IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 30.8.2019

CORAM :

The Honourable Mr.Justice T.S.SIVAGNANAM

and

The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN

Tax Case Appeal Nos.752 to 754 of 2016

& CMP.Nos.16288 & 16289 of 2016

The Commissioner of Income

Tax, Chennai

...Appellant in all the Appeals

Vs

M/s.AVT MC Cormick Ingredients

Ltd., Chennai-8.

...Respondent in all the Appeals

APPEALS under Section 260A of the Income Tax Act, 1961

against the common order dated 19.2.2016 made in

ITA.Nos.2167 to 2169/Mds/2013 on the file of the Income Tax

Appellate Tribunal, Chennai 'D' Bench respectively for the

assessment years 2004-05, 2005-06 and 2008-09 Against the

order dated 27.09.2013 made in ITA.NOs.17&18/2009-2010-

I/ITA NO./11-12 A -I passed by the commisioner of Income

Tax (Appeals) I,Chennai and against the order dated

20.12.2006, 28.11.2008 and 06.01.2011 passed by the

Assistant Commisioner of Income Tax,Company Circle I(1)

chennai, Deputy Commisioner of Income Tax,Company Circle I

(1), chennai and Joint commisioner of Income Tax (OSD)

Company circle I (1) Chennai respectively and (i) against

the order dated 07.12.2006 made in CR.NO.42/TPO I (AY 2004-

05 Passed by the Additonal Commisioner of Income

Tax,Transfer Pricing officer I,chenni(ii) Against the order

dated 13.06.2008 made F.NO. 104/TPO I AY 2005-06 passed by

the Joint Commisioner of Income Tax ,Transfer Pricing

offficer I,Chennai (iii) against the order dated 10.10.2011

made in .NO.104/TPO I AY 2008-09 Passed by the Joint

Commisioner of Income Tax,Transfer Pricing officer I,chenni

respectively for the Assesment Year 2004-2005, 2005-

06&2008-2009.

For Appellant:

Mr.T.Ravikumar, SSC and

Mrs.R.Hemalatha, SSC

For Respondent:

Mr.R.Sivaraman

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COMMON JUDGMENT

(Judgment was delivered by T.S.Sivagnanam,J)

We have heard Mr.T.Ravikumar and Mrs.R.Hemalatha,

learned Senior Standing Counsel appearing for the appellant

– Revenue and Mr.R. Sivaraman, learned counsel appearing

for the respondent – assessee.

2. These appeals, filed by the Revenue under Section

260A of the Income Tax Act, 1961, are directed against the

common order dated 19.2.2016 made in ITA.Nos.2167 to

2169/Mds/2013 on the file of the Income Tax Appellate

Tribunal, Chennai 'D' Bench respectively for the assessment

years 2004-05, 2005-06 and 2008-09.

3. The appeals were admitted on 14.11.2016 on the

following substantial questions of law :

“i. Whether, on the facts and in

the circumstances of the case, the

Tribunal was right in holding that the

RBI approval of the royalty rate itself

implies that the payment of royalty is

at arms' length price ? and

ii. Whether the reasoning and

finding of the Tribunal is proper

especially when the Transfer Pricing

Officer has mentioned under Section

92CA(3) in a control transaction

involved with Associate Enterprise and

had arrived at a upward adjustment on

account of price variation of product

computed under comparable uncontrolled

price method?”

4. The learned Senior Standing Counsel for the appellant

submits that the above appeals are not pursued by the

Revenue on account of the low tax effect in terms of

Circular No.17/2019 dated 08.8.2019 issued by the Central

Board of Direct Taxes. By the said Circular, the monetary

limit for filing or pursuing an appeal before the High

Court has been increased to Rs.1 Crore. It is further

submitted that the tax effect in the respective cases is

less than the threshold limit.

5. In the light of the said submissions, the above tax

case appeals are dismissed on account of the low tax

effect. The substantial questions of law framed are left

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open. In the event the tax effect in the respective cases

is above the threshold limit fixed in the said circular,