Principal Commissioner of Income-tax-6, Chennai v. Sunstar Hotel & Estates Pvt. Ltd
[Citation -2020-LL-0708-17]

Citation 2020-LL-0708-17
Appellant Name Principal Commissioner of Income-tax-6, Chennai
Respondent Name Sunstar Hotel & Estates Pvt. Ltd.
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 08/07/2020
Assessment Year 2013-14
Judgment View Judgment
Keyword Tags business expenses • low tax effect • income earned
Bot Summary: Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 07.6.2019 made in ITA.No. 738 of 2019 Judgment was delivered by T.S.SIVAGNANAM,J This appeal, by the Revenue under Section 260A of the Income Tax Act, 1961, is directed against the order dated 07.6.2019 made in ITA.No. The Tribunal, while allowing the assessee's appeal by the impugned order, relied upon the order of the Tribunal in the assessee's own case in ITA.No. 1242/Chny/2017 dated 27.8.2018 and extracted the said order in the impugned order in paragraph 6. The Revenue preferred an appeal before this Court challenging the said order of the Tribunal dated 27.8.2018. Since the impugned order passed by the Tribunal did not give any independent reasons for allowing the assessee's appeal to follow the earlier decision in the assessee's own case, which order now stands confirmed because the appeal filed by the Revenue before this Court having been withdrawn on the ground of low tax effect, necessarily the factual position needs to be adjudicated by the Tribunal as it is the last fact finding forum in the hierarchy of remedies available under the Act. For all the above reasons, the above tax case appeal is allowed, the impugned order is set aside and the matter is remanded to the Tribunal for a fresh consideration in accordance with law.


TCA.No.738 of 2019 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 08.7.2020 CORAM HONOURABLE MR. JUSTICE T.S.SIVAGNANAM AND HONOURABLE MRS. JUSTICE V.BHAVANI SUBBAROYAN TAX CASE APPEAL No.738 of 2019 (heard through video conferencing) Principal Commissioner of Income Tax-6, No.121, Nungambakkam High Road, Chennai-34. ...Appellant Vs M/s.Sunstar Hotel & Estates Pvt. Ltd., Chennai-17. ...Respondent APPEAL under Section 260A of Income Tax Act, 1961 against order dated 07.6.2019 made in ITA.No.3269/Chny/2018 on file of Income Tax Appellate Tribunal, Chennai D Bench for assessment year 2013-14. For Appellant : Mr.J.Narayanasamy, SSC For Respondent : No appearance 1/6 http://www.judis.nic.in TCA.No.738 of 2019 Judgment was delivered by T.S.SIVAGNANAM,J This appeal, by Revenue under Section 260A of Income Tax Act, 1961 (for short, Act), is directed against order dated 07.6.2019 made in ITA.No.3269/Chny/2018 on file of Income Tax Appellate Tribunal, Chennai D Bench for assessment year 2013-14. 2. We have heard Mr.J.Narayanasamy, learned Senior Standing Counsel appearing for appellant Revenue. Though respondent has been served and name of respondent printed in cause list, none appears for respondent. 3. appeal has been filed by Revenue by raising following substantial questions of law : 1. Whether Appellate Tribunal was right in holding that expenses, which are not attributable to business can be allowed as business expenses under Section 37 of Income Tax Act ? 2. Whether, on facts and circumstances and in law, Appellate Tribunal was right in considering income earned from financial services as business 2/6 http://www.judis.nic.in TCA.No.738 of 2019 income when main object of company was hotel business and that business had not at all commenced by assessee ? And 3. Whether Appellate Tribunal was right in allowing expenses under Section 37 of Act, when assessee altered memorandum of association and removed hotel business as one of its main object with effect from 08.3.2016 and same is not applicable to present assessment year 2013-14 ? 4. Tribunal, while allowing assessee's appeal by impugned order, relied upon order of Tribunal in assessee's own case in ITA.No.1242/Chny/2017 dated 27.8.2018 and extracted said order in impugned order in paragraph 6. Revenue preferred appeal before this Court challenging said order of Tribunal dated 27.8.2018. However, it was withdrawn on account of low tax effect. Therefore, we are of view that matter should be reconsidered by Tribunal by adjudicating into matter and more particularly grounds raised by Revenue that Tribunal ought to have considered fact that assessee altered memorandum of association and removed hotel business as one of its 3/6 http://www.judis.nic.in TCA.No.738 of 2019 main object with effect from 08.3.2016 and that same was not applicable to present assessment year namely 2013-14. 5. In grounds, learned Senior Standing Counsel for Revenue has referred to decision of Hon'ble Supreme Court in case of Tuticorin Alkali Chemicals and Fertilizers Ltd. Vs. CIT [reported in (1997) 227 ITR 172] and decision of this Court in case of K.Sampath Kumar Vs. CIT [reported in 158 ITR 25]. It has been further stated that factual position needed to be considered, as assessee company, though was incorporated on 17.2.2006, till financial year 2010-11, did not enter into its hotel business, which was main object, for which, assessee company was incorporated. Since impugned order passed by Tribunal did not give any independent reasons for allowing assessee's appeal to follow earlier decision in assessee's own case, which order now stands confirmed because appeal filed by Revenue before this Court having been withdrawn on ground of low tax effect, necessarily factual position needs to be adjudicated by Tribunal as it is last fact finding forum in hierarchy of remedies available under Act. 4/6 http://www.judis.nic.in TCA.No.738 of 2019 6. For all above reasons, above tax case appeal is allowed, impugned order is set aside and matter is remanded to Tribunal for fresh consideration in accordance with law. substantial questions of law are left open. 08.7.2020 To Income Tax Appellate Tribunal, Chennai D Bench. RS 5/6 http://www.judis.nic.in TCA.No.738 of 2019 T.S.SIVAGNANAM, J AND V.BHAVANI SUBBAROYAN, J RS T.C.A.No.738 of 2019 08.7.2020 6/6 http://www.judis.nic.in Principal Commissioner of Income-tax-6, Chennai v. Sunstar Hotel & Estates Pvt. Ltd
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