. The substantial questions of law framed were expressly left undecided. The Court granted liberty to the Revenue to seek restoration of the appeal if the tax effect was found to be above the fixed threshold. No costs were awarded.
The High Court noted that it was not necessary to decide the substantial question of law framed for consideration due to subsequent developments. The Government of India enacted the Direct Tax Vivad Se Vishwas Act, 2020, to provide for the resolution of disputed tax. The learned counsel for the respondent/assessee submitted that the assessee had availed this scheme and had been issued Form-3 on 08.03.2021. Recording this submission, the High Court held that nothing further survived for adjudication in the appeal. Consequently, the Tax Case Appeal was disposed of. The specific finding of the ITAT regarding the invalidity of the reassessment and the reasoning behind it were not discussed or adjudicated by the High Court.
The High Court, following its own Division Bench judgment in Evolv Clothing Co. (P) Ltd. vs. Assistant Commissioner of Income-tax, held that TDS is only attracted on "sums chargeable under the provisions of the Act" as per Section 195(1). If there is no liability to tax in India, the question of tax deduction does not arise. The Court referred to the Supreme Court's decision in GE India Technology Centre (P.) Ltd. vs. CIT, which clarified that the obligation to deduct TDS under Section 195 does not arise merely because there is a remittance, if the amount paid is not chargeable to tax in India. The High Court further noted that where there is no liability in India, there can be no disallowance under Section 40(a)(i). The judgment distinguished "fees for technical services" from "commission" which is order-specific and computable as a small percentage of the order value, stating that Section 40(a)(i) does not contemplate such commission. Therefore, the question of law was decided against the Revenue and in favour of the assessee.