The Commissioner Of Income Tax v. M/S Tvs Motor Company Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 09.09.2024 CORAM :

THE HONOURABLE MR.JUSTICE R. SURESH KUMAR AND THE HONOURABLE MR.JUSTICE C. SARAVANAN The Commissioner of Income Tax Chennai.

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Appellant Vs.

M/s. TVS Motor Company Limited Jayalakshmi Estates, 29 (Old No.8) Haddows Road, Chennai - 600 006.

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Respondent Prayer: Appeal filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras "A" Bench, Chennai dated 04.10.2012 passed in I.T.A.No.943/Mds/2011.

For the Appellant : Mr.J.Narayanaswamy Senior Standing Counsel For the Respondent : Mr.R.Vijayaraghavan for M/s.Subbaraya Aiyar Padmanabhan

JUDGMENT

This tax case appeal is directed against the common final order dated 04.10.2012 passed by the Income Tax Appellate Tribunal in I.T.A.No.943/Mds/2011 for the Assessment Year 2006-07.

2. By the impugned order, the Tribunal has also disposed a Income Tax Appeal in I.T.A.No.944/Mds/2011 for the Assessment Year 2007-08. Aggrieved over the same, the Income Tax Department had also filed T.C.A.No.351 of 2015 against the order made in I.T.A.No.944/Mds/2011 for the Assessment Year 2007-08. The said appeal has been kept pending to await for this order.

3. Both the appeals were earlier admitted on 21.07.2015. As far as the present appeal in T.C.A.No.350 of 2015 is concerned, the following substantial questions of law were framed by the Court on 21.07.2015 for being answered.:- "i) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that disallowance of expenses on Asian Project amounting to Rs.16,14,13,328/- is to be allowed?

ii) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding the disallowance of expenditure on replacement of dies and moulds amounting to Rs.6,72,36,406/- is to be allowed?

iii) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding the deduction under Section 35(1)(iv) of the Income Tax Act amounting to Rs.5,81,72,790/- is to be allowed?

iv) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that deduction under Section 35(2AB) of the Income Tax Act amounting to Rs.12,58,94,838/- is to be allowed?

v) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding the deduction under Section 80IA of Rs.61 lakhs is to be allowed?

vi) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the disallowance of Rs.8,01,793/- made on Entry tax is to be allowed? vii) Was there enough material before the Tribunal to come to such conclusion as it had arrived at and the reasoning of the Tribunal is bad?"

4. We have heard Mr.J.Narayanaswamy, learned counsel appearing for the appellant and Mr.R.Vijayaraghavan, learned counsel appearing on behalf of the respondent assessee.

5. The dispute in the present appeal pertains to the following:- i. Expenditure on ASEAN Project - Indonesia ii. Expenditure on replacement of Dies and Moulds iii. Deduction under Section 35(1)(iv) iv. Deduction under Section 35(2AB) v. Deduction under Section 80IA vi. Entry Tax

6.1. Insofar as Issue (1) is concerned, similar appeal filed by the Income Tax Department in T.C.A.No.331 of 2011 was dismissed on 08.03.2022. The issue is also covered by the decision of the Hon'ble Supreme Court of India in the case of Taparia Tools vs. JCIT1.

6.2. Issues (2) and (3) are covered in favour of the assessee by the assessee's own case reported in 364 ITR 1 (paragraph 28 to 32).

6.3. For issue (4), the order of the Assessment Year 2005-06 has been followed.

6.4. Insofar as issues (5) and (6) are concerned, the same are covered in favour of the assessee in the case of CIT vs. Thiagarajar Mills2 and 364 ITR 1 (paragraphs 33 and 34) respectively. 6.5. The same can be tabulated as under:- 1 55 taxmann.com 361 2 TC(A) Nos.69 to 70 of 2010; dated: 07.06.2010.

Si.

No.

Issues AO CIT(A) ITAT Remarks 1.

Expenditure on ASEAN Project - Indonesia Para 4 Page Para 3 to 5 ITAT followed Assessment Year 2000-01.

Para 1 In AY 2000-01, Department has accepted the order of the Tribunal on this issue and preferred appeal only on other issues which was dismissed in TC(A) No.331 of 2011 dated 08.03.2022.

In any case, ratio covered by SC decision in Taparia Tools (supra) 2.

Expenditure on replacement of Dies & Moulds Covered in favour of assessee by assessee's own case reported in 364 ITR 1 @ para Para 2 Para 9 Para 6 to 8 3.

Deduction u/s.

35(1)(iv) Covered in favour of assessee by assessee's own case reported in 364 ITR 1 @ para 28 to 32 Para 4 Para6 Para 9, 10 4.

Deduction u/s.

35(2AB) Factual.

ITAT directed R&D as certified by DSIR in Form 3CL to be given. Followed AY 2005-06 order.

Para 5 Para 7 Para 11 to 5.

Deduction u/s.80IA Covered in favour of assessee in the case of Thiagarajar Mills (supra) Para 3 Para10 Para21 to

Si.

No.

Issues AO CIT(A) ITAT Remarks 6.

Entry Tax Covered in favour of assessee by assessee's own case reported in 364 ITR 1 @ para 33 & 34.

7. Therefore, the substantial questions of law are answered Para 6 Para 12 Para 25 to against the Revenue and in favour of the respondent assessee. In view of the above, the present appeal filed by the Income Tax Department is liable to be dismissed. It is accordingly dismissed. There shall be no order as to costs.

(R.S.K., J.) (C.S.N, J) 09.09.2024 drm

To:

1. The Commissioner of Income Tax Chennai.

2. The Income Tax Appellate Tribunal Madras "A" Bench, Chennai.

R. SURESH KUMAR, J.

AND C. SARAVANAN , J.

(drm) 09.09.2024