TCA.No.1180 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.1180 of 2010 Commissioner of Income Tax I, Tiruchirapalli ...App TCA.No.1180 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.1180 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 19.5.2010 made in ITA.No.1705/Mds/2009 on file of Income Tax Appellate Tribunal, Chennai 'D' Bench for assessment year 2004-05. For Appellant: Mr.M.Swaminathan, SSC assisted by Ms.V.Pushpa, SC For Respondent: Mr.Ponnaiyan Judgment was delivered by T.S.Sivagnanam,J We have heard Mr.M.Swaminathan, learned Senior Standing Counsel, assisted by Ms.V.Pushpa, learned Standing Counsel appearing for appellant Revenue and Mr.Ponnaiyan, learned counsel appearing for respondent assessee. 1/4 http://www.judis.nic.in TCA.No.1180 of 2010 2. This appeal, filed by Revenue under Section 260A of Income Tax Act, 1961 is directed against order dated 19.5.2010 made in ITA.No. 1705/Mds/2009 on file of Income Tax Appellate Tribunal, Chennai 'D' Bench for assessment year 2004-05. 3. appeal was admitted on 21.12.2010 on following substantial questions of law : i. Whether, on facts and in circumstances of case, Income Tax Appellate Tribunal was right in holding that assessee was entitled to deduction under Section 80HHC on DEPB even though conditions prescribed under Act for exporters having turnover above Rs.10 Crores had not been satisfied in assessee's case ? ii. Whether, on facts and in 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 iii. 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 2/4 http://www.judis.nic.in TCA.No.1180 of 2010 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) ? 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 RS 3/4 http://www.judis.nic.in TCA.No.1180 of 2010 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS Internet: Yes To Income Tax Appellate Tribunal, Chennai 'D' Bench. TCA.No.1180 of 2010 19.8.2019 4/4 http://www.judis.nic.in ellant Vs M/s.Metro Fabrics, Karur. ...Respondent APPEAL under Section 260A of Income Tax Act, 1961 against order dated 19.5.2010 made in ITA.No.1705/Mds/2009 on file of Income Tax Appellate Tribunal, Chennai 'D' Bench for assessment year 2004-05. For Appellant: Mr.M.Swaminathan, SSC assisted by Ms.V.Pushpa, SC For Respondent: Mr.Ponnaiyan Judgment was delivered by T.S.Sivagnanam,J We have heard Mr.M.Swaminathan, learned Senior Standing Counsel, assisted by Ms.V.Pushpa, learned Standing Counsel appearing for appellant Revenue and Mr.Ponnaiyan, learned counsel appearing for respondent assessee. 1/4 http://www.judis.nic.in TCA.No.1180 of 2010 2. This appeal, filed by Revenue under Section 260A of Income Tax Act, 1961 is directed against order dated 19.5.2010 made in ITA.No. 1705/Mds/2009 on file of Income Tax Appellate Tribunal, Chennai 'D' Bench for assessment year 2004-05. 3. appeal was admitted on 21.12.2010 on following substantial questions of law : i. Whether, on facts and in circumstances of case, Income Tax Appellate Tribunal was right in holding that assessee was entitled to deduction under Section 80HHC on DEPB even though conditions prescribed under Act for exporters having turnover above Rs.10 Crores had not been satisfied in assessee's case ? ii. Whether, on facts and in 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 iii. 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 2/4 http://www.judis.nic.in TCA.No.1180 of 2010 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) ? 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 RS 3/4 http://www.judis.nic.in TCA.No.1180 of 2010 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS Internet: Yes To Income Tax Appellate Tribunal, Chennai 'D' Bench. TCA.No.1180 of 2010 19.8.2019 4/4 http://www.judis.nic.in Commissioner of Income-tax I, Tiruchirapalli v. Metro Fabric