THE ITO, WARD-2, ANAND vs. SHRI GAURANG RAMANBHAI PATEL, ANAND

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ITA 2955/AHD/2016Status: DisposedITAT Ahmedabad29 August 2019AY 2010-113 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 the applicability of the CBDT Circular No. 17 of 2019, which mandates dismissal of appeals where the tax effect does not exceed the revised monetary limit.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting disallowances made by the AO under Section 40A(3) and 40(a)(ia) of the Income Tax Act. The assessee argued that the appeal was hit by a new CBDT circular increasing monetary limits for appeals.

What were the issues?

Whether the Revenue's appeal is maintainable in light of the revised monetary limits prescribed by the CBDT for filing appeals.

Which sections of the Income-tax Act were involved?

Section 40A(3),Section 40(a)(ia),Section 194C

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI PRAMOD KUMAR, HON’BLE

PER PRAMOD KUMAR – VICE PRESIDENT:

1.

The captioned appeal has been filed at the instance of the Revenue against the order of the Commissioner of Income Tax (Appeals)-4, Vadodara (‘CIT(A)’ in short), dated 30.06.2016 arising in the assessment order dated 23.03.2015 passed by the Assessing Officer (AO) under s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (the Act) in the assessment year 2010-11.

[ITO vs.Shri Gaurang Ramanbhai Patel] A.Y. 2010-11 - 2 -

2.

The ground of appeal raised by the Revenue reads as under:-

“1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the A.O. to delete disallowance u/s. 40A(3) of the Act, without appreciating that the A.O. in the assessment order clearly recorded instances of cash payment exceeding Rs. 20,000/- on a single day.

2. On the facts and circumstances of the case and in law, the Ld. C.I.T. (A) erred in directing the A.O. to delete disallowance u/s. 40(A)3 of the Act, without appreciating that during the course of assessment proceedings, the assessee did not establish business expediency of making payment in cash, in view of provision of section 40(A)3 read with Rule 6DD of I.T. Act.

3. On the facts and circumstances of the case and in law, the Ld. C.I.T. (A) erred in directing the A.O. to delete disallowance u/s. 40(a)(ia) of the Act, without appreciating that the assessee’s act of awarding work of providing vehicles on hire amounted to contract within the meaning of section 194C of the Act the expression work “carriage of goods or passengers by any mode of transport other than by railways”, and without commenting on judicial decisions relied upon by the A.O. in the assessment order.

4. On the facts and circumstances of the case and in law, the Ld. C.I.T. (A) erred in holding that the ratio of Hon’ble Gujarat’s decision in the case of Siddhi Vinayak Transport vs. CIT [2013] 362 ITR 72 is applicable to the present case, without appreciating the Ld. CIT (A) in para 3.3.2 of appellate order held “There was undoubtedly sufficient material before the Assessing Officer that provisions of section 40(A)3 and 40(a)(ia) were not complied with particularly when the Assessing Officer has not mentioned about these sections in any details in the body of (original) assessment order.””

3.

At the time of hearing, it was submitted by the Ld.AR for the assessee that appeal filed by the Revenue is hit by recently issued CBDT Circular No.17 of 2019 dated 08/08/2019 revising the previous thresholds pertaining to tax effects. It is inter alia noticed that the CBDT vide Instruction No. F. No. 279/Misc/M-93/2018-ITJ dt. 20/08/2019 has observed that Circular No.17/2019 dated 08/08/2019 relating to enhancement of monetary limits is also applicable to all pending appeals. As per aforesaid Circular read with instructions, all pending appeals filed by Revenue are liable to be dismissed as a measure for reducing litigation where the tax effect does not exceed the prescribed monetary limit which is now revised at Rs.50 Lakhs. In the instant case, the tax effect on the [ITO vs.Shri Gaurang Ramanbhai Patel] A.Y. 2010-11 - 3 - disputed issues raised by the Revenue is stated to be not exceeding Rs.50 lakhs and therefore appeal of the Revenue is required to be dismissed in limine.

4.

The Learned DR for the Revenue fairly admitted the applicability of the CBDT Circular No. 17 of 2019. Accordingly, appeal of the Revenue is dismissed as not maintainable. However, it will be open to the Revenue to seek restoration of its appeal on showing inapplicability of the aforesaid CBDT Circular in any manner.

5.

In the result, the appeal of the Revenue is dismissed.

This Order pronounced in Open Court on 29/08/2019

Sd/- Sd/- (MADHUMITA ROY) (PRAMOD KUMAR) JUDICIAL MEMBER VICE PRESIDENT Ahmedabad: Dated 29/08/2019 TRUE COPY TANMAY आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।

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