The Commissioner of Income-tax, Chennai v. Vishal Surgical Equipment Pvt. Ltd
[Citation -2020-LL-0207-107]

Citation 2020-LL-0207-107
Appellant Name The Commissioner of Income-tax, Chennai
Respondent Name Vishal Surgical Equipment Pvt. Ltd.
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 07/02/2020
Judgment View Judgment
Keyword Tags compensation received • termination of agency • capital receipt • revenue receipt • monetary limit • tax effect


Judgt. dt. 7.2.2020 in T.C.A.178/2013 CIT v. Vishal Surgical 1/4 IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 7.2.2020 CORAM HON'BLE DR.JUSTICE VINEET KOTHARI AND HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.178 of 2013 Commissioner of Income Tax Chennai. Appellant Vs. M/s.Vishal Surgical Equipment Pvt. Ltd., No.22, Wallers Road, Chennai 600 002. Respondent Tax Case Appeal filed under Section 260A of Income Tax Act, 1961 against order of Income Tax Appellate Tribunal, 'D' Bench, Chennai, dated 20.1.2012 made in ITA No.1095/Mds/2011. For Appellant : Ms.V.Pushpa Senior Standing Counsel For Respondent : Mr.R.Sivaraman JUDGMENT (Delivered 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, 'D' Bench, Chennai, dated 20.1.2012 made in ITA No.1095/Mds/2011, by raising following substantial questions of law: http://www.judis.nic.in Judgt. dt. 7.2.2020 in T.C.A.178/2013 CIT v. Vishal Surgical 2/4 "(i) Whether on facts and in circumstances of case, Income Tax Appellate Tribunal was right in holding that amount received as compensation of Rs.61,39,160/- on account of cancellation of agreement of sole distributorship would not liable to be taxed? (ii) Whether on facts and in circumstances of case, Income Tax Appellate Tribunal was right in holding that compensation received in connection with termination of sole distributorship of product of another company which amounts to contract of agency is capital receipt and is contrary to expressed provision contained in Section 28(ii)(c)? (iii) Is not finding of Tribunal bad especially when compensation received by assessee on account of termination of agency is taxable as revenue receipt under head profits and gains of business? " 2. When matter is 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 http://www.judis.nic.in Judgt. dt. 7.2.2020 in T.C.A.178/2013 CIT v. Vishal Surgical 3/4 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 withdrawn, keeping open substantial questions of law for determination in appropriate cases. No costs. (V.K.,J.) (R.S.K.,J.) 7.2.2020 Index : Yes/No Internet : Yes/No ssk. To 1. Commissioner of Income Tax Chennai. 2. Income Tax Appellate Tribunal, 'D' Bench, Chennai. 3. M/s.Vishal Surgical Equipment Pvt. Ltd., No.22, Wallers Road, Chennai 600 002. 4. Assistant Commissioner of Income-tax, Company Circle III(4), Chennai. http://www.judis.nic.in Judgt. dt. 7.2.2020 in T.C.A.178/2013 CIT v. Vishal Surgical 4/4 DR.VINEET KOTHARI, J. and R.SURESH KUMAR, J. ssk. T.C.(A) No.178/2013 7.2.2020 http://www.judis.nic.in Commissioner of Income-tax, Chennai v. Vishal Surgical Equipment Pvt. Ltd
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