The Commissioner of Income-tax, Chennai v. R.K. Swamy BBDO Pvt. Ltd
[Citation -2020-LL-0113-81]

Citation 2020-LL-0113-81
Appellant Name The Commissioner of Income-tax, Chennai
Respondent Name R.K. Swamy BBDO Pvt. Ltd.
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 13/01/2020
Judgment View Judgment
Keyword Tags monetary limit • sister concern • trading loss • tax effect • bad debt • interest on borrowed fund • commercial expediency
Bot Summary: Batch Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that, the rental amounts paid to another Company under the same management in excess of the amounts paid by other tenants of the same building should not be disallowed under Section 40A(2) of the Act Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that, the interest on borrowed amounts diverted to its sister concern as rental advances cannot be disallowed and the advances should be treated as having been made for commercial expediency 2. When the matter is taken up for final hearing, the learned Standing Counsel brought to our notice the Circular instruction issued by the Central Board of Direct Taxes vide Circular No.17/2019 dated 08.08.2019, wherein it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1 Crore. In the instant cases, the tax effect is said to be less than the monetary limit imposed and therefore, the appeals filed by the Revenue is dismissed as not pressed, keeping open the substantial questions of law for determination in an appropriate case.


IN HIGH COURT OF JUDICATURE AT MADRAS DATED:13.01.2020 CORAM HON'BLE DR.JUSTICE VINEET KOTHARI AND HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case Appeal Nos.1151, 1152, 1153, 1154, 1155, 1156, 1157, 1208, 1209, 1210, 1211, 1212, 1213, 1214 and 1215 of 2008 Commissioner of Income Tax Chennai. Appellant in all Appeals Vs. M/s.R.K.Swamy BBDO Pvt Ltd No.604, Anna Salai, Chennai 600006. Respondent in all Appeals Tax Case Appeals filed under Section 260A of Income Tax Act, 1961 against common order of Income Tax Appellate Tribunal, Madras 'D' Bench, Chennai, dated 03.11.2007 in ITA Nos.392/Mds/2006, 519/Mds/2006, 1810/Mds/2005, 965/Mds/2005, 2804/Mds/2005, 167/Mds/2006, and common order dated 30.11.2007 passed in ITA Nos.1554 to 1556/Mds/2006, ITA Nos.2093/Mds/2006, 1765/Mds/2006, 1766/Mds/2006, 1767/Mds/2006 and ITA No.2195/Mds/2006. Page 1 of 4 http://www.judis.nic.in T.C.(A) Nos.1151 of 2008 etc., batch For Appellant : Mr.M.Swminathan, Standing Counsel Assisted by Ms.V.Pushpa For Respondent : Mr.A.S.Sriraman COMMON JUDGMENT (Judgment of Court was delivered by DR.VINEET KOTHARI,J) These Tax Case Appeals have been filed by Revenue calling in question correctness of order passed by Income Tax Appellate Tribunal, by raising following substantial questions of law: "(i) Whether on facts and in circumstances of case, Income Tax Appellate Tribunal was right in law in holding that, amounts not received from customers for placing their advertisements in press and electronic media could be treated as bad debt under Section 36(2)(i) even though such amount was not offered as income as income during any previous year? (ii) Whether on facts and in circumstances of case, Income Tax Appellate Tribunal was right in law in holding that, amounts not received from customers for placing their advertisements in press and electronic media could be treated as trading loss under Section 37 of Act? Page 2 of 4 http://www.judis.nic.in T.C.(A) Nos.1151 of 2008 etc., batch (iii) Whether on facts and in circumstances of case, Income Tax Appellate Tribunal was right in law in holding that, rental amounts paid to another Company under same management in excess of amounts paid by other tenants of same building should not be disallowed under Section 40A(2) of Act? (iv) Whether on facts and in circumstances of case, Income Tax Appellate Tribunal was right in law in holding that, interest on borrowed amounts diverted to its sister concern as rental advances cannot be disallowed and advances should be treated as having been made for commercial expediency? 2. When matter is taken up for final hearing, learned Standing Counsel brought to our notice Circular instruction issued by Central Board of Direct Taxes vide Circular No.17/2019 dated 08.08.2019, 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 Crore (Rupees One Crore Only). DR.VINEET KOTHARI, J. and Page 3 of 4 http://www.judis.nic.in T.C.(A) Nos.1151 of 2008 etc., batch R.SURESH KUMAR, J. KST 3. In instant cases, tax effect is said to be less than monetary limit imposed and therefore, appeals filed by Revenue is dismissed as not pressed, keeping open substantial questions of law for determination in appropriate case. (V.K.,J.) (R.S.K.,J.) 13.01.2020 Index : Yes/No Internet : Yes/No KST TCA Nos.1151 to 1157 of 2008 and 1208 to 1215 of 2008 etc., batch Page 4 of 4 http://www.judis.nic.in Commissioner of Income-tax, Chennai v. R.K. Swamy BBDO Pvt. Ltd
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