ITO, CHENNAI vs. RAKESH SARIN, CHENNAI

ITA 3049/CHNY/2019Status: DisposedITAT Chennai31 January 2020AY 2012-133 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 noted that the addition was indeed deleted by a previous Tribunal order. Furthermore, it was confirmed that the tax effect in the Revenue's appeals was below the monetary limit prescribed by the CBDT for filing appeals.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting an addition of ₹.1,60,00,000/- made on account of a loan given to M/s. Quest Films. The assessee argued that the addition was already deleted by the Tribunal in a block assessment and the tax effect was below the CBDT's monetary limit for appeals.

What were the issues?

Whether the addition made by the AO was justified, and if the Revenue's appeal was maintainable given the tax effect and prior Tribunal ruling.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned, but relates to additions and appeals based on tax effect.

AI-generated summary — verify with the full judgment below

Before: Shri Duvvuru RL Reddy & Shri S. Jayaraman

Hearing: 29.01.2020Pronounced: 31.01.2020

O R D E R PER BENCH: These five appeals filed by the Revenue relating same assessee are directed against the common order of the ld. Commissioner of Income Tax (Appeals)-18, Chennai dated 26.06.2019 relevant to the assessment years 2011-12, 2012-13, 2013-14, 2014-15 and 2015-16. The only common effective ground raised by the Revenue that the Ld. CIT(A) is not correct in appreciating the evidences with respect to loan given to M/s. Quest Films of ₹.1,60,00,000/- even though a letter was found addressed to the assessee for the delay in payment of interest received by it.

At the time of hearing the ld. Counsel for the assessee has submitted that since the quantum addition of loan amount of ₹.1,60,00,000/- has been deleted by the Tribunal in block assessment, the consequential interest estimated on the addition is untenable. Moreover, it was the submission that the tax effect in the appeal filed by the Revenue is less than the monetary limit of ₹.50,00,000/- fixed by the CBDT to file an appeal by the Revenue before the Tribunal as per the CBDT Circular No. 17/2019, dated 08.08.2019. On the other hand, the ld. DR fairly conceded the submissions made by the ld. Counsel for the assessee.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Under para 13 of the block assessment order, the Assessing Officer made addition in the hands of the assessee towards the amount advanced to Quest Films to the extent of ₹.1,60,00,000/- as undisclosed investment of the assessee. However, we find that against the addition, vide order in I.T.(SS)A. No. 66/Chny/2007 dated 11.03.2019, the Tribunal has deleted the addition. Once the addition has been deleted by the Tribunal, the consequential levy of interest on the quantum addition is untenable and did not survive. Moreover, as rightly contended by the ld. Counsel, the tax effect in the appeals filed by the Revenue are less than the monetary limit fixed by the CBDT to file an appeal by the Revenue before the Tribunal. Being so, the Revenue authorities are precluded from filing the appeal before the Tribunal, since the tax effect is less than ₹.50,00,000/- in these appeals. Accordingly, all the appeals filed by the Revenue are dismissed as on both counts.

In the result, all the appeals filed by the Revenue are dismissed.

Order pronounced on the 31st January, 2020 at Chennai.

Recent GST High Court judgments

Search GST case law →