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Income Tax Appellate Tribunal, DELHI BENCHES ‘E’, NEW DELHI
Before: Sh. Bhavnesh Saini & Dr. B. R. R. Kumar
ORDER Per B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the Revenue against the order of the Ld. CIT(A)-6, Delhi dated 07.11.2016.
The Revenue has raised the following grounds: “
1. Whe ther i n the fa cts and ci rcum stan ce s of th e case and in la w, the Ld. CI T(A ) is ju stif ied in deleting t he disa llo wan ce of Rs. 52, 89, 42 7/- u/s 14 A r.w. R 8 D of the In co me Tax Act 19 61 ( t he Act) w ith out con sideri ng legisl ative i ntend of int rodu cing section 14A by the Fina nce A ct 2 001 as clarified by the CB DT Ci rcular N o. 5 /20 14 dated 10.0 2.2 014 ?
2. Whet her in the facts and ci rcu mstan ces of the case and in la w, the Ld. CIT(A) i s ju stif ied in dele ting the d isa llo wan ce of R s. 52, 89,4 27 /- u /s 14A of the Act by ignoring legi slat ive intend of sect ion 1 4A tha t disa llo wan ce u/s 14A of the Act is no t dependen t upo n e arning of exe mpt i ncome as explained vide CB DT Ci rcu lar N o. 5/ 20 14 dated 1 0.02 .20 14?
3. Whe ther in the f act s a nd circum sta nce s of t he ca se a nd in la w, the Ld. CIT(A) i s ju stified in de leting the di sa llo wan ce o f Rs. 52, 89, 427 /- u/s 14 A of the Act wit hou t co nsidering legal principle th at allo wabil ity o r disall owabi lity of expenditure unde r the Act is n ot co ndit ion al upon the earn ing of the inco me as upheld by H on’ble Supre me Cou rt in case of CI T V s R ajend ra Prasad Moody ( 197 8) 1 15I TR 519 ?
4. Whe ther in the f act s a nd circum sta nce s of t he ca se a nd in la w, the Ld. CIT(A) is justified in no t uphold ing the disa llo wa nce u/s 1 4A r.w . R 8D of the Inco me Tax A ct 19 61 am ount ing t o Rs. 52 ,89 ,42 7/- wit hou t con sidering rati o 2 Mahagun Real Estate Pvt. Ltd. decidendi a s uphe ld in case s of CI T vs W alfo rt Share and St ock Bro ke rs P Li mited (2 010 ) 326 I TR 1 (SC) and Max opp Investme nt Vs CI T [20 12] 34 7 ITR 2 72 ( Del hi) on appli cat ion of provi sio ns of secti on 14 A of the Act ?”
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.
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.
In the result, the appeal of the Revenue is dismissed. (Order pronounced in the open Court on 09.07.2019)