THE ACIT,MEHSANA CIRCLE, MEHSANA vs. M/S. NEPTUNE EQUIPMENT, MEHSANA

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ITA 2702/AHD/2011Status: DisposedITAT Ahmedabad17 September 2018AY 2008-093 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 dismissed the Revenue's appeal as not maintainable because the tax effect was below the revised monetary limit prescribed by CBDT Circular No. 3 of 2018. The Revenue can seek restoration if they can show the circular is inapplicable.

What were the facts?

The Revenue appealed against the deletion of additions made by the Assessing Officer concerning the transfer of net working assets and payments to sister concerns. During the hearing, the assessee pointed out that the appeal was hit by a CBDT circular regarding monetary limits for filing appeals.

What were the issues?

Whether the Revenue's appeal is maintainable in light of the revised monetary limits for appeals stipulated by CBDT Circular No. 3 of 2018.

Which sections of the Income-tax Act were involved?

Section 40A(2)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR

For Appellant: Shri Sanjeev Dev, Sr. D.R, Shri Mehul Talera, A.R

आदेश/O R D E R

PER PRADIP KUMAR KEDIA - AM:

The captioned appeal has been filed at the instance of the Revenue against the order of the CIT(A), Gandhinagar (‘CIT(A)’ in short), dated 23.08.2011 arising in the assessment order dated 27.12.2010 passed by the Assessing Officer (AO) under s. 143(3)

ITA No. 2702/Ahd/11 [ACIT vs. M/s. Neptune Equipment] A.Y. 2008-09 - 2 -

of the Income Tax Act, 1961 (the Act) concerning assessment year 2008-09.

2.

The grounds of appeal raised by the Revenue reads as under:-

“1. The learned CIT(Appeals) has erred in law and on facts in deleting the addition of Rs.23,00,000/- made on account of transfer of net working assets to M/s Neptune Industries P Ltd under the scheme of succession.

2.

The learned CIT(Appeals) has erred in law and on facts in deleting the addition of Rs.14,38,533/- made on account of payment made to sister concerns u/s 40A(2)(b) of the Act being not legitimate and unreasonable.”

3.

At the time of hearing, it was submitted by the Ld.AR for the assessee that the appeal filed by the Revenue is hit by recently issued CBDT Circular No.3 of 2018 dated 11/07/2018 revising the previous thresholds pertaining to tax effects. As per aforesaid Circular, all pending appeals filed by Revenue are liable to be dismissed as a measure for reducing litigation where the tax effect does not exceed the prescribed monetary limit which is now revised at Rs.20 Lakhs. In the instant case, the tax effect on the disputed issues raised by the Revenue is stated to be not exceeding Rs.20 lakhs and therefore appeal of the Revenue is required to be dismissed in limine.

4.

The Learned DR for the Revenue fairly admitted the applicability of the CBDT Circular No. 3 of 2018. Accordingly, appeal of the Revenue is dismissed as not maintainable. However, it will be open to the Revenue to seek restoration of its appeal on

ITA No. 2702/Ahd/11 [ACIT vs. M/s. Neptune Equipment] A.Y. 2008-09 - 3 -

showing inapplicability of the aforesaid CBDT Circular in any manner.

5.

In the result, the appeal of the Revenue is dismissed.

This Order pronounced in Open Court on 17/09/2018

Sd/- Sd/- (MAHAVIR PRASAD) (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 17/09/2018 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।

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