IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 04.09.2019 CORAM HON'BLE DR.JUSTICE VINEET KOTHARI AND HON'BLE MR.JUSTICE C.SARAVANAN Tax Case Appeal No.896 of 2010 Director of Income Tax (International Taxation) Chennai. .. Appellant Vs. M/s.Prasad Production Ltd., 27-28, Arunachalam Road, Saligramam, Chennai 600 073. .. Respondent Appeal under Section 260-A of Income Tax Act, 1961, against order of Income Tax Appellate Tribunal, Chennai 'C' Bench dated 09.04.2010 - ITA No.663/Mds/2003 Assessment year 2002-2003. For Appellant : Mr.Karthick Rangarajan Senior Standing Counsel. I/T. For Respondent : Mr.R.Vijayaraghavan for M/s.Subraya Aiyar Padmanaban http://www.judis.nic.in 2 /4 Tax Case Appeal No.896 of 2010 Director of Income Tax ,(International Taxation) vs. M/s.Prasad Production Ltd., JUDGMENT (By DR.VINEET KOTHARI,J.) This Tax Case Appeal has been filed by Revenue, calling in question correctness of order passed by Income Tax Appellate Tribunal, Chennai 'C' Bench, dated 09.04.2010, in ITA No.663/Mds/2003 Assessment year 2002-2003, by raising following substantial questions of law : i) "Whether on facts and in circumstances of case, Income Tax Appellate Tribunal was right in holding that payment of USD 9,02,000 held by Assessing Officer as fees for technical services was only part of equipment price including service for installation and training and payment was outside purview of Tax Deduction at Source i India? 2) Whether on facts and in circumstances of case, Income Tax Appellate Tribunal was right in holding that if remitter was under bona fide belief that no part of payment to non-resident entity was chargeable to tax; remitted was not under any statutory obligation to deduct tax at source on any part of 3 /4 Tax Case Appeal No.896 of 2010 Director of Income Tax ,(International Taxation) vs. M/s.Prasad Production Ltd., payment and also remitter need not make application to Assessing Officer u/s.195 (2) of Act? 3) Whether prejudice to preceding question, whether on facts and in circumstances of case Income Tax Appellate Tribunal was right in holding that assessee could have entertained bona fide relief that no part of payment made to non-resident entity was chargeable to tax under Income Tax Act? 2. When matter is taken up for hearing, learned Standing Counsel for Department brought to our notice Circular instruction issued by Central Board of Direct Taxes vide Circular No.17/2019, dated 8th August,2019, wherein, it is stipulated that appeals shall not be filed/pursued by Department before High Court in cases where tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). 3. In instant case, tax effect is said to be less than monetary limit imposed and, therefore, Appeal filed by Revenue is dismissed, as 4 /4 Tax Case Appeal No.896 of 2010 Director of Income Tax ,(International Taxation) vs. M/s.Prasad Production Ltd., DR.VINEET KOTHARI, J. and C.SARAVANAN, J. kkd withdrawn, keeping open substantial questions of law for determination in appropriate cases. No costs. (V.K.,J.) (C.S.N.,J.) 04.09.2019 Index : Yes/No Internet : Yes/No kkd To Income Tax Appellate Tribunal, Chennai 'C' Bench, Chennai. TCA No.896 of 2010 Director of Income-tax (International Taxation), Chennai v. Prasad Production Ltd