DEPUTY COMMISSIONER OF INCOME TAX vs. RASIKLAL MANIKCHAND DHARIWAL (HUF),, PUNE

PER ANIL CHATURVEDI, AM :

This appeal filed by the Revenue is emanating out of the order of Commissioner of Income Tax (A) – Pune, 11 dated 27.10.2016 for A.Ys. 2004-05 and 2006-07 to 2013-14.

Assessee is an HUF. It filed its return of income for A.Y. 2011- 12 on 24.09.2012 declaring total income of Rs. 41,68,09,580/-. The case was selected for scrutiny and thereafter assessment was framed

u/s 143(3) of the Act vide order dated 30.11.2015 and the total

income was determined at Rs.42,33,80,508/- and agricultural income

at Rs.73,441/-. Aggrieved by the order of AO, assessee carried the

matter before Ld.CIT(A) who vide order dt.27.10.2016 (in appeal

No.PN/CIT(A)-11/DCIT, Cen. Cir.1(1), Pune/147/2014-15) granted

partial relief to the assessee. Aggrieved by the order of Ld.CIT(A),

Revenue is now in appeal before us and has raised the following

grounds :

“1. Whether on the facts and in the circumstances of the case, the learned CIT(A) was justified in restricting the disallowance under Rule 8D(2)(iii) to Rs.2 lakhs in each year ‘adhoc basis’ without appreciating that Section 14A(2) mandates that the amount of expenditure to be disallowed is to be determined as per the method prescribed in Rule 8D of the I.T. Rules, 1962 and when Rule 8D(2) uses the word “shall” and therefore computation of disallowance is also mandatory ? 2. The order of CIT(A) may be vacated and that of the Assessing Officer be restored.”

the Ld.A.R. seeking adjournment in the case. Ld.D.R. before us fairly

admitted that the tax effect involved in the present appeal of Revenue

is within the monetary limit prescribed by CBDT Circular dated

11.07.2018. In view of the aforesaid submission of Ld.D.R. the

adjournment was refused and we therefore proceed to decide the

appeal ex-parte qua the assessee.

on record. On perusing the grounds of appeal raised by the Revenue,

we find that Revenue is aggrieved by the order of ld. CIT(A) in respect

of the relief given by him. As per the recent announcement of Central

Board of Direct Taxes (CBDT) dated 11.07.2018 (Circular No. 3 of

2018), no Department appeals are to be filed against relief given by ld. CIT(A) before the Income Tax Appellate Tribunal unless the tax effect, excluding interest, exceeds Rs.20 lakhs and it further states that the instructions will apply retrospectively to the pending appeals also. In the present case, since it is an undisputed fact that on the addition which is in dispute, the tax effect is less than Rs.20 lakhs and in the absence of any material placed on record by the Revenue to demonstrate that the issue in the present appeal is covered by exceptions provided in para 10 of the aforesaid CBDT Circular, we are of the view that the monetary limit prescribed by the instructions of the aforesaid CBDT Circular would be applicable to the present appeal of the Department. We therefore hold the present appeal of Revenue to be not maintainable on account of low tax effect and accordingly dismiss the appeal of Revenue without expressing any opinion on merits of the case. However, in case there is any error in the computation of the tax effect involved or if for any reason, the aforesaid CBDT Circular is not applicable, it would be open to the Revenue to seek revival of the appeal. Thus, the grounds of the Revenue are dismissed.

Order pronounced on 3rd day of May, 2019.

Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER पुणे Pune; �दनांक Dated : 3rd May, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. The CIT(A)-11, Pune. The Pr. CIT(Central), Pune. 4 �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” / DR, 5. ITAT, “B” Pune; 6. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER

// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.