The Commissioner of Income-tax, Chennai v. Indbank Merchant Banking Services Ltd
[Citation -2019-LL-0819-121]

Citation 2019-LL-0819-121
Appellant Name The Commissioner of Income-tax, Chennai
Respondent Name Indbank Merchant Banking Services Ltd.
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 19/08/2019
Assessment Year 2003-04
Judgment View Judgment
Keyword Tags mercantile system of accounting • interest accrued • low tax effect • monetary limit • hybrid system • receipt basis • non-performing asset
Bot Summary: Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 22.9.2008 made in ITA.No. 60/Mds/2007 on the file of the Income Tax Appellate Tribunal, Chennai 'A' Bench for the assessment year 2003-04. Whether, on the facts and circumstances of the case, the assessee is entitled to follow a hybrid system of accounting by showing the interest on non performing assets only on receipt basis, while otherwise following a mercantile system of accounting contrary to the provisions of Section 145 of the Income Tax Act iii. Whether the prudential norms issued by the Reserve Bank of India will have any bearing on computation for the purpose of income tax and whether it will have an overriding effect over the provisions of the Income Tax Act and iv. The learned Senior Standing Counsel for the appellant submits that the above appeal is not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.8.2019 issued by the Central Board of Direct Taxes. In the light of the said submissions, the above tax case appeal is dismissed on account of the low tax effect. In the event the tax effect 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 appeal to be heard and decided on merits.


TCA.No.956 of 2009 In High Court of Judicature at Madras Dated : 19.8.2019 Coram : Honourable Mr.Justice T.S.SIVAGNANAM and Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.956 of 2009 Commissioner of Income Tax, Chennai ...Appellant Vs M/s.Indbank Merchant Banking Services Ltd., Chennai-1. ...Respondent APPEAL under Section 260A of Income Tax Act, 1961 against order dated 22.9.2008 made in ITA.No.60/Mds/2007 on file of Income Tax Appellate Tribunal, Chennai 'A' Bench for assessment year 2003-04. For Appellant: Mr.Karthik Ranganathan, SSC For Respondent: Ms.Sree Lakshmi Valli Judgment was delivered by T.S.Sivagnanam,J We have heard Mr.Karthik Ranganathan, learned Senior Standing Counsel appearing for appellant Revenue and Ms.Sree Lakshmi Valli, learned counsel for respondent assessee. 1/4 http://www.judis.nic.in TCA.No.956 of 2009 2. This appeal, filed by Revenue under Section 260A of Income Tax Act, 1961 is directed against order dated 22.9.2008 made in ITA.No. 60/Mds/2007 on file of Income Tax Appellate Tribunal, Chennai 'A' Bench for assessment year 2003-04. 3. appeal was admitted on 17.9.2009 on following substantial questions of law : i. Whether, on facts and circumstances of case, Tribunal was right in deleting addition of Rs.3,51,917/-, being interest accrued on non performing assets, even though assessee is following mercantile system of accounting ? ii. Whether, on facts and circumstances of case, assessee is entitled to follow hybrid system of accounting by showing interest on non performing assets only on receipt basis, while otherwise following mercantile system of accounting contrary to provisions of Section 145 of Income Tax Act? iii. Whether prudential norms issued by Reserve Bank of India will have any bearing on computation for purpose of income tax and whether it will have overriding effect over provisions of Income Tax Act ? and iv. Whether, on facts and circumstances of case, Tribunal was right in holding that 2/4 http://www.judis.nic.in TCA.No.956 of 2009 Section 234D is not applicable even in respect of assessment year 2003-04 ? 4. learned Senior Standing Counsel for appellant submits that above appeal is not pursued by Revenue on account of low tax effect in terms of Circular No.17/2019 dated 08.8.2019 issued by Central Board of Direct Taxes. By said Circular, monetary limit for filing or pursuing appeal before High Court has been increased to Rs.1 Crore. It is further submitted that tax effect in this case is less than threshold limit. 5. In light of said submissions, above tax case appeal is dismissed on account of low tax effect. substantial questions of law framed are left open. In event tax effect is above threshold limit fixed in said circular, liberty is granted to Revenue to make mention to this Court to restore appeal to be heard and decided on merits. No costs. 19.8.2019 Internet: Yes To Income Tax Appellate Tribunal, Chennai 'A' Bench. RS 3/4 http://www.judis.nic.in TCA.No.956 of 2009 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS TCA.No.956 of 2009 19.8.2019 4/4 http://www.judis.nic.in Commissioner of Income-tax, Chennai v. Indbank Merchant Banking Services Ltd
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