AMAZON TEXTILES PVT. LTD.,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-1(1)(4), AHMEDABAD

PDF · subscribers
ITA 1406/AHD/2017Status: DisposedITAT Ahmedabad19 June 2019AY 2013-143 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the total tax effect of the deletions made by the CIT(A) was less than Rs. 20 lakhs. Consequently, the Revenue's appeal was not maintainable as per CBDT instructions.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting additions related to interest-free advances and disallowance under Section 14A. The assessee contended that the tax effect of the deletions was below the threshold for revenue appeals as per CBDT circular.

What were the issues?

Maintainability of the Revenue's appeal before the Tribunal due to low tax effect as per CBDT circular.

Which sections of the Income-tax Act were involved?

Section 14A,Section 36(1)(iii),Section 268A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD - BENCH ‘C’

Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH

For Appellant: Shri Biren Shah, AR
For Respondent: Shri Mudit Nagpal, Sr.DR
Hearing: 18/06/2019Pronounced: 19/06/2019

Heard together (2 matters)

ITA No.1406/Ahd/2017
ITA No.1648/Ahd/2017

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

आदेश/O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER:

Revenue and the Assessee are in appeals against order of the ld.CIT(A) dated 27.4.2017 passed for the Asstt.Year 2013-14.

ITA No.1406 and 1648/Ahd/2017

2 2. The Revenue has taken following grounds of appeal:

(a) That the ld.CIT(A) erred in law and on facts in deleting the addition in respect of interest free advances of Rs.43,52,172/-;

(b) That the ld.CIT(A) erred in law and on facts in deleting the addition of Rs.23,03,787/- made u/s 14A of the Act.”

3.

The ld.counsel for the assessee at the very outset submitted that the Revenue has taken incorrect amount in its grounds of appeal. In fact the ld.CIT(A) has not deleted the total addition of Rs.43,52,172/- Out of disallowance of interest expenses, the ld.CIT(A) has confirmed the disallowance at Rs.12,87,357/-. He took us through page no.33 of the order. At the end of the paragraph-5, the ld.CIT(A) has observed that “Thus, disallowance under section 36(1)(iii) made by the AO for Rs.43,52,172/- is restricted at Rs.12,87,357/-. This ground of appeal is partly allowed.” If this Rs.12,87,357/- is reduced from Rs.43,52,172/-, then tax effect on the remaining amount along with deletion of disallowance made under section 14A would be less than Rs.20 lakhs, and the appeal of the Revenue would not be maintainable in view of the recent CBDT circular restricting the filing of appeal by the Revenue before the Tribunal, where tax effective is below Rs.20 lakhs. On the other hand, the ld.DR is unable controvert this contention of the ld.counsel for the assessee.

4.

On due consideration of the above facts, we find that total addition impugned in ground no.1 and 2 deleted by the ld.CIT(A) is 53,68,602/- i.e. (Rs.43,52,172/- minus Rs.12,87,357/-) plus Rs.23,03,787/-. By virtue of this relief, tax effect would be less than Rs.20 lakhs. Therefore, in view of the CBDT instruction bearing no.3 of 2018 dated 11.08.2018, the Revenue is prohibited from filing such appeal before the Tribunal therefore, the present appeal is not

ITA No.1406 and 1648/Ahd/2017

3 maintainable at the threshold. The ld.DR has not disputed applicability of above circular cited by the ld.counsel for the assessee, and has not pointed out whether the case of the Revenue fall within the ambit of exceptions provided in the Circular or not. Thus, keeping in view the above CBDT circular, which is applicable to pending appeals also, and provisions of section 268A of the Income Tax Act, we are of the view that the appeal of the Revenue deserves to be dismissed. It is accordingly dismissed.

However, it is observed that in case on re-verification at the end of the AO it comes to the notice that the tax effect is more or Revenue’s case falls within the ambit of exceptions provided in the Circular, then the Department will be at liberty to approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed in the Act.

5.

So far as assessee’s appeal is concerned, the same has not been pressed by the ld.counsel for the assessee for adjudication, hence, the same stands dismissed for non-prosecution.

6.

In the result, the appeal of the Revenue is dismissed due to low tax effect, whereas appeal of the assessee is dismissed due to non- prosecution.

Order pronounced in the Court on 19th June, 2019 at Ahmedabad.

Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER

Ahmedabad; Dated 19/06/2019

More judgments on Section 14A

All 15,875 judgments and leading authorities on Section 14A →

Recent GST High Court judgments

Search GST case law →