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Income Tax Appellate Tribunal, “SMC-B” BENCH : BANGALORE
Before: SHRI ARUN KUMAR GARODIA
O R D E R
Per Shri A.K. Garodia, Accountant Member
This appeal is filed by the revenue which is directed against the order of ld. CIT(A), Mangaluru dated 24.11.2017 for Assessment Year 2014-15.
The grounds raised
by the revenue are as under. “1. The CIT(A) is opposed to facts and circumstances of the case.
2. Whether on the facts and in the circumstances of the case, the CIT(A) is right in law in considering the claim of advance paid towards purchase of property which is a fresh claim made before the CIT(A) only and made before the AO during the assessment proceedings?
3. Whether on the facts and in the circumstances of the case, the CIT(A) is right in law in considering the fresh claim of the assesse made before the CIT(A) during the Appellate proceedings without giving an opportunity to AO to give his opinion regarding the fresh claim made.
4. Whether the CIT(A) is right in law in considering the claim without allowing reasonable opportunity to the AO under Rule 46A(3)(a) to examine the evidence or documents produced by the assesse before the CIT(A)
5. For these and such other grounds, it is urged that the order of the Assessing Officer may be restored 6. The appellant craves leave to add, alter or amend all or any of the grounds of Appeal before or at any time of the hearing of the appeal”
At the very outset, it was submitted by ld. AR of assessee that the tax effect in the present case is below Rs. 10 Lakhs and therefore, this appeal of the revenue is not maintainable as per the latest instructions of CBDT which says that no appeal should be filed by revenue before the Tribunal if tax effect is below Rs. 10 Lakhs excluding interest liability. In support of his contention, he submitted a copy of Income Tax computation form issued by the AO along with the assessment order and pointed out that AO has computed the tax amount at Rs. 9,72,807/- including tax of Rs. 9,44,473/- and surcharge of Rs. 28,334/- and the amount of demand indicated by the AO on page no. 2 of the assessment order of Rs. 13,52,200/- is inclusive of interest u/s. 234A of Rs. 58,368/- and u/s. 234C of Rs. 3,21,024/- making it Rs. 13,52,199/- rounded off to Rs. 13,52,200/-. In reply, ld. DR of revenue submitted that as per the working provided by the AO regarding tax effect, notional tax effect in the present case is of Rs. 1,24,47,780/- and he submitted a copy of this working provided by the AO. He submitted that in view of this working of the AO regarding the notional tax effect, the appeal of the revenue should be decided on merit.
I have considered the rival submissions. I find no merit in the submissions of ld. DR of revenue and in the working of the AO regarding notional tax effect because I find that the AO has worked out the taxable income in the assessment order at Rs. 37,14,905/- after considering the accumulation u/s. 11(1)(a) of the IT Act of Rs. 4,54,35,661/- and accumulation u/s. 11(2) of Rs. 7,04,22,171/-. If the income is computed after allowing exemption u/s. 10(23C) (iiiad), as directed by CIT (A), the gross income of the assessee will go down and similarly the accumulation u/s. 11(1) (a) and 11(2) will also go down and at the best, the assessed income will be nil. Granting of exemption u/s. 10(23C) (iiiad) reduces the income of the assessee computed by the AO in the assessment order and it cannot allow the assessee any benefit for carry forward of losses even if the exemption available u/s. 10(23C) (iiiad) is more
than the income computed by the AO in the assessment order. In the working of tax effect by the AO, he has considered the amount of exemption granted by CIT(A) u/s. 10(23C)(iiiad) and in my considered opinion this working is not valid because in the absence of allowability of carry forward of exemption u/s 10(23C)(iiiad), the tax effect depends on the amount of assessed income as per assessment order and the demand on the assessed income is less than Rs. 10 lacs excluding interest. Hence, I find force in the submissions of ld. AR of assessee that since the tax is liability as per the AO as per income tax computation form attached with the assessment order is only Rs. 9,72,807/- excluding interest liability u/s. 234A, 234B&234C, the tax effect in the present case cannot be more than the tax liability worked out by the AO and hence, in the present case, tax effect of the relief allowed by the CIT(A) is less than Rs. 10 Lakhs and therefore, I hold that in view of the latest CBDT instructions and low tax effect, the appeal of the revenue is not maintainable and the same is dismissed accordingly.
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.