ITO, WARD- 25(3), NEW DELHI vs. TIMBMET DOORS SOLUTIONS PVT. LTD., NEW DELHI

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ITA 4777/DEL/2017Status: DisposedITAT Delhi13 April 2021AY 2012-134 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 noted that the tax effect of the appeal was below the threshold limit set by CBDT circulars for filing appeals. The Revenue's counsel agreed that the appeal was not maintainable and did not press the appeal.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order concerning the assessment year 2012-13. The appeal raised several grounds related to the calculation of turnover, expenses, and foreign exchange gains for deduction under Section 10AA.

What were the issues?

The primary issue was the maintainability of the appeal due to the low tax effect, as per CBDT circulars. The substantive grounds of appeal concerned the computation of export turnover and eligible deductions.

Which sections of the Income-tax Act were involved?

Section 10AA

AI-generated summary — verify with the full judgment below

(A) This appeal by Revenue is filed against the order of Learned Commissioner of Income Tax (Appeals)- 15, Delhi, [“Ld. CIT(A)”, for short], dated 27.03.2017 for Assessment Year 2012-13. Grounds taken in this appeal of Revenue are as under:

”1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the total turnover is also required to be reduced by the amounts of clearing and forwarding charges, freight outward and marine insurance aggregating to Rs. 1,37,88,595/- as has been done in the case of arriving at export turnover.

2.

On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that Fumigation Charges of Rs. 1,73,094/-; Technical & Consultancy Charges of Rs. 3,66,750/- & Product Certification Fee of Rs. 4,03,547/- were meant for entire production facility & not exclusively for the production relating to exports completely ignoring the fact Page 1 of 4 ITA No.- 4777/Del/2017 Timbmet Doors Solutions Pvt. Ltd. that the major contribution to the kitty of assessee was from exports as export constituted 94% of the total receipts of assessee.

3.

On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that Foreign Exchange Gain realized amounting to Rs. 86,28,311/- and unrealized gain on restatement of forex monetary assets of Rs. 39,34,834/- were to be considered before arriving at net business profits for deduction u/s 1OAA.

4.

The Appellant craves for reserving the right to amend, modify, alter, add or forego any of the Ground(s) of Appeal at any time before or during the hearing of this appeal.”

(B) At the outset, it was brought to our notice at the time of hearing, by learned Counsel for assessee, that tax effect in this appeal is below Rs. 50,00,000/-. Vide recent CBDT Circular No. 17/2019 dated 08.08.2019 read with earlier CBDT Circular No. 3 of 2018, dated 11.07.2018, minimum threshold limit of tax effect for filing of appeals by Revenue in Income Tax Appellate Tribunal (“ITAT”, for short) has been enhanced to Rs. 50,00,000/-. In a subsequent clarification issued by CBDT vide F.No. 279/Misc/M- 93/2018-ITJ, dated 20/08/2019, it has been clarified by CBDT that the aforesaid revised monetary limit is also applicable to all pending appeals in ITAT. In view of the foregoing, it was contended by Ld. Counsel for assessee, that this appeal is not maintainable. Learned Senior Departmental Representative [“Ld. Sr. DR”, for short) agreed with this contention of the Ld. Counsel for assessee, and did not press the appeal. Therefore, this appeal is dismissed being not pressed; and also being not maintainable having regard to aforesaid CBDT Circular No. 17/2019 dated 08.08.2019 read with aforesaid CBDT Circular No. 3 of 2018 in the light of aforesaid clarification dated 20/08/2019.

(C) Before leaving, we clarify that Revenue will be at liberty to approach Income Tax Appellate Tribunal U/s 254(2) of Income Tax Act, 1961 seeking

ITA No.- 4777/Del/2017 Timbmet Doors Solutions Pvt. Ltd. recall of this order and, for restoration of this appeal if it is found that appeal of Revenue is not covered by aforesaid CBDT Circulars dated 08.08.2019 and 11.07.2018.

(D) In the result, this appeal by Revenue is dismissed. Our decision was orally pronounced in the Open Court in the presence of representatives of both sides, after conclusion of hearing on 12/04/2021. Now, this written order is signed today on 13/04/21.

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