The Court dismissed two Tax Case Appeals against the ITAT order for Assessment Year 2010-11, conceding that the tax effect of the challenged orders was less than the threshold limit specified in Circular No.17/2019.
Tax Case Appeals dismissed on account of low tax effect; substantial questions of law left open.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 10.11.2020
CORAM
THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN
T.C.A.Nos.472 & 473 of 2018 & C.M.P.No.10178 of 2018
The Principal Commissioner of Income Tax
Central 1 No.108, Mahatma Gandhi Road, Chennai. ..Appellant in both T.C.As Versus
M/s.BGR Energy Systems Ltd, No.443, Anna Salai, Teynampat, Chennai – 600 018 PAN:AAB CG 2202 J ..Respondent in both T.C.As
Common Prayer:- Tax Case Appeals filed under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras 'B' Bench, Chennai made in I.T.A.No.660/Mds/2017 and I.T.A.No.954/Mds/2017 dated 07.12.2017 relating to the Assessment Year 2010-11. Against the order of the Commissioner of Income tax (Appeals)-19, Chennai – 34, Dated 18/01/2017 in ITA no. 40/16-17 for the assessment year 2010-2011 and against the order of Additional Commissioner of Income Tax, Nellore Range, Nellore, Dated 31/03/2013 in PAN/GIR no.AABCG2202J for the assessment year 2010-2011.
COMMON JUDGMENT [Order of the Court was made by T.S.SIVAGNANAM, J.]
We have heard Mr.T.R.Senthil Kumar, learned Senior Standing Counsel, assisted by M/s.K.G.Usha Rani, learned Standing Counsel appearing for the appellant / Revenue and Mr.Venkatanarayanan
for M/s.Subbaraya Aiyar Padmanaban, learned counsel for the respondent / assessee.
“T.C.A.No.472 of 2018
1.Whether the Appellate Tribunal is justified in holding that the disallowance as per the provisions of Section 14A read with Rule 8D of Income Tax Rules, 1962 is to be restricted to the extent of exempted income earned by the assessee during the year?
2.Whether the Appellate Tribunal is correct in not appreciating the legal principle that disallowability of expenditure 14A read with Rule 8D of Income Tax Rules, 1962, as clarified by the Board's Circular No.5/2014 dated 10.02.2014, is neither conditional upon the earning of exempted income nor linked to the quantum of exempted income earned by the assessee?”
T.C.A.No.473 of 2018
1.Whether the Appellate Tribunal is justified in confirming the order of the CIT (A) deleting the addition of Rs.2,06,28,478/- made towards disallowance of depreciation on technical knowhow fee paid?
2.Whether the Appellate Tribunal is justified in holding that the assessee is eligible for depreciation on value of the amount claimed to have paid towards technical know-how, by not appreciating the fact that the assessee has not acquired any capital asset in the nature of technical know-how, either fully or partly and thereby the conditions mentioned in the Section 32 (1)(ii) were not fulfilled?”
Sd/-
Assistant Registrar
//True Copy//
Sub Assistant Registrar
Kak
To
1. The Income Tax Appellate Tribunal,
'B' Bench, Chennai.
2. The Commissioner of Income Tax (Appeals)-19.
Chennai 34.
3. The Additional Commissioner of Income Tax,
Nellore Range, Nellore.
+1 cc to Mr. T.R. Senthil Kumar,Advocate Sr.No.36522.
+1 cc to M/S Subbaraya Aiyar Padmanabhan,Advocate Sr.No.36525.
T.C.A.Nos.472 & 473 of 2018 SSD(CO) NS(28/12/2020) KKV/22/02/2021
2 issues framed by the court
Whether the substantive questions of law regarding Section 14A and depreciation disallowance should be disposed of due to low tax effect?
Can Tax Case Appeals be dismissed solely on the ground of low tax effect under Circular No.17/2019?
4 provisions across 2 enactments
The Principal Commissioner of Income Tax
M/s.BGR Energy Systems Ltd
T.S.SIVAGNANAM
V.BHAVANI SUBBAROYAN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
