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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
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.
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
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.
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.
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.
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.
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.