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Madras High CourtTCA/1017/2014disposed of

The Commissioner Of Income Tax v. M/S Brigade Corporation India

2021-12-08Honourable Mr Justice R. Mahadevan,Honourable Mr Justice Mohammed Shaffiq3 pages

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 08.12.2021

CORAM

THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No. 1017 of 2014 The Commissioner of Income Tax Chennai .. Appellant

Versus

M/s. Brigade Corporation India Pvt Ltd Plot No. 30 & 31 Brigade Towers Financial District, Nankramguda Hyderabad - 32 .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order dated 04.07.2014 passed by the Income Tax Appellate Tribunal, "A" Bench, Chennai in I.T.A.No.358/Mds/2013 against the order of the Commissioner of Income Tax Appeals IX, Chennai-34 dated 22.11.2012 in ITA No.48/11-12/AIX in the assessment year 2007-08 and against the order of the Assistant Commissioner of Income Tax Company Circle (2), Chennai-34 dated 25.02.2011 PAN/GIR No.AAACB8785G in the assessment year 2007-08.

For Appellant :

Mr.T.Ravikumar For Respondent :

Mr. N. Quadir Hoseyn

JUDGMENT

(Judgment was delivered by R. MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 04.07.2014 passed by the Income Tax Appellate Tribunal, Bench 'A', Chennai, in I.T.A.No.358/Mds/2013, relating to the assessment year 200708. 2.By order dated 09.12.2014, this Court admitted the aforesaid tax case appeal on the following substantial questions of law:

"1. Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was right in directing the Assessing Officer to recompute the deduction under Section 10A by excluding freight and telecommunications charges etc., incurred in foreign currency both from the export turnover and from the total turnover?

2. Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was right in deleting the addition made by the Transfer Pricing Officer on account of adjustment to Arms Length Price by directing to exclude M/s.ECLERI Services on the basis of abnormal profit from the list of comparables?

3. Is not the finding of the Tribunal bad by holding that ECLERI Services is to be rejected as comparables on the basis of abnormal profit then Apollo Health Street Ltd., Eureka Outsourcing Solutions Ltd. and M/s. Tricom Infocom Solutions Ltd also requires to be rejected as they are loss making companies which is contrary to the decision rendered by the Tribunal in the case of 24/7 Customer Pvt. Ltd. (Bang) and Trilogy e-business software India P.Ltd?

4. Whether the finding of the Tribunal is perverse especially when M/s.Apollo Health Street Ltd., Eureka Outsourcing Ltd. and Tricom Infotech Limited which are all loss making companies rejected as comparables then the arithmetical mean of the balance six comparable would be 27.05% which is beyond the +1/-5% of the assessee's margin on which adjustment would be required to be made on the price recorded by the assessee?"

3. When this matter was taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, 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/- (Rupees One Crore) and in this case, the tax effect is less than the threshold limit and there is no audit objection. A memo through e-mail dated 06.12.2021 has also been filed to that effect.

4. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the

monetary limit imposed, is dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs.

Sd/- Assistant Registrar (CS-IV) //True Copy// Sub Assistant Registrar dhk To 1.The Income Tax Appellate Tribunal, Madras "A" Bench.

2.The Commissioner of Income Tax No.121, Mahatma Gandhi Road, Chennai-34.

3.The Commissioner of Income Tax Appeals IX, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai - 600 034.

4.The Assistant Commissioner of Income Tax Company Circle (2), No.121, Mahatma Gandhi Road, Nungambakkam, Chennai - 600 034.

+1cc to Mr.T.Ravikumar, Advocate SR. No.64714 +1cc to Mr.N.Quadir Hoseyn, Advocate SR. No.65030 Tax Case Appeal No.1017 of 2014 MG (CO) PR (23/12/2021)