Commissioner of Income-tax-I, Tiruchirapalli v. Metro Fabrics
[Citation -2019-LL-0819-129]

Citation 2019-LL-0819-129
Appellant Name Commissioner of Income-tax-I, Tiruchirapalli
Respondent Name Metro Fabrics
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 19/08/2019
Assessment Year 2002-03
Judgment View Judgment
Keyword Tags profit on sale • low tax effect • monetary limit • accrual basis • depb
Bot Summary: 1704/Mds/2009 on the file of the Income Tax Appellate Tribunal, Chennai 'D' Bench for the assessment year 2002-03. This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 is directed against the order dated 12.1.2010 made in ITA.No. The appeal was admitted on 23.8.2010 on the following substantial questions of law : i. Whether, on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the face value of DEPB is chargeable to tax on accrual basis and that the profit on sale of DEPB representing the excess of sale proceeds of DEPB over its face value is liable to be considered under Section 28(iiid) at the time of its sale And ii. 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. It is further submitted that the tax effect in this case is less than the threshold limit. 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.785 of 2010 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.785 of 2010 Commissioner of Income Tax -I, Tiruchirapalli ...Appellant Vs M/s.Metro Fabrics, Karur ...Respondent APPEAL under Section 260A of Income Tax Act, 1961 against order dated 12.1.2010 made in ITA.No.1704/Mds/2009 on file of Income Tax Appellate Tribunal, Chennai 'D' Bench for assessment year 2002-03. For Appellant: Mr.M.Swaminathan, SSC, assisted by Ms.S.Premalatha, SC For Respondent: Mr.N.Quadir Hoseyn Judgment was delivered by T.S.Sivagnanam,J We have heard Mr.M.Swaminathan, learned Senior Standing Counsel, assisted by Ms.S.Premalatha, learned Standing Counsel appearing for appellant Revenue and Mr.N.Quadir Hoseyn, learned counsel appearing for respondent assessee. 1/4 http://www.judis.nic.in TCA.No.785 of 2010 2. This appeal, filed by Revenue under Section 260A of Income Tax Act, 1961 is directed against order dated 12.1.2010 made in ITA.No. 1704/Mds/2009 on file of Income Tax Appellate Tribunal, Chennai 'D' Bench for assessment year 2002-03. 3. appeal was admitted on 23.8.2010 on following substantial questions of law : i. Whether, on facts and circumstances of case, Income Tax Appellate Tribunal was right in holding that face value of DEPB is chargeable to tax on accrual basis and that profit on sale of DEPB representing excess of sale proceeds of DEPB over its face value is liable to be considered under Section 28(iiid) at time of its sale? And ii. Whether, on facts and in circumstances of case, Income Tax Appellate Tribunal was right in not holding that scheme of DEPB is not automatic benefit to exporter in form of cash assistance, but arises only on making application to concerned Authority pursuant to exports and is in nature of 'benefit of perquisite arising out of business' and therefore, is chargeable to tax under Section 28(iv)? 2/4 http://www.judis.nic.in TCA.No.785 of 2010 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 'D' Bench. RS 3/4 http://www.judis.nic.in TCA.No.785 of 2010 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS TCA.No.785 of 2010 19.8.2019 4/4 http://www.judis.nic.in Commissioner of Income-tax-I, Tiruchirapalli v. Metro Fabric
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