INCOME TAX OFFICER 14(1)(4), MUMBAI vs. GOLDSTAR FINVEST PRIVATE LIMITED, MUMBAI

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ITA 2857/MUM/2018Status: DisposedITAT Mumbai05 November 2019AY 2010-115 pages
AI SummaryWithdrawn

What did the Tribunal hold?

The Tribunal held that the tax effect of the disputed amount was below the monetary limit prescribed by the CBDT circular for filing appeals. Therefore, the Revenue's appeal was dismissed as withdrawn.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order. The assessee filed a cross-objection supporting the CIT(A)'s order. The primary dispute involved capital gains treatment, with the Revenue treating it as short-term while the assessee admitted it as long-term.

What were the issues?

The main issue was whether the appeal filed by the Revenue should be dismissed due to the tax effect being below the prescribed monetary limit by the CBDT circular. The underlying dispute concerned the classification of an asset for capital gains purposes.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 50

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI

Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN

For Appellant: Mr. J. Prabhakar, AR
For Respondent: Shri Chaudhury Arun Kr. Singh, Sr. DR, Mr. J. Prabhakar, AR
Hearing: 08/08/2019Pronounced: 05/11/2019

Heard together (2 matters)

CO. No. 183/MUM/2018
ITA 2857/MUM/2018

Read from the judgment's own cause title. This page is filed under one of them.

ITA 2857/MUM/2018 & CO. 183/MUM/2018 Synergy Properties & Investment India Pvt. Ltd. 2 ORDER

PER N.K. PRADHAN, AM

1.

The captioned appeal filed by the Revenue is directed against the order passed by the Commissioner of Income Tax (Appeals)-8, Mumbai [in short ‘CIT(A)’] and arises out of the assessment u/s.143(3) of the Income tax Act, 1961 [hereinafter the ‘Act’]. On the other hand, cross objection filed by the assessee supports the order passed by the ld. CIT(A).

2.

We notice that there are two primary issues in the instant case. The first one raised by the revenue pertains to the order dated 28.11.2016 of the ld. CIT(A) which has been set aside by the ITAT vide order dated 21.04.2017 with a direction that this is a case of non-depreciable asset which does not attract the provisions of Section 50 of the Act and the consequential order passed by the ld. CIT(A) dated 05.02.2018. The second issue is the submission by the assessee that the tax effect in this case is below the monetary limit fixed by the Circular issued by CBDT for not filing appeal before the Tribunal. Let us first discuss the applicability of the said Circular. Assessment Year: 2013-14 Central Board of Direct Taxes (CBDT) vide Circular No. 17/2019 3. dated 08.08.2019 has amended Circular No. 3/2018 dated 11.07.2018 for further enhancement of monetary limit for filing of appeals by the ITA 2857/MUM/2018 & CO. 183/MUM/2018 Synergy Properties & Investment India Pvt. Ltd. 3 Department before the ITAT, High Courts and SLPs/Appeals before Supreme Court as measures for reducing litigation.

CBDT vide Circular No. 3/2018 dated 11.07.2018 has specified that 4. appeals shall not be filed before the Income Tax Appellate Tribunal (ITAT) in cases where the tax effect does not exceed the monetary limit of Rs.20,00,000/-. For this purchase, ‘tax effect’ means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of issues against which appeal is intended to be filed. Further, ‘tax effect’ shall be taxes including applicable surcharge and cess. However, the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty order, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.

At para 13 of the above Circular, it has been mentioned that:

“13. This Circular will apply to SLPs/appeals/cross objection/references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/appeals/cross objections/references. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed.”

ITA 2857/MUM/2018 & CO. 183/MUM/2018 Synergy Properties & Investment India Pvt. Ltd. 4 As a step towards further management of litigation, CBDT vide 5. Circular No. 17/2019 has fixed the monetary limit for filing of appeals before ITAT at Rs.50,00,000/-.

6.

In the instant appeal filed by the revenue, the tax effect on the amount in dispute is Rs.12,00,636/-, as per the following calculation:

“Tax effect workings; Rs. ''Additions made on Capital Gains- as short Term asset 7,80,20,322 Less ; Gains admitted as Long Term asset 6,60,13,970 Balance in Dispute 1,20,06,352

Tax on additions made (income assessed) @ 30 % 36,01,06 Less Tax on disputed issue being @ 20% 24,01,270 Tax Effect (Difference) 12,00,636” Therefore, the Ld. counsel for the assessee submits that the appeal filed by the revenue be dismissed. The ld. DR fairly agrees with the above calculation of tax effect

7.

In view of the CBDT Circular No. 17/2019, this appeal involving tax effect of less than Rs.50,00,000/- is dismissed as withdrawn.

8.

In the cross objection, the assessee supports the order passed by the ld. CIT(A). As the appeal filed by the revenue has been dismissed as discussed hereinabove, the cross objection becomes academic in nature.

ITA 2857/MUM/2018 & CO. 183/MUM/2018 Synergy Properties & Investment India Pvt. Ltd. 5 9. To sum up, the appeal filed by the revenue and the cross objection filed by the assessee are dismissed.

Order pronounced in the open court on 05.11.2019

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