THE ACIT, CIRCLE-5(3), AHMEDABAD vs. M/S. SAMYAK BUILDCON, AHMEDABAD

ITA 1697/AHD/2016Status: DisposedITAT Ahmedabad27 September 2019AY 2011-123 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 held that the Revenue's appeal was not maintainable due to low tax effect, as it fell below the enhanced monetary limit prescribed by a recent CBDT circular. The assessee's cross-objection was dismissed as infructuous.

What were the facts?

The Assessing Officer (AO) appealed the CIT(A)'s deletion of an addition of Rs. 92,55,027/-. The assessee also filed a cross-objection. The Revenue's appeal was based on the AO's rejection of book results and estimation of profit due to alleged unreliability of sales and expenses.

What were the issues?

The primary issue was the maintainability of the Revenue's appeal before the ITAT due to low tax effect in light of a new CBDT circular. The secondary issue was the assessee's cross-objection supporting the CIT(A)'s order.

Which sections of the Income-tax Act were involved?

Not specified

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD BENCH ‘D’, AHMEDABAD

Heard together (2 matters)

ITA No.1697/Ahd/2016

CO No.114/Ahd/2016

Read from the judgment's own cause title. This page is filed under one of them.

By way of this appeal, the Assessing Officer has challenged correctness of the order dated 02.03.2016, passed by the learned CIT(A), Ahmedabad for the assessment year 2011-12. The assessee has also filed its Cross Objection.

Grievances raised by the Assessing Officer in its appeal are as follows:

“1. The Ld. CIT(A) has erred on facts and in law in deleting the addition of Rs.92,55,027/- made by rejecting the book results and estimating profit @ 12% of the total turnover inspite of the fact that the AO has pointed out various specific instances showing that the sales reported by the assessee as well as expenses booked are unreliable and not correct.

2. On the facts and in the circumstances of the case, the Ld. CIT(A)ought to have upheld the addition made by the A.O.

3. It is therefore, prayed that the order of the Ld. CIT(A) may be set aside and the order of the Assessing Officer be restored.

When this appeal was called out for hearing, learned counsel for the assessee submitted that the present appeal of the Revenue needs to be dismissed on account of low tax effect in view of the recent CBDT Circular No. 17 of 2019 dated 08.08.2019 whereby the monetary limits for filing the appeal by the Revenue before the Tribunal was enhanced from Rs.20 lakhs to Rs.50 lakhs. This instruction is applicable to the pending cases also. Therefore, the present appeal of the Revenue is liable to be dismissed as non-maintainable as held by this Tribunal in the case of ITO Vs. Dinesh Madhavlal Patel in for AY 1998-99 vide a consolidated order dated 14.08.2019.

The learned Departmental Representative fairly admitted that the tax effect involved in this appeal is less than the limit prescribed by the aforesaid CBDT Circular.

We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position. As learned counsel rightly contends, this appeal of the Revenue is no longer maintainable in view of the recent CBDT Circular No. 17 of 2019 dated 08.08.2019. The mandatory limit for cases in which Revenue can challenge the relief granted by the CIT(A) now stands enhanced to Rs.50 lakhs. This concession granted by the Central Board of Direct Taxes (CBDT) is retrospective in effect inasmuch as it applies to all pending appeals as well. In view of the above position, the appeal of the Revenue is no longer maintainable and must be dismissed as such.

CO No.114/Ahd/2016 Assessment Year : 2011-12 Page 3 of 3

It is, however, made clear that on re-verification at the end of the Assessing Officer it comes out that the tax effect of more than Rs.50 lakhs is being involved in the appeal or the appeal falls within the exemption clause of the Circular, then the Revenue will be at liberty to file Miscellaneous Application to recall the Tribunal order. The application should be filed within time limit prescribed in the Act.

In the result, appeal of the Revenue is dismissed due to low tax effect.

Coming to the Cross Objection filed by the assessee, as the Cross Objection filed by the assessee merely supports the order of the learned CIT(A), the Cross objection is thus dismissed as infructuous.

In the result, appeal filed by the Revenue and Cross Objection filed by the assessee, both are dismissed. Pronounced in the open court today on the 27th September, 2019.

Recent GST High Court judgments

Search GST case law →