Commissioner of Income -tax-I, Chennai v. IP Rings Limited
[Citation -2020-LL-0128-14]

Citation 2020-LL-0128-14
Appellant Name Commissioner of Income -tax-I, Chennai
Respondent Name IP Rings Limited
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 28/01/2020
Assessment Year 1999-00
Judgment View Judgment
Keyword Tags disallowance of royalty • capital expenditure • revenue expenditure • enduring advantage • foreign company • monetary limit • tax effect


Judgt. dt. 28.1.2020 in T.C.A.359 to 362/2011 CIT-I v. IP Rings Ltd. 1/4 IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 28.1.2020 CORAM HON'BLE DR.JUSTICE VINEET KOTHARI AND HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (A) Nos.359 to 362 of 2011 Commissioner of Income Tax-I, Chennai. Appellant Vs. M/s.IP Rings Limited, Arjay Apex Centre, 24, College Road, Chennai 600 006. Respondent Tax Cases filed under Section 260A of Income Tax Act, 1961 against order of Income Tax Appellate Tribunal, 'B' Bench, Chennai, dated 25.2.2011 made in ITA Nos.1687/Mds/2010, 1688/Mds/2010, 1689/Mds/2010 and 1690/Mds/2010. For Appellant : Mr.Karthik Ranganathan Senior Standing Counsel For Respondent : Mr.P.Venkatnarayanan for M/s.Subbaraya Iyer COMMON JUDGMENT (Delivered by DR.VINEET KOTHARI,J) These Tax Cases have been filed by Revenue, calling in question correctness of order passed by Income Tax Appellate Tribunal, 'B' Bench, Chennai, dated 25.2.2011 made in ITA Nos.1687/Mds/2010, 1688/Mds/2010, 1689/Mds/2010 and http://www.judis.nic.in Judgt. dt. 28.1.2020 in T.C.A.359 to 362/2011 CIT-I v. IP Rings Ltd. 2/4 1690/Mds/2010, for Assessment Years 1999-2000, 2003-2004, 2004-2005 and 2005-2006, 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 Commissioner of Income-Tax (Appeals) was justified in restricting disallowance of royalty payment to foreign company to 25% only as capital expenditure and allowing 75% of royalty as revenue expenditure without appreciating that terms of agreement conferred enduring advantage to assessee and therefore entire payment fell in capital field? (ii) Whether on facts and in circumstances of case, Income Tax Appellate Tribunal was right in not adjudicating grounds raised by Revenue to effect that from assessment year 1999-2000 Income Tax Act had been amended by granting depreciation on intangible assets treated as separate "block of assets" and therefore decision of Hon'ble Supreme Court in case of Southern http://www.judis.nic.in Judgt. dt. 28.1.2020 in T.C.A.359 to 362/2011 CIT-I v. IP Rings Ltd. 3/4 Switchgear Ltd. (232 ITR 539) was not applicable in facts of instant case?" 2. When matters are taken up for hearing, learned Senior Standing Counsel 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 cases, tax effect is said to be less than monetary limit imposed and therefore, Appeals filed by Revenue are dismissed, as withdrawn, keeping open substantial questions of law for determination in appropriate cases. No costs. (V.K.,J.) (R.S.K.,J.) 28.1.2020 Index : Yes/No Internet : Yes/No ssk. To 1. Commissioner of Income Tax-I, Chennai. 2. Income Tax Appellate Tribunal, 'B' Bench, Chennai. http://www.judis.nic.in Judgt. dt. 28.1.2020 in T.C.A.359 to 362/2011 CIT-I v. IP Rings Ltd. 4/4 DR.VINEET KOTHARI, J. and R.SURESH KUMAR, J. ssk. 3. Deputy Commissioner of Income Tax, Company Circle II(3), Chennai 600 034. 4. M/s.IP Rings Limited, Arjay Apex Centre, 24, College Road, Chennai 600 006. TCA Nos.359 to 362 of 2011 28.1.2020. http://www.judis.nic.in Commissioner of Income -tax-I, Chennai v. IP Rings Limited
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