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Income Tax Appellate Tribunal, AHMEDABAD - BENCH ‘C’
Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH
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.”
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.
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.
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.
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