DCIT CENT. CIR. -5(3) (ERSTWHILE DCIT CENT. CIR. -36), MUMBAI vs. JYOTI A. KULKARNI, PUNE

ITA 5118/MUM/2016Status: DisposedITAT Mumbai16 February 2022AY 2007-083 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 appeals filed by the Revenue were not maintainable as the tax effect was below the monetary limit prescribed by CBDT Circular No. 17/2019. The Departmental Representative could not dispute this fact or point to any exceptions.

What were the facts?

The Revenue filed appeals against the CIT(A)'s orders granting partial relief on disallowed commission payments for assessment years 2007-08 and 2009-10. The grounds raised concerned the validity of commission agreements, the sufficiency of evidence, and the commercial expediency of the rates paid.

What were the issues?

The primary issue was whether the Revenue's appeals were maintainable before the ITAT given the low tax effect, as per the CBDT circular.

Which sections of the Income-tax Act were involved?

Not Applicable

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” Bench, Mumbai

For Respondent: Shri Achal Sharma

Hearing: 09.02.2022Pronounced: 16.02.2022

Heard together (2 matters)

I.T.A. No. 5118/Mum/2016

I.T.A. No. 5120/Mum/2016

Read from the judgment's own cause title. This page is filed under one of them.

These are appeals by the Revenue directed against the order of learned CIT(A) for A.Y. 2007-08 & 2009-10.

2. The grounds of appeal for A.Y. 2007-08 read as under : 1. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in granting relief of Rs 88,14,830/- out of the entire commission payment of Rs 2,60,20,002/- disallowed by AO without taking into consideration the fact that the agreement entered in to by the assessee with these parties is 'silent' on the quantum of 'remuneration' to be paid to these said parties and there is neither clarification regarding the roles and responsibilities of the said parties nor any clarity on the rate of commission paid ?". 2. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in giving relief of Rs 88,14,830/- without appreciating the fact that Ld. CIT(A) has in his order also held that the assessee furnished invalid affidavits in support of her claim and the same are not in conformity with the requirements of order XIX Rule 3 of code of civil Procedure and hence do not hold any probative value and therefore, do not satisfy the claimed transaction?"

2 Smt. Jyoti A. Kulkarni

3. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is right in giving relief of Rs 88,14,830/- without taking into consideration the fact that no concrete or cogent evidence has been produced to demonstrate that the rate of commission prevailing in the market exceeded 25% of the purchase cost is reasonable and within the limit of commercial expediency ?"

The grounds of appeal for A.Y. 2009-10 read as under :

1 . "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in granting relief of Rs 78,37,617/- out of the entire commission payment of Rs 4,88,09,303/-disallowed by AO without taking into consideration the fact that the agreement entered in to by the assessee with these parties is 'silent' on the quantum of 'remuneration' to be paid to these said parties and there is neither clarification regarding the roles and responsibilities of the said parties nor any clarity on the rate of commission paid ?".

1 . "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in giving relief of Rs 78,37,6 17 /-without appreciating the fact that Ld. CIT(A) has in his order also held that the assessee furnished invalid affidavits in support of her claim and the same are not in conformity with the requirements of order XIX Rule 3 of code of civil Procedure and hence do not hold any probative value and hence do not hold any probative value and therefore, do not satisfy the claimed transaction?"

"Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is right in giving relief of Rs 78,37,617/-without taking into consideration the fact that no concrete or cogent evidence has been produced to demonstrate that the rate of commission prevailing in the market exceeded 25% of the purchase cost is reasonable and within the limit of commercial expediency ?"

At the outset it is noted that that the tax effect in these case are below the limit of Rs. 50,00,000/- fixed by CBDT vide Circular No. 17/2019 dated 8/8/2019 for filing appeal before the ITAT. Hence, these appeals by the revenue are not maintainable.

Learned Departmental Representative could not dispute the above proposition. He could not point out that the appeals fall in the exceptions carved in said circular.

3 Smt. Jyoti A. Kulkarni

Accordingly these appeals by the Revenue are dismissed as not maintainable due to low tax effect.

Order pronounced in the open court on 16.2.2022.

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