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

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

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.