ACIT, CIRCLE-10(1), NEW DELHI vs. HONDA SIEL POWER PRODUCTS LTD., NEW DELHI

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ITA 76/DEL/2022Status: DisposedITAT Delhi08 July 2025AY 2008-09Bench: SHRI RAMIT KOCHAR (Accountant Member), SHRI SUDHIR KUMAR (Judicial Member)7 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal as not maintainable because the tax effect was less than Rs. 60 lacs, as per CBDT Circular No. 09 of 2024. The dismissal was with liberty to move for restoration if the tax effect exceeds the threshold.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting a disallowance on royalty payments to AEs. The assessee is a manufacturer of portable generating sets and other products.

What were the issues?

The primary issue was the maintainability of the Revenue's appeal based on the tax effect threshold stipulated in a CBDT circular.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘I’: NEW DELHI

Before: SHRI RAMIT KOCHAR & SHRI SUDHIR KUMAR

For Respondent: Ms. Mansha Bhalla, AR
Hearing: 04.07.2025Pronounced: 08.07.2025

ORDER

PER SUDHIR KUMAR, JM

1.

The appeal by Revenue is preferred against the order of Commissioner of Income Tax (Appeals)-44, New Delhi [for short hereinafter referred to as the “(Ld. CIT(A)”] dated 20.03.2020arising ACIT Vs. Honda Siel Power Products Ltd. A.Y. 2008-09 out of the order of the AO vide dated 25.05.2017 for Assessment Year 2008-09, on the following grounds of appeal: -

1. Whether on the facts and circumstances of the case, the Ld.CIT(A) was right in deleting the disallowance made in respect of payment of royalty on sales made to AEs, whereas, this issue has been set aside by the Hon'ble ITAT for A.Y. 2008-09 to A.Υ. 2011-122

2. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in relying upon the order of Hon'ble High Court to hold that the assessee is not a contract manufacturer when this was not a Question of Law before the Hon'ble High Court.

3. The appellant craves leave to add, alter or amend any ground of appeal above at the time of hearing.

2. The brief facts of the case are that the assessee is a public limited company incorporated under the Companies Act, 1956 and is engaged in the business of manufacturing of portable generating sets, I.C. engines, water pumping sets and manufacturing and processing of pressure Die Casting Parts. The assessee company filed the return of income for the relevant previous year on 30-09- 2008 declaring total income of Rs. 37,15,75,026. The, Assessing Officer has completed the assessment u/s 143(3) r.w.s. 144C of the 2 ACIT Vs. Honda Siel Power Products Ltd. A.Y. 2008-09 Income Tax Act, 1961 [here in referred “the Act”] at an income of Rs. 55,57,99,422/- following the direction of the Ld. DRP after making several disallowances. Aggrieved the order of the assessing officer, the assessee filed the appeal before the Hon’ble ITAT. The appeal filed by the assessee was allowed by the Hon’ble ITAT by order dated 12-12-2014 and set aside the order of the assessing officer with the direction to decide the case as a fresh. In the compliance of the order of the Hon’ble ITAT the assessing officer passed the assessment order after allowing the partial relief. Aggrieved the order of the ld. Assessing officer the assessee filed the appeal before the Ld. CIT(A) who vide his order dated 20-03-2020 allowed the appeal for statistical purpose. Being aggrieved the order of the Ld. CIT(A) the Revenue is in appeal before the Tribunal.

3.

We have heard both the parties and perused the records.

4.

On the point of Tax effect in this appeal the clarification was sought from the department. The Ld. Sr. DR has submitted the report issued from the AO who admitted in his report that the case does not fall in the exception clause of the circular No. 5/2024. The report furnished by AO as under: 3

5.

The grievance of the Revenue shows that the tax effect would be less than Rs.60 lacs, therefore, the present appeal filed by the Revenue is not maintainable in the light of the CBDT Circular No.09 ACIT Vs. Honda Siel Power Products Ltd. A.Y. 2008-09 of 2024 dated 17/09/2024. The appeal is accordingly dismissed with the liberty, to move the restoration application if the tax effect found at any stage more than the Rs. 60 lacs.

6.

In the result, the appeal filed by the revenue is accordingly dismissed.

Order pronounced in the Open Court on 08.07.2025.

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