What did the Tribunal hold?

The Tribunal held that the appeal was covered by CBDT Circular No. 03/2018, which sets a monetary limit for filing appeals. Therefore, the Revenue's appeal was dismissed.

The Revenue appealed against the deletion of disallowance of sample expenses by the CIT(A). The tax effect of the additions contested by the Revenue was below the prescribed limit of Rs. 20 Lacs.

What were the issues?

Whether the Revenue's appeal should be dismissed due to low tax effect as per CBDT circular. Whether the circular applies to pending appeals.

ACIT vs Rajnish R. Khanna | ITAT Mumbai 2018

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY, JM & SHRI MANOJ KUMAR AGGARWAL, AM

आदेश / O R D E R

Per Manoj Kumar Aggarwal (Accountant Member)

Aforesaid appeal by revenue for Assessment Year [AY] 2007-08 contest the order of the Ld. Commissioner of Income-Tax (Appeals)-28 [CIT(A)], Mumbai, Appeal No.CIT(A)-28/IT-431/ACIT-17(3)/2015-16 dated 20/10/2016 qua deletion of disallowance of sample expenses of Rs.38.49 Lacs as made by Ld. AO in the quantum assessment u/s Rajnish R. Khanna Assessment Year-2007-08 143(3) vide order dated 30/03/2015. The Ld. CIT(A) has deleted the same on merits after considering assessee’s submission, against which the revenue is in further appeal before us.

At the outset, it is noted that tax effect of the quantum additions as contested by the revenue is less than prescribed limit of Rs.20 Lacs and the same is covered by recently issued low tax effect Circular No.03/2018 dated 11/07/2018 issued by Central Board of Direct Taxes [CBDT]. The Ld. DR, Shri Ram Tiwari has controverted the same by submitting that necessary instructions / certificate, in this regard, would be required from higher authorities.

We have gone through the circular and find that the tax effect of quantum in dispute is below prescribed limit of Rs.20 Lacs and the assessee stood benefitted by the above circular issued by CBDT wherein the minimum monetary limit for filing the appeals before various appellate authorities have been fixed as under:-

S. No. Appeals/ SLPs in Income-tax Monetary Limit (Rs.) matters 1 Before Appellate Tribunal 20.00,000 2 Before High Court 50.00,000 3 Before Supreme Court 1,00.00,000 The aforesaid limits, as per para 13 of the circular applies to pending appeals also. In view of the admitted position, we dismiss the revenue’s appeal. 4. So far as the contentions raised by Ld. DR is concerned, we find that aforesaid circular does not envisage obtaining of any certificate from Rajnish R. Khanna Assessment Year-2007-08 any authorities, in any manner. Nevertheless, the revenue is free to move appropriate application to recall this letter, if at a later stage, it is found that the matter is covered by any exceptions provided in the aforesaid circular. 5. The appeal stand dismissed.

Order pronounced in the open court on 25th July, 2018

ACIT 17(3), MUMBAI vs. RAJNISH R. KHANNA, MUMBAI

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