ASSISTANT COMMISSIONER OF INCOME-TAX vs. M/S. RAJESH TRADERS, KOLHAPUR

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ITA 217/PUN/2016Status: DisposedITAT Pune01 August 2018AY 2011-123 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 held that the appeal filed by the Revenue was liable to be dismissed due to low tax effect, as it was below the monetary limit prescribed by CBDT Circular No. 3/2018.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting a disallowance of partner remuneration. The disallowance was made by the AO on additional income declared during a survey operation.

What were the issues?

Whether the appeal is maintainable on grounds of low tax effect as per CBDT circulars.

Which sections of the Income-tax Act were involved?

Section 40(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM

For Appellant: Shri Mukesh Jha
For Respondent: Shri Pramod Shingte
Hearing: 26.07.2018Pronounced: 01.08.2018

आदेश / ORDER

PER D. KARUNAKARA RAO, AM

This appeal is filed by the Revenue against the order of CIT(A)-2, Kolhapur, dated 15-12-2015 for the A.Y. 2011-12.

2.

Grounds raised by the Revenue are extracted below :

“1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the disallowance made by the AO out of deduction u/s.40(b) of the I.T. Act, 1961 of Rs.48,38,949/- having tax effect of Rs.14,95,235/- claimed as remuneration to partner on the amount of additional income declared during survey operation.

2 ITA No.217/PUN/2016 M/s. Rajesh Traders

2.

On the facts and in the circumstances of the case and in law, the Ld.CIT(A) is not justified in ignoring that the additional income declared during the survey cannot be treated as business income eligible for deduction u/s.40(b) of the I.T. Act, 1961 and hence erred in allowing assessee’s appeal on this ground. 3. The appellant prays that the order of the Ld.CIT(A)-2, Kolhapur be vacated and that of the Assessing Officer’s order may be restored. 4. The appellant craves leave to add, alter, amend and modify the above grounds raised, any other grounds at the time of proceedings before the Hon’ble Tribunal which may please be granted.

3.

At the outset, Ld. AR for the assessee submitted that the appeal filed

by the Department is liable to be dismissed on account of low tax effect. The

Ld. AR pointed that as per CBDT Circular No.3/2018 dated 11th July, 2018,

the monetary limit for filing of appeal by the Department before the Tribunal

is Rs.20 Lakhs, therefore, the appeal filed by the Department is not

maintainable.

4.

On the other hand, the Ld. DR for the Revenue defended the

assessment order and prayed for reversing the findings of the CIT(A).

However, the Ld. DR fairly admitted that the tax effect in the present appeal

is less than Rs.20 Lakhs.

5.

Both sides heard. On perusal of the facts of the case, we find this is a

case where AO disallowed Rs.48,38,949/- on account of remuneration paid

to partners u/s.40B of the Act and the CIT(A) confirmed the said addition

made by the AO. However, as mentioned by both the representatives, the

total tax effect involved in the present appeal works out to Rs.14,95,235/-.

The CBDT circular No.3/2018 dated 11th July, 2018 raised the monetary

limit of tax effect for filing of appeal by the Department before the Tribunal to

Rs.20 Lakhs. The circular applies to the pending appeals of the Department

before the Tribunal too. Thus, in view of the CBDT circular, we are of the

3 ITA No.217/PUN/2016 M/s. Rajesh Traders

opinion that the present appeal of the Revenue is liable to be dismissed on account of low tax effect without going into the merits of the case.

6.

In the result, the appeal of the Revenue is dismissed.

Order pronounced on 01st day of August, 2018. Sd/- Sd/-

(िवकास अव थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �ाियक सद�/JUDICIAL MEMBER लेखा सद�/ACCOUNTANT MEMBER पुणे / Pune; िदनांक / Dated : 01st August, 2018. Satish

आदेश की 'ितिलिप अ)ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��थ� / The Respondent. 2. 3. The CIT(Appeals)-2, Kolhapur 4. The CIT(Central), Pune िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “बी” ब"च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड% फ़ाइल / Guard File. 6.

आदेशानुसार / BY ORDER,

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.

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