Madras High Court
The Deputy Commissioner Of Income Tax vs M/S.Hansa Vision India P. Ltd on 26 August, 2022
Author: R.Mahadevan
Bench: R. Mahadevan, Mohammed Shaffiq
T.C.A.No.699 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 26.08.2022
CORAM :
THE HON'BLE MR. JUSTICE R. MAHADEVAN
AND
THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ
T.C.A.No.699 of 2019
The Deputy Commissioner of Income Tax,
Corporate Circle-2(2),
R.No.512, 5th Floor, Wanarpaty Block,
Nungambakkam,
Chennai - 600 034. ... Appellant
Versus
M/s.Hansa Vision India P. Ltd.,
No.605 & 606, 2nd Floor,
Film Chamber Building,
Thousand Lights, Anna Salai,
Chennai - 600 034. ... Respondent
(PAN No.AABCT3770E)
Appeal preferred under Section 260A of the Income Tax Act, 1961,
against the order of the Income Tax Appellate Tribunal, Madras “C” Bench,
dated 16.01.2017 in I.TA.No.2970/Mds/2016.
For Appellant : M/s.Karthik Ranganathan &
Mr.Rajesh
Standing Counsel
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T.C.A.No.699 of 2019
JUDGMENT
(Judgment was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 16.01.2017 passed by the Income Tax Appellate Tribunal, Madras 'C' Bench in I.T.A.No.2970/Mds/2016, relating to the assessment year 2012-13, by raising the following substantial questions of law:-
"(i) Whether the Tribunal was correct in directing to ensure whether the assessee has made investments in its sister/associate company for strategic purpose of computing disallowance under Section 14A read with Rule 8D of the Act?
(ii) Whether the Tribunal was correct and justified in holding that investments made by the assessee in subsidiary Company is not liable for disallowance under Section 14A when the provisions of the said Section as well as Rule 8A does not provide for any such exception?
(iii) Whether the Tribunal was correct and justified in holding that when the assessee made investment in the subsidiary companies, the intention of the assesee is not for earning exempt income but because of commercial expediency?
(iv) Whether the Tribunal 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 Section 14A are applicable?
(v) Whether the Tribunal has erred in holding that the Page 2/5 https://www.mhc.tn.gov.in/judis T.C.A.No.699 of 2019 investment made in the subsidiary companies is not liable for disallowance under Section 14 A read with Rule 8 D of the IT Rules when the dividend earned from such companies are also exempt under the provisions of the IT Act?
(vi) Whether the Tribunal has erred in deleting the disallowance made under Rule 8D r/w Section 14A when the assessee had mixed bag of funds and huge investments was made in the assets yielding exempt income?
(vii) Whether the Tribunal was correct and justified in holding that the assessee's belated remittance of PF & ESI as per the relevant Act, but before the due date of filing of the IT returns in accordance with IT Act which is in contravention of provisions of Section 36(1)(va) of the IT Act?
(viii) Whether the Tribunal was correct in applying the decision of the High Court, Madras in the case of Industrial Security & Intelligence India Private Limited without considering the circular No.22/2015, dated 17.12.2015 which clearly states that only the remittance of employer's contribution to PF/ESI by the assessee as an employer on or before the due date of filing the return of income under Section 139(1) of the Act be allowable as per provisions under Section 43B of the Act. Further, it clarified that it is not applicable to cases which are governed by Section 36(1)(va) of the Act?"
2. When the matter was taken up for consideration, the learned counsel Page 3/5 https://www.mhc.tn.gov.in/judis T.C.A.No.699 of 2019 for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeal shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in this appeal is less than the threshold limit.
3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs.
(R.M.D., J.) (M.S.Q., J.)
26.08.2022
rns
Internet : Yes.
Index : Yes / No.
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T.C.A.No.699 of 2019
R. MAHADEVAN, J.
and
MOHAMMED SHAFFIQ, J.
rns
To
1. The Income Tax Appellate Tribunal
Madras 'C' Bench, Chennai.
2. The Commissioner of Income Tax (Appeals)-6, Chennai.
3. The Deputy Commissioner of Income Tax, Company Circle-2(2), Chennai-34.
T.C.A.No.699 of 2019
26.08.2022 Page 5/5 https://www.mhc.tn.gov.in/judis