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Income Tax Appellate Tribunal, “D”
Before: SHRI MANISH BORAD, AM & SHRI AMARJIT SINGH, JM
CO. No.19/Ahd/2015 A.Y. 2010-11 आदेश / O R D E R PER AMARJIT SINGH, JM:
The Revenue as well as assessee have filed the above mentioned appeal as well as cross-objection against the different order passed by the Commissioner of Income Tax (Appeals)-XIV and CIT(A)-8, Ahmedabad [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2010-11 & 2011-12.
ITA. NO.3377/Ahd/2014
The revenue has filed the present appeal against the order dated 24.09.2014 passed by the Commissioner of Income Tax (Appeals)-XIV, Ahmedabad [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2010-11.
We have heard the Ld. Representative of the parties and perused the record. During course of hearing, ld. DR for the revenue submitted that tax effect involved in this appeal filed by the revenue is less than Rs. 50 lacs and in view of latest CBDT circular No. 3/2018 dated 11-7-2018, and also modified circular No. 17/2019 dated 08/08/2019, appeal filed by the revenue is not maintainable and needs to be dismissed. The Ld. DR, further argued that, the issue involved in this appeal is appears to be covered by exception provided under clause (e) of subsequent circular and therefore, if required the revenue shall be allowed to file miscellaneous application to re-call the order. We, find that, the CBDT, recently had issued a circular no. 3/2018 dated 11-7-2018, superseding its earlier circular no. 21/2015 and enhanced monetary limit for filing appeal before various appellate authorities and accordingly, enhanced monetary limit to Rs.20,00,000/- for filing appeal before the Tribunal. Further, the board has issued one more 2 CO. No.19/Ahd/2015 A.Y. 2010-11 circular vide Circular no.17/2019 dated 08/08/2019 and enhanced monetary limit for filing appeal before appellate Tribunal to Rs. 50,00,000/- . Further, in the said circular, the CBDT had instructed its officer’s to file application for withdrawal of appeal already filed or not to pursue pending appeals. We, therefore, by taking into account the CBDT circular No. 3/2018 dated 11-7-2018 and Circular no.17/2019 dated 08/08/2019 and also considering the fact that tax effect involved in the present appeal is less than the amount of monetary limit fixed by the CBDT for not filing appeal, dismissed appeal filed by the revenue as not maintainable. We, further noted that the Co-ordinate bench of ITAT, Ahmedabad ‘A’ Bench in ITA. No. 1398/Ahd/2004, vide order dated 14/08/2019 has passed detailed order considering new circular issued by the CBDT and held that except amendment to para 3 of the circular No.3/2018 dated 11/07/2018, all other portions of the circular No.03/2018 (supra) have remain in fact, therefore, this circular is applicable even for pending appeals and accordingly, rejected the arguments of the revenue that the effect of the circular shall come into force from the date of issue of this circular. Therefore, considering the facts and circumstances of this case and also taken note of circulars issued by the CBDT including circular No. 17/2019 dated 08/08/2019, and also by following the decision of Co-ordinate Bench, we dismissed appeal filed by the revenue as not maintainable. However, we keep open option to the revenue to file a miscellaneous application, if necessary, in case the issues involved in the present appeal comes within 3 exceptions as provided in para 10 of said circular and clause (e) of subsequent circular. In the result, appeal filed by the revenue is hereby dismissed. CO. No.19/Ahd/2015 A.Y. 2010-11 CROSS-OBJECTION NO.19/Ahd/2015
Since the appeal of the revenue has ordered to be dismissed on account of tax effect, therefore, the Ld. Representative of the assessee did not press the present CO, hence, the present CO is also hereby ordered to be dismissed being not pressed.
The assessee has filed the present appeal against the order dated 18.05.2015 passed by the Commissioner of Income Tax (Appeals)-8, Ahmedabad [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2011-12.
The assessee has raised the following grounds:- “
1 The order passed by the Ld. CIT(A) is against the Law, equity and justice.
2. The ld. CIT(A) has erred in law and on facts in uphelding disallowance of interest made by the AO. Considering as excessive paymentn to the persons specified u/s 40A(2)(b) of the Act of Rs.24,11,165/-.
3. The Ld. CIT(A) has erred in law and on facts in uphelding disallowance u/s 37(1) of the Act of business penalty being for contractual breach of Rs.50,000/- made by the Ld. AO.
4. The appellant craves liberty, to add, amend, alter or modify all or any grounds of appeal before final appeal.”
7. The assessee has raised the following additional grounds:- “1. In law and on the facts and in the circumstances of the case, the Ld. CIT(A) erred in dismissing the assessee’s ground no.2 raised before him for not granting deduction 4 CO. No.19/Ahd/2015 A.Y. 2010-11 u/s 80-IA of the I.T. Act, when the assessee is eligible for the same.
2. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal.”
8. The brief facts of the case are that the assessee filed its return of income on 29.09.2011 declaring total income to the tune of Rs.15,79,940/-. The return was processed u/s 143(1) of the I.T. Act, 1961. The case was selected for scrutiny. Notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. On verification, it was found that the assessee has paid the interest to eight parties @ 24% per annum whose names are hereby mentioned below.:- Sr. Name Amount of interest No. 1 P. G. Shrinagarpure 340583 2 Nicolian Inc. 3110629 3 Bhailal B. Patel 118044 4 Nicolian Security & Finance Pvt. Ltd. 1794918 5 Titan Technologies Pvt. Ltd. 1390741 6 Rahul B. Patel 169007 7 Varun B. Patel 24423 8 Ishan Infratech Pvt. Ltd. 285150 Total 7233495
9. Since the interest was very high, therefore, the AO treated the interest payable @ 16% per annum and remaining 8% was added to the income of the assessee u/s 40A(2)(b) of the I.T. Act. The business penalty in sum of Rs.57,500/- was also disallowed and added to the income of the assessee u/s 37(1) of the I. T. Act. It was also observed that the assessee deposited Employees Contribution towards Provident Funds after the due date of 5 CO. No.19/Ahd/2015 A.Y. 2010-11 time, therefore, the payment amount in sum of Rs.23,338/- was also disallowed and added to the income of the assessee. The total income of the assessee was assessed to the tune of Rs.40,71,940/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who dismissed the additional ground of the assessee on the basis of this fact that the same ground was not originated from the assessment order. The other claim which has been raised above while raising the ground was also declined. Feeling aggrieved, the assessee filed the present appeal before us. Additional grounds:-
10. We have heard the Ld. Representative of the parties and perused the record. At the very outset, the Ld. Representative of the assessee has argued that the claim of the assessee in view of the provisions u/s 80-IA of the Act was not taken into consideration before the AO and the CIT(A) dismissed the additional ground on the basis of this fact the same was not generated from the assessment order, therefore, in the said circumstances, the additional ground is liable to be remanded before the AO in the interest of justice. The Ld. Representative of the assessee has also argued that the claim of the assessee has been allowed by the Hon’ble ITAT in the earlier year by virtue of order dated 21.12.2012 but the claim in this year was not considered, hence, the claim of the assessee is liable to be allowed and adjudicated in the interest of justice. However, on the other hand, the ld. Representative of the Department has refuted the said contention and argued that the claim of the assessee is not justifiable in view of the decision of Hon’ble Gujarat High Court in the case of Katira Construction Ltd. Vs. Union of India (2013) 31 taxmann.com 250 (Guj). Keeping in view, the argument advanced by the Ld. Representative of the parties, we find that the assessee has claimed the adjudication of claim u/s 80-IA of the Act by virtue of letter dated 24.03.2014. The relevant 6 CO. No.19/Ahd/2015 A.Y. 2010-11 para no. 6 is hereby reproduced below.:- “6. assessee company is engaged in the business of infrastructure development. Assessee company has claimed deduction U/S 80IA (4) of the Act for first time in A.Y. 2003-04. assessee is entitle for deduction for 10 assessment year. This being ninth year, assessee is entitle for deduction in the year under reference. Hon'ble ITAT Ahmedabad has allowed, deduction U/S 80IA (4) of the Act in earlier years to the assessee. Under circumstances, Your goodself is requested to allow the deduction as per provision of law for the year under reference. Even CBDT vide its circular (14- XXXV), 11-4-1955 cast duty on the assessing officer to advise and allow the deduction/rebate which assessee is entitle and not claimed in return of income considering that assessing officer has to play fair and in accordance with law. Considering the fact, you are requested to allow deduction/S 80-IA (4) of the Act.”