DCIT, NEW DELHI vs. M/S. MGF MOTORS LTD., NEW DELHI

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ITA 405/DEL/2017Status: DisposedITAT Delhi09 July 2019AY 2012-132 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 departmental appeal was not maintainable as the tax effect was below the monetary limit prescribed by CBDT Circular No. 03/2018. The Ld. DR could not provide any exceptions to this circular.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order deleting disallowances related to interest-free advances and Section 14A. The tax effect in the departmental appeal was less than Rs. 20 lacs.

What were the issues?

The primary issue was the maintainability of the Revenue's appeal before the ITAT due to insufficient tax effect as per CBDT guidelines.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii),Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES ‘E’, NEW DELHI

Before: Sh. Bhavnesh SainiDr. B. R. R. Kumar

For Respondent: Ms. Rinku Singh, Sr. DR
Hearing: 08.07.2019Pronounced: 09.07.2019

ORDER

Per B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the Revenue against the order of the Ld. CIT(A)-6, Delhi dated 10.11.2016.

2.

The Revenue has raised the following effective grounds: “1. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the disallowance of Rs.36,97,825/- u/s 36 (1)(iii) of the Income Tax Act 1961 (the Act) relatable to interest free advance interest free the assessee to related parties & others even when the assessee was making huge payment of interest on loan? 2. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in deleting addition of Rs. 59,250/- u/s 14A r.w. R 8D of the Rules without considering legislative intend of introducing section 14A by the Finance Act 2001 as clarified by the CBDT Circular No. 5/2014 dated 10.02.2014?”

2 MGF Motors Ltd.

3.

According to Circular No. 03/2018 dated 11/07/2018, the CBDT in supersession of earlier instructions has directed that department’s appeals before ITAT shall not be filed in cases where the tax effect does not exceed the monetary limit of Rs. 20 lacs. The tax will not include any interest thereon. It is further clarified that if in the case of an assessee, disputed issues arise in more than one assessment year, appeal can be filed in respect of such assessment year or years in which the tax effect in respect of disputed issues exceeds the monetary limit so specified.

4.

Admittedly, in the departmental appeal, the tax effect is less than Rs. 20 lacs, therefore, departmental appeal is not maintainable. The Ld. DR could not bring to our notice any exceptions mentioned in the said Circular.

5.

In the result, the appeal of the Revenue is dismissed. (Order pronounced in the open Court on 09.07.2019)

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