ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-4(1)(2), BANGALORE vs. M/S MAINI MATERIAL MOVEMENT PVT LTD , BANGALORE

M/s. Maini Material The Assistant Movement Pvt. Ltd., 131, 6th Floor, Devatha Commissioner of Income Tax, vs. Plaza, Circle – 4 (1) (2), Residency Road, Bangalore. Bangalore – 560 025. PAN: AABCM8922D APPELLANT RESPONDENT Appellant by : Smt. Srinandini Das, Addl. CIT (DR) Respondent by : Ms. Susan Mathew, CA Date of hearing : 04.12.2018 Date of Pronouncement : 07.12.2018 O R D E R

Per Shri A.K. Garodia, Accountant Member

by the revenue are as under. “1. The Order of the Ld. CIT (A), in so far as it is prejudicial to the interest of the Revenue, is opposed to law and the fact and circumstances of the case.

2. On facts of the case, Whether the decision of the Ld CIT (A) is right in allowing the appeal of the assessee despite the fact that the provisions to section 14A makes it clear that the expenditure has to be worked out as per Rule 8D(2)(ii) & 8D(2)(iii).

3. On facts of the case, whether the decision of the Ld CIT (A) is right in allowing theappeal of assessee as the same contravenes the provisions of section 14A and also the Ld CIT (A) has not followed the instructions laid down in the Board's Circular No 5/2014 dated 11.02.2014 wherein, the Board's has made it clear that the disallowance u/s 14A r.w.r 8D has to be made even where the tax payer in a particular year has not earned any exempted income.

4. On facts of the case, Whether the decision of the Ld CIT (A) is right in allowing relief to the assessee by merely stating that the AO has not countered the arguments put forth by the assessee and the addition is not on sound footing.

5. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT (A) in so far as it relates

Page 2 of 2 to the above grounds may be reversed and that of the Assessing Officer may be restored. 6. The appellant craves leave to add, alter, amend and / or delete any of the grounds that may be urged.” 3. At the very outset, it was submitted by ld. AR of the assessee that the only dispute as per various grounds raised by the revenue is regarding deletion of the disallowance made by the AO u/s. 14A r.w.Rule 8D of Rs.18,08,880/-. She submitted that there was one more disallowance made by the AO being disallowance of research expenses of Rs. 75,42,066/- and this was also deleted by CIT(A) but as per the grounds of appeal raised by revenue in the present appeal, this issue has not been raised by revenue in its appeal and hence, the tax effect in the present appeal of the revenue is less than Rs. 20 Lakhs and therefore, as per recent CBDT instructions as per Circular No. 3/2018 dated 11.07.2018, this appeal of the revenue is not maintainable because of low tax effect. The ld. DR of revenue had nothing to say in reply. In view of the facts discussed above, this appeal of the revenue is not maintainable because of low tax effect and hence, the same is dismissed for that reason.

4. In the result, the appeal filed by the revenue is dismissed. Order pronounced in the open court on the date mentioned on the caption page.