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

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ITA 3009/DEL/2019Status: DisposedITAT Delhi17 March 2022AY 2015-163 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 noted that the CBDT circular revised the monetary limit for filing appeals to Rs. 50 Lacs and this applied to pending appeals. Therefore, the appeal was not maintainable due to low tax effect.

What were the facts?

The Revenue appealed against an order of the CIT(A) which deleted a disallowance of interest paid on borrowed capital for share purchase. The assessee's counsel pointed out that the tax effect was below the revised monetary limit for appeals.

What were the issues?

Whether the appeal is maintainable before the Tribunal given the revised monetary limits for appeals set by the CBDT, and the low tax effect involved.

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI “E” BENCH: NEW DELHI

Before: SHRI KUL BHARAT & SHRI PRADIP KUMAR KEDIA

For Appellant: Shri Bhopal Singh, Sr.DR
For Respondent: Shri Ankit B.Agarwal, CA
Hearing: 17.03.2022Pronounced: 17.03.2022

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.

3.

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 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.

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.

5.

In conclusion, by applying the CBDT Circular dated 08.08.2019 and letter dated 20.08.2019 (supra), the captioned appeal of the Revenue is dismissed as withdrawn/not pressed.

6.

In the result, appeal of Revenue is dismissed.

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

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