ACIT CORPORATE CIRCLE 6 (1), CHENNAI V. M/S CHEMPLAST SANMAR LTD, CHENNAI

MA 121/CHNY/2025

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The case involves the Assistant Commissioner of Income Tax, Corporate Circle-6(1), Chennai as the appellant and M/s. Chemplast Sanmar Ltd. as the respondent. The Revenue filed a Miscellaneous Application seeking recall of an earlier order dismissing their appeal due to the low tax effect, which was below Rs. 60 lakhs. The Revenue argued that the tax effect was actually higher due to an addition of Rs. 3,62,85,000 made by the Assessing Officer (AO). However, the assessee contested this, providing evidence that the actual tax potential remained below the threshold. The Tribunal, after considering the submissions and evidence, dismissed the Revenue's MA, affirming the applicability of the CBDT circular.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792285 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2003-2004
• Appeal Filed On: 31-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. ANITHA
• Assessee Lawyers: V.VIJAYARAGHAVAN; VIRTUALLY
• Keywords: Business income; Tax effect; Capital Gains

Judgement Text

"आयकर अपीलीय अधिकरण, ’डी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिर्क सदस्य एवं श्री अयिताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./MA No.121/Chny/ 2025, धििाारण वर्ा /Assessment Year: 2003-04 (ITA No.852/Chny/2018) The Assistant Commissioner of Income Tax, Corporate Circle-6(1), Chennai M/s.Chemplast Sanmar Ltd., No.9, Cathedral Road, Chennai-600086. [PAN: AAACS3779D] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr.V.Vijayaraghavan, Adv (Virtually) प्रत्यर्थी की ओर से /Revenue by : Ms.R.Anitha, Addl.CIT सुनवाई की तारीख/Date of Hearing : 01.12.2025 घोषणा की तारीख /Date of Pronouncement : 02.12.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This MA has been filed by the Revenue requesting for recalling of the order in ITA no. 852/Chny/2018 dated 20.09.2024. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time. 2.0 As per brief factual matrix of the case, the impugned order dismissing the appeal of the Revenue, was passed in the light of Ld.Counsel for the assessee inviting our attention to the CBDT instruction No.09 / 2042 dated 17.09.2024. It was concluded that in terms of the Printed from counselvise.com MA No.121 /Chny/2025 Page - 2 - of 4 impugned CBDT instruction, the appeal of the Revenue was hit by the prescribed threshold tax effect limits, authorizing Revenue to file appeal before this tribunal. The Ld.Counsel had contended that the actual tax effect after the disturbance made by the Ld.AO to its Returned Income, was less than Rs.60 lakhs and hence Revenue’s appeal was hit by impugned instruction of CBDT. After considering the arguments of the assessee order dated 20.09.2024 was passed. As per the order, the Ld.DR then had fairly conceded the applicability of the impugned circular. 3.0 Through the present MA, the appellant Revenue has requested for recall of the present order. It is the case of the Revenue that the Ld.AO has made an addition of Rs.3,62,85,000/- in this case and therefore the tax effect is higher than Rs.60 lakhs. 4.0 The Ld.Counsel for the assessee fiercely contested the MA of the appellant Revenue arguing that it is non-maintainable on account of low tax effect being less than Rs. 60 lakhs. In short, the Ld.Counsel has argued that the amount of Rs.3,62,85,000/- offered by it long term capital gains (LTCG) was reduced from the LTCG calculations and added as business income. It has been contended that the difference of income tax under the head LTCG calculations and business income is merely a 10% differential. In support of its contentions, the Ld.Counsel for the assessee has also invited our attention to the last page of AO’s order as well as the Annexure annexed by the AO in his assessment Printed from counselvise.com MA No.121 /Chny/2025 Page - 3 - of 4 order. It was stated that perusal thereof unequivocally demonstrate that the actual tax potential of this case is below the threshold limit of Rs.60 lakhs and therefore the consequential application of the impugned CBDT instruction dated 17.09.2024 supra. The Ld.Counsel for the assessee has also placed on record the detailed calculation chart to prove the veracity of its arguments. 5.0 We have heard rival submissions in the light of material available on records. Upon consideration thereof we have noted that the appeal of the Revenue is hit by the impugned circular of the CBDT dated 17.09.2024. It is also not the case of the Revenue that that the impugned appeal is saved by any of the exceptions provided in the impugned CBDT notification dated 17.09.2024. Accordingly, the MA of the Revenue is dismissed. 6.0 In the result, the MA of the Revenue is dismissed Order pronounced on 2nd , December-2025 at Chennai. Sd/- (एबी टी. वर्की) (ABY T VARKEY) न्याधयक सदस्य / Judicial Member Sd/- (अधमताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदिांक/Dated: 2nd , December-2025. KB/- Printed from counselvise.com MA No.121 /Chny/2025 Page - 4 - of 4 आदेश की प्रतततलतप अग्रेतषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai/Coimbatore/Madurai/Salem. 4. तवभागीय प्रतततनति/DR 5. गार्ड फाईल/GF Printed from counselvise.com "