ITO - 4(2(4), MUMBAI vs. M. W. INFRA DEVELOPERS PRIVATE LTD., MUMBAI

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ITA 6690/MUM/2017Status: DisposedITAT Mumbai28 August 2019AY 2012-133 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the tax effect was indeed below the revised monetary limit for appeals. Therefore, the appeal filed by the Revenue was dismissed as not maintainable.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order which partly allowed the assessee's appeal. The assessee argued that the tax effect of the relief granted was below Rs. 50 lacs, making the appeal not maintainable as per a new CBDT circular.

What were the issues?

The primary issue was the maintainability of the Revenue's appeal before the ITAT due to the tax effect being below the revised monetary limit set by a CBDT circular.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 56

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI

Before: SHRI M. BALAGANESH (AM) & SHRI RAM LAL NEGI (JM)

For Appellant: Shri Harsh Kaparia (AR)
For Respondent: Shri J. Saravanan (CIT DR), Shri Harsh Kaparia (AR)
Hearing: 28/08/2019Pronounced: 28/08/2019

O R D E R

PER RAM LAL NEGI, JM

1.

This appeal has been filed by the revenue against the order dated 15.09.2017 passed by the Commissioner of Income Tax (Appeals)-9 (for short ‘the CIT(A), Mumbai, for the assessment year 2012-13, whereby the Ld. CIT(A) has partly allowed the appeal filed by the assessee against the assessment order passed u/s 143 (3) of the Income Tax Act, 1961 (for short the ‘Act’).

2.

Aggrieved by the order of Ld. CIT (Appeals), the revenue has preferred this appeal before the Tribunal on the following effective grounds:-

1. “On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in deleting the addition of guarantee commission of Rs. 30,00,000/- without appreciating the fact that the assessee is not engaged in the business of giving guarantee to other companies and Assessment Year: 2012-13 the same is not ancillary to the assessee’s main business of construction of infrastructure projects and, therefore, income generated through guarantee commission has to be treated as incidental income and taxable under Income from Other Sources u/s 56 of the Income Tax Act.

2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in deleting the disallowance of interest expenses amounting to Rs. 17,77,050/- without appreciating the fact that the assessee has not proved that the interest bearing funds have been utilized for the project in hand or for earning income. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in deleting the disallowance of various expenses amounting to Rs. 1,05,72,661/- without appreciating the fact that since the assessee’s project was not yet started, all related expenses has to be capitalized.”

3.

At the outset, the Ld. counsel for the respondent/assessee pointed out that the tax effect of the relief granted by the Ld. Commissioner of Income Tax (Appeals) is below Rs. 50 lacs and as per Circular No.17 of 2019 dated 08.08.2019 issued by the Central Board of Direct Taxes (CBDT), Department of Revenue, Ministry of Finance, Government of India, the CBDT has revised the monetary limit for filing appeals before the ITAT from the existing limit of Rs. 20 lacs to Rs. 50 lacs. In the light of the aforesaid facts, the Ld. counsel submitted that this appeal is not maintainable and liable to be dismissed. The Ld. counsel furnished calculation sheet, as per which, the tax effect in this case is Rs. 49,80,220/-.

4.

The Ld. Departmental Representative (DR) fairly conceded that this appeal is not maintainable in light of the aforesaid Circular issued by the CBDT, however, submitted that the department may be given liberty to file miscellaneous application in case it is found that the case falls under any of the exceptions provided in the Circular. Assessment Year: 2012-13

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