ITO, WARD-1, CHITTORGARH , CHITTORGARH vs. M/S. C.K. MOTORS , CHITTORGARH

Assessee By Shri Gopichand Sarawwat, CA Revenue By Shri S.M. Joshi, JCIT-DR Date of hearing 22/03/2023 Date of 23/03/2023 Pronouncement O R D E R PER: SHRI MANISH BORAD, AM

This is an appeal filed by the Revenue against the order of the ld. CIT(A)-1,Udaipur dated 11-06-2020 for the assessment year 2012-13 raising therein following grounds of appeal.

2 ITA149/JODH/2022 DEVRAJ BEHARNANI VS ACIT, CIRCLE-3, JODHPUR ‘’Whether on the facts and in the circumstances of the case in law, the ld. CIT(A) was justified in deleting the disallowances of Rs.60,23,707/- made by the AO u/s 40(a)(ia) of the Act despite of the fact that second proviso to section 40(a)(ia) is applicable prospectively w.e.f. 01- 04-2013 and therefore, the same is not applicable for the A.Y. 2012-13.’’ 2.1 During the course of hearing, the DR relied upon the order of the AO.

2.2 On the other hand, the ld. AR of the assessee supported the order of the ld.CIT(A) and further submitted that the appeal filed by the Department is not maintainable on account of low tax effect as per Circular No. 17/2019. The Tax effect in the assessee’s comes out at Rs.18,61,325/- on disputed addition of Rs.60,23,707/- which means that the tax effect in this case is below Rs.50 lacs as per CBDT Circular.

2.3 We have heard both the parties and perused the materials available on record. We observed that the CBDT vide Circular No.17/2019 dated 08.08.2019 has revised the monetary limit for filing the appeals before the Tribunal to Rs.50 Lacs. Further, CBDT vide letter dated 20.08.2019 has also clarified that Circular No.17/2019

3 ITA149/JODH/2022 DEVRAJ BEHARNANI VS ACIT, CIRCLE-3, JODHPUR would be applicable to all pending appeals. In such circumstances, the present appeal filed by the Revenue in case of low tax effect is not maintainable.

2.4. Before parting, we clarify here that the Revenue shall be at liberty to approach the Tribunal for re-institution of appeal, if the requisite material is brought to show that the appeal is protected by the exceptions prescribed in para 10 of the Circular dated 11.07.2018.

2.5. Even otherwise on merits also, we fail to find any infirmity in the findings of the ld CIT(A) since the issue is regarding disallowance u/s 40(a)(ia) of the Act for non-deduction of tax at source u/s 194A of the Act on the interest of Rs.60,23,707/- paid to Tata Capital Ltd. (NBFC) and during the course of assessment proceedings itself the assessee has submitted Form 26A with the Certificate of Chartered Accountant as prescribed u/s 201(1) of the Act. In order to prove that deductee i.e. Tata Capital Limited has offered the alleged interest amount to tax by including it in its gross revenue and paid due taxes. Our view is supported by the decision of Coordinate Bench of ITAT Rajkot Bench in the case of Gujarat Pipav Port Ltd. Vs DCIT (ITA

4 ITA149/JODH/2022 DEVRAJ BEHARNANI VS ACIT, CIRCLE-3, JODHPUR Nos. 614 & 615/Rjt/2012 dated 23-08-2013 and also the decision of Coordinate Bench of ITAT, Mumbai in the case of Bhati General Hospital vs ITO (ITA No. 7202, 7203 & 7205/Mum/2017. In view of the above deliberation, the appeal of the Revenue is dismissed as per terms indicated hereinabove.

3.0 In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open Court on 23/03/2023.