THE DCIT, CIRCLE-1(2), AHMEDABAD vs. SHRI MEHULBHAI DAHYABHAI PATEL, AHMEDABAD

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ITA 1181/AHD/2017Status: DisposedITAT Ahmedabad01 February 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 held that the Revenue's appeal should be dismissed based on the CBDT instruction prohibiting appeals with a tax effect below Rs. 20 lakhs. The tax effect in this case was found to be below the threshold.

What were the facts?

The Revenue appealed against the CIT(A)'s order treating short-term capital gain as income from other sources. The assessee argued that the appeal should be dismissed due to low tax effect as per CBDT instructions.

What were the issues?

Whether the Revenue's appeal is maintainable on grounds of low tax effect as per CBDT instructions.

Which sections of the Income-tax Act were involved?

Section 268A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGHShri Mehul Dahyabhai Patel

Hearing: 31/01/2019Pronounced: 01/02/2019

PER RAJPAL YADAV, JUDICIAL MEMBER: Revenue is in appeal before the Tribunal against order of ld.CIT(A)-10, Ahmedabad dated 23.2.2017 passed for the Asstt.Year 2013-14.

2.

Only ground raised in the appeal of the Revenue is that the ld.CIT(A) has erred in treating short term capital gain of Rs.1,04,04,325/- as income from other sources.

3.

The ld. counsel for the assessee at the outset submitted that the appeal of the Revenue deserves to be dismissed on account of low tax effect as per the CBDT instruction bearing no.3 of 2018 dated 11.08.2018, which prohibited the Department not to file appeal before the Tribunal, where tax

ITA No.1181/Ahd/2017 2 effective is below Rs.20 lakhs. He filed a tax calculation sheet demonstrating that tax effect on the disputed addition is below Rs.20 lakhs. It reads as under:

Particulars Amount Amount Total income as per ROI 1,32,34,240

Less; income other than STCG @ 28,29,915 normal rate Balance STCG special rate income @ 1,04,04,325 15% 24,20,111 Tax on total Income as per ROI (A) Tax on STCG @ 15% 15,60,649 SC&EC@2%+1% 46,820

Tax on STCG as per ROI 16,07,469

1,32,34,240 Assessed Income

Tax on assessed income as per DN 39,10,272

SC&EC@2% + 1% 1,17,308

Total tax as per assessed income (B) 40,24,580

Incremental tax on STCG (B-A) 16,04,469

4.

The ld.counsel for the assessee accordingly prayed that the tax effect on impugned addition being below Rs.20 lakhs, therefore, the present appeal is not 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.

ITA No.1181/Ahd/2017 3 5. 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.

6.

In the result, appeal of the Revenue is dismissed due to low tax effect. Order pronounced in the Court on 1st February, 2019 at Ahmedabad.

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

Ahmedabad; Dated 01/02/2019

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