Madras High Court
Principal Commissioner Of Income Tax vs M/S.Express Newspaper Pvt. Ltd on 15 July, 2021
Author: M.Duraiswamy
Bench: M.Duraiswamy, R. Hemalatha
T.C.A.Nos.360 and 361 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 15.07.2021
CORAM
THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE R. HEMALATHA
T.C.A.Nos.360 and 361 of 2021
Principal Commissioner of Income Tax,
Corporate Circle – 2(2),
Room No.512, 5th Floor,
Wanarpathy Block,
No.121, Mahatma Gandhi Road,
Chennai – 600 034. ... Appellant
in all appeals
Vs.
M/s.Express Newspaper Pvt. Ltd.,
Express Estates,
No.2, Club House Road,
Mount Road,
Chennai – 600 002. ... Respondent
in all appeals
Tax Case Appeals in T.C.A.Nos.360 and 361 of 2021 preferred
under Section 260A of the Income Tax Act, 1961, against the order of
the Income Tax Appellate Tribunal, Madras, “C” Bench, dated
05.01.2018 in I.T.A.Nos.687/Mds/2017 and 688/Mds/2017, respectively
for the Assessment Years 2010-11 and 2012-13 respectively.
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T.C.A.Nos.360 and 361 of 2021
For Appellant : Mr.Karthik Ranganathan
Senior Standing Counsel
in all appeals
For Respondent : Ms.Sri Niranjani Srinivasan
for M/s.G.Baskar
in all appeals
COMMON JUDGMENT
(Judgment was delivered by M.DURAISWAMY, J.) We have heard Mr.Karthik Ranganathan, learned Senior Standing Counsel for the appellant/Revenue and Ms.Sri Niranjani Srinivasan, learned counsel for the respondent/assessee.
2.The above appeals, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act), are directed against the order dated 05.01.2018 made in I.T.A.Nos.687/Mds/2017 and 688/Mds/2017, on the file of the Income Tax Appellate Tribunal, Madras, “C” Bench (for brevity, the Tribunal) for the Assessment Years 2010-11 and 2012-13 respectively.
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3.The appellant/Revenue has raised the following substantial questions of law in the above appeals :
“1.Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct in directing to ensure whether the assessee had made investments in its sister/associate company for strategic purpose and out of its interest free funds for the purpose of computing disallowance u/s 14A r.w.r8D of the Act?
2.Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct and justified in holding that the investment made in subsidiary companies is not liable for disallowances u/s 14A when the provisions of the said section as well as Rule 8D does not provide for any such exception?
3.Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct in holding that when the assessee made investment in the subsidiary companies, the intention of the assessee is not for earning exempt income but because of commercial expediency?Page 3/7
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4.Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct in not appreciating the fact that investment in shares of subsidiary companies will also yield only dividend income which is exempt from income tax and hence provisions of sec. 14A are applicable?
5.Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT erred in deleting the disallowance made u/r.8D r.w.s 14A when assessee had mixed bag of funds and huge investments was made in assets yielding exempt income?
6.Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct in not appreciating the CBDT circular No. 5/2014 wherein it is clarified that, disallowance u/s. 14A r.w.r.8D has to be made even if the taxpayer in a particular year not earned any exempt income?”
4.The learned Senior Standing Counsel for the appellant submits that the above appeals are not pursued by the Revenue on account of the Low Tax Effect in terms of Circular No.17/2019 dated 08.08.2019 issued Page 4/7 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.360 and 361 of 2021 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 these cases is less than the threshold limit.
5.In the light of the said submissions, the above Tax Case Appeals are dismissed as withdrawn on account of the Low Tax Effect. The substantial questions of law framed are left open. In the event the tax effect in these cases 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 above appeals to be heard and decided on merits. No costs.
[M.D., J.] [R.H., J.]
15.07.2021
(2/2)
Index : Yes/No
Internet : Yes
mkn
To
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1.The Income Tax Appellate Tribunal, Madras, “C” Bench.
2.The Principal Commissioner of Income Tax, Corporate Circle – 2(2), Room No.512, 5th Floor, Wanarpathy Block, No.121, Mahatma Gandhi Road, Chennai – 600 034.
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and R. HEMALATHA, J.
mkn T.C.A.Nos.360 and 361 of 2021 15.07.2021 (2/2) Page 7/7 https://www.mhc.tn.gov.in/judis/