What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal without expressing an opinion on the merits. This was based on a CBDT circular stating that appeals with a tax effect below Rs. 20 lakhs should not be filed before the ITAT.

The Revenue filed an appeal against the CIT(A)'s order deleting additions made to the assessee's income. The grounds of appeal related to capital expenditure, corporate discount/bonus receipts, and unexplained investment.

What were the issues?

The primary issue was whether the Revenue's appeal was maintainable given the low tax effect, in light of the CBDT's monetary limit for filing appeals.

DCIT vs M/S Krishna Auto Riders Pvt Ltd… | ITAT Raipur 2019

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI ANIL CHATURVEDI, AM & SHRI PARTHA SARATHI CHAUDHURY, JM

For Appellant: Shri R.D. Doshi

For Respondent: Shri A.K. Laskar

Hearing: 18.01.2019Pronounced: 18.01.2019

आदेश / ORDER

PER ANIL CHATURVEDI, AM :

This appeal filed by Revenue emanate out of the order of Commissioner of Income-Tax (A), Bilaspur dated 08-02-2016 for A.Y. 2011-12.

The grounds raised by the Revenue reads as under :

1) The CIT(A) has erred in deleting addition of Rs. 5,87,511/- made by the AO on account of treating the same as Capital expenditure incurred in the new branches opened at Raigarh an janjgir, When particulary, the expenditures give enduring benefit to the assessee and thre were no evidances suggesting that these were incurred after staring of new branches.

2) The CIT(A) has erred in deleting addition of Rs.34,99,315/- represents receipts on account of corporate discount, exchange bonus, miscellaneous receipts on the ground of overriding cluse, when particulary, the assessee had recorded all sales of vehicles made in the financial year taken/ purchased from the principle and hence, as per mercantile system of accounting all these receipts are revnue nature for the assessee.

3) The CIT(A) has erred in restricting the addition of unexplained investment at Rs.3,60,615/- as against Rs.7,21,230/- made by the AD on the basis of OVO's report, without any basis and evidence.

Before us, at the outset, Ld. A.R. submitted that the appeal of the Revenue needs to be dismissed on account of low tax effect. Ld. D.R. did not object to the aforesaid contention made by the Ld. A.R.

3 ITA No.139/RPR/2016

We have heard the rival submissions and perused the material available 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. The Circular further states that the instructions will apply retrospectively to the pending appeals also. In the present case, it is an undisputed fact that on the additions which are in dispute, the tax effect is less than Rs.20 lakhs. 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.

4 ITA No.139/RPR/2016

In the result, the appeal of Revenue is dismissed.

Order pronounced on 18th day of January, 2019.

Sd/- Sd/- PARTHA SARATHI CHAUDHURY ANIL CHATURVEDI JUDICIAL MEMBER ACCOUNTANT MEMBER

रायपुर/ RAIPUR ; ददनांक / Dated : 18th January, 2019. RK आदेश की प्रधतधलधप अग्रेधषत / Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, I.T.A.T., Raipur //True Copy// //True Copy//

आदेशानुसार / BY ORDER,

ननजी सनिव / Private Secretary आयकर अपीलीय अनिकरण, रायपुर / ITAT, Raipur.

5 ITA No.139/RPR/2016

Date 1 Draft dictated on 18.01.2019 Sr.PS/PS 2 Draft placed before author 18.01.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order

THE DEPUTY COMMISSIONER OF INCOME TAX, KORBA(CG) vs. M/S KRISHNA AUTO RIDERS PVT LTD, KORBA(CG)

What did the Tribunal hold?

What were the facts?

What were the issues?

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