THE DCIT(OSD-1)CIRCLE-4, AHMEDABAD vs. KIRI DYES INDS.LTD., AHMEDABAD

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ITA 2028/AHD/2012Status: DisposedITAT Ahmedabad14 October 2019AY 2008-093 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 low tax effect, as it fell below the enhanced monetary limit for appeals to the Tribunal as per CBDT Circular No. 17 of 2019.

What were the facts?

The Assessing Officer appealed the CIT(A)'s order deleting disallowances made under Section 14A and regarding deduction under Section 10B. The assessee argued the appeal should be dismissed due to low tax effect based on a CBDT circular.

What were the issues?

Whether the Revenue's appeal is maintainable before the Tribunal given the low tax effect in light of the CBDT circular enhancing appeal limits.

Which sections of the Income-tax Act were involved?

Section 14A,Section 10B

AI-generated summary — verify with the full judgment below

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

DCIT (OSD)-1 Vs. Kiri Dyes Ins. Ltd. Assessment Year : 2008-09 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD BENCH ‘D’, AHMEDABAD [Coram: Justice P P Bhatt, President, and Pramod Kumar, Vice President] Assessment year: 2008-09 Dy. Commissioner of Income-tax (OSD)-1 Circle 4, Ahmedabad ……………...………..Appellant Vs Kiri Dyes Industries Ltd. ……………..…........Respondent (Formerly known as Kiri Dyes & Chemicals Ltd., 53, Manekbaug Society, Ambawadi, Ahmedabad – 380 015 [PAN : AAACK 9025 C] Appearances by Vinod Tanwni for the Revenue TP Hemani, for the assessee Date of concluding the hearing : September 26, 2019 Date of pronouncement : October 14, 2019 O R D E R PER PRAMOD KUMAR, VP :

1.

By way of this appeal, the Assessing Officer has challenged correctness of the order dated 29th June 2012, passed by the learned CIT(A)-VIII, Ahmedabad for the assessment year 2008-09.

2.

Grievances raised by the Assessing Officer are as follows:

“1. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance made u/s. 14A read with Rule 8D of the Act of Rs. 11,30,218/- without appreciating the facts that the assessee has shown dividend income on mutual fund of Rs.1,50,559/- which has been claimed as exempt. During the year there was investment of Rs. 4.10 crores in units of various mutual funds. Since the assessee has incurred substantial interest cost on borrowed funds and failed to establish any nexus with the investment in shares was made out of interest free fund.

2. The Ld.CIT(A) has erred in law and on facts granted relief on account of deduction u/s. 10B of the Act to the tune of Rs.20,01,590/- without appreciating the facts that the assessee had not maintained separate books of account in respect of ECU and non EOU business to determine proper profit derived by the EOU undertaking. It was further observed by the AO that the assessee has not excluded duty drawback income amounting to Rs.97,35,571/-. In view of the above, the AO excluded the same from eligible profit of EOU,

DCIT (OSD)-1 Vs. Kiri Dyes Ins. Ltd. Assessment Year : 2008-09 Page 2 of 3 reduced expenses of Survin Lab of Rs.1,13,24,211/-, reduced trading loss of Rs. 20,01,590/- and restricted the disallowance to Rs. 9,30,02,183/-. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer.”

3.

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.

4.

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.

5.

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.

6.

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.

7.

In the result, appeal of the Revenue is dismissed due to low tax effect. Pronounced in the open court today on the 14th October, 2019.

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