Principal Commissioner of Income-tax 4, Chennai v. MCC Finance Ltd. (Formerly Mercantile Credit Corporation Ltd.)
[Citation -2020-LL-0306-64]
| Citation | 2020-LL-0306-64 |
|---|---|
| Appellant Name | Principal Commissioner of Income-tax 4, Chennai |
| Respondent Name | MCC Finance Ltd. (Formerly Mercantile Credit Corporation Ltd.) |
| Court | HIGH COURT OF MADRAS |
| Relevant Act | Income-tax |
| Date of Order | 06/03/2020 |
| Judgment | View Judgment |
| Keyword Tags | disallowance of interest • commercial expediency • interest free loan • monetary limit • surplus funds • tax effect |
| Bot Summary: | Respondent in all appeals Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal 'C' Bench, Chennai dated 4.5.2016 in ITA Nos.911/Mds/2015, 1597/Mds/2015 and 1598/Mds/2015 respectively. In Order in TCA Nos.77 to 79 /2017, dated 06.03.2020 JUDGMENT Judgment of the Court was delivered by DR.VINEET KOTHARI,J These Tax Case Appeals have been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai, by raising the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case and in law, Appellate Tribunal was right in holding that no interest disallowance under section 36(1)(iii) could be made since assessee had surplus funds at its disposal 2. Whether, on the facts and in the circustances of the case and in law, Appellate Tribunal was correct and justified in deleting the disallowance of interest when assessee NBFC engaged in finance business failed to prove the commercial expediency in advancing interest free loan to employees of MAC group or to Star Enterprises and in addition to the above questions of law, the following questions of law were also raised for consideration in respect of TC.(A) No.79 of 2017. Whether, on the facts and in the circumstances of the case and in law, Appellate Tribunal was right and justified in holding that assessee is entitled to depreciation on assets which were retained by lessees even after expiry of lease period 2. When the matter was taken up for 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 8th August 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.1,00,00,000/-. In the instant case, 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. |