DCIT, CIRCLE-16(2), NEW DELHI vs. NARINDER BAJAJ, NEW DELHI

ORDER PER KUL BHARAT, JM : This appeal filed by the Revenue for the assessment year 2015-16 is directed against the order of Ld. CIT(A)-68, New Delhi dated 31.01.2019.

The Revenue has raised following grounds of appeal:-

1. “Whether on the facts and circumstances of the case, the Ld. CIT(A) is legally justified in deleting the disallowance of Rs.70,64,205/- on account of interest paid on borrowed capital for purchase of shares on the basis of the decision of the jurisdictional Hon’ble High Court in the case of CIT vs Mithlesh Kumar 92 ITR 9 (Del) by ignoring the fact that the facts of the case relied upon by the assessee and Ld. CIT(A) are different from the present case?

2. Whether on the facts and circumstances of the case, the Ld. CIT(A) is legally justified in holding that interest expense would form part of cost of acquisition of shares, as the same had been incurred for the purpose of acquisition of the said capital asset by ignoring the fact that capitalization of borrowing costs would cease when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete? 3. That the appellant craves leave to add, amend alter or forgo any grounds/(s) of appeal raised above at the time of the hearing?” 2. However, Ld. Counsel for the assessee pointed out that the present appeal pertaining to Assessment Year 2015-16 deserves to be withdrawn as the tax effect involved in the case is below Rs.50 Lacs.

Further, CBDT vide letter dated 20.08.2019 has also clarified that Circular No.17/2019 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.

Order pronounced in the open Court on 17th March, 2022.