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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
ITA 2857/MUM/2018 & CO. 183/MUM/2018 Synergy Properties & Investment India Pvt. Ltd. 2 ORDER
PER N.K. PRADHAN, AM
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).
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/-.
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
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.
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