THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(1)(1), AHMEDABAD vs. M/S. INFINIUM MOTORS PVT. LTD., AHMEDABAD

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ITA 2381/AHD/2017Status: DisposedITAT Ahmedabad15 October 2019AY 2013-143 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 dismissed the Revenue's appeal as not maintainable, acknowledging the applicability of the CBDT Circular No. 17 of 2019 regarding low tax effect. The Revenue can seek restoration if the circular is found inapplicable.

What were the facts?

The Revenue appealed the deletion of a disallowance made under Section 36(1)(iii) of the Income Tax Act. The assessee argued that the appeal was hit by a CBDT circular revising monetary thresholds for appeals.

What were the issues?

Whether the Revenue's appeal is maintainable in light of the revised monetary thresholds for appeals stipulated by CBDT Circular No. 17 of 2019.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH

Pronounced: 15/10/2019

आदेश/O R D E R

PER AMARJIT SINGH - AM:

1.

The appeal filed by the Revenue for A.Y. 2013-14, arise from order of the CIT(A)-2, Ahmedabad dated 09.08.2017, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.

2.

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

“1. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance u/s. 36(1)(iii) of the IT Act. 1.1 The Ld. CIT(A) has failed to appreciate that in the case of S A Builders the Apex Court had decided the matter in the favour of the assessee owing to commercial expediency whereas in the instant case, such element is non-existent.

ACIT vs. M/s. Infinium Motors Pvt. Ltd.) A.Y. 2013-14 2 1.2 The onus lies on the assessee to demonstrate that it had interest free funds available with it for making such advances and not the other way around. 1.3 The Ld. CIT(A) has failed to appreciate that as per Section 106 of Evidence Act, when any fact is especially within the knowledge of any person, the burden of proving the fact is upon him.

2. The appellant craves to leave to amend or alter any ground or add a new ground, which may be necessary.”

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. As per aforesaid Circular, 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 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.

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