ITO, NEW DELHI vs. M/S. SAHI TRADING COMPANY, NEW DELHI

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ITA 5507/DEL/2016Status: DisposedITAT Delhi15 November 2019AY 2012-135 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 appeals as not maintainable due to the tax effect being below the monetary limit set by CBDT circulars. The assessee's cross-objection was dismissed as infructuous.

What were the facts?

The Revenue filed appeals against the CIT(A)'s deletion of trading additions and additions on account of unexplained creditors. The assessee also filed a cross-objection.

What were the issues?

Maintainability of Revenue's appeal based on tax effect and the consequential status of the assessee's cross-objection.

Which sections of the Income-tax Act were involved?

Section 145(3),Section 254(2)

AI-generated summary — verify with the full judgment below

ITA No.- 5507/Del/2016 Sahi Trading Company hereby disposed off through this Consolidated Order. Grounds taken in the appeal of Revenue and the Cross Objection of the Assessee are as under:

ITA No.- 5507/Del/2016 “1. On the facts and under the circumstances of the case, the ld. CIT(A) is not justified in deleting the trading addition of Rs. 90,92,739/- being 2% of the total sales of Rs. 45,46,36,960/- made by the AO after rejecting the books of accounts u/s 145(3) of the Act.

2. On the facts and under the circumstances of the case, the ld. CIT(A) is not justified in ignoring the findings of the Assessing Officer by deleting the addition of Rs. 1,03,518/- made by AO on account of unexplained creditors by holding that the payment of these creditors is made in the subsequent year.” CO No. 8/Del/2017

1.

On the facts and circumstances of the case and in law Ld. CIT Appeal has rightly deleted addition made on the basis of profit rate of 2% because in the subsequent years Ld. AO has himself accepted the profit rate in the case of the assessee as per past history.

2.

On the facts and circumstances of the case and in law Ld. CIT is justify in deleting the addition of Rs. 1,03,518/- being unexplained trade creditors to whom payments have been made in the subsequent years.”

(B) At the outset, Learned Authorized Representative (“AR”, for short) for the Assessee brought to our notice, at the time of hearing, that tax effect in these appeals filed by Revenue is below Rs. 50,00,000/-. Both sides, [Representatives of Revenue and the Assessee] were in agreement, at the time of hearing before us, that the tax effect in the present appeals are 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 has been enhanced to Rs. 50,00,000/-. In a subsequent

ITA No.- 5507/Del/2016 Sahi Trading Company 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. Having regard to the aforesaid, learned AR for the assessee submitted that the appeals were not maintainable. The learned Departmental Representative (“Ld. DR”, for short) also did not press these appeals. Therefore, both these appeals filed by Revenue are dismissed, being not maintainable; and also being not pressed.

(B.1) The Ld. AR for the Assessee also submitted that the CO of assessee has been filed in support of order of Ld. CIT(A) to oppose the ground taken in Revenue’s appeal.

However, the CO has become infructuous and need not be decided on merits on dismissal of Revenue’s appeal vide ITA No.- 5507/Del/2016. The Cross Objection was not pressed by Ld. Counsel of assessee, at the time of hearing. The Ld. DR for Revenue was in agreement with the aforesaid submissions of the Ld. Counsel for assessee. In view of the foregoing, and as both sides agree, the CO is dismissed being infructuous and having been not pressed.

(C) Before we part, we expressly clarify that Revenue will be at liberty to approach Income Tax Appellate Tribunal U/s 254(2) of Income Tax Act, 1961; seeking restoration of one or more of these appeals 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, these two appeals filed by Revenue are dismissed being not maintainable and the corresponding Cross Objection filed by Assessee is dismissed Page 3 of 5

ITA No.- 5507/Del/2016 Sahi Trading Company being infructuous. Our decision was orally pronounced in Open Court after conclusion of hearing on the date of hearing. Now this detailed written order is pronounced in the Open Court on 15.11.2019.

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