DCIT 10(1), MUMBAI vs. LEIGHTON WELSPUN CONTRACTORS P.LTD, MUMBAI

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ITA 5677/MUM/2013Status: DisposedITAT Mumbai30 July 2018AY 2008-094 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 noted that the tax effect of the appeal did not exceed the monetary limit of Rs. 20,00,000/-. Therefore, following the CBDT circular, the appeal filed by the Revenue was dismissed as not pressed.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order concerning depreciation on computer accessories and deletion of interest expenditure. The assessee pointed out that the tax effect was below the monetary limit prescribed by CBDT Circular No. 3/2018.

What were the issues?

Whether the tax effect of the appeal falls below the monetary limit for filing appeals before the Tribunal as per CBDT Circular No. 3/2018.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI

Before: SHRI PAWAN SINGH & SHRI N.K. PRADHAN

For Appellant: Mr. Arijit Chakravarty, AR
For Respondent: Mr. Rajesh Kumar Yadav, DR, Mr. Arijit Chakravarty, AR
Hearing: 17/07/2018Pronounced: 30/07/2018

Heard together (2 matters)

C.O No. 150/MUM/2016
ITA No. 5677/MUM/2013

Read from the judgment's own cause title. This page is filed under one of them.

M/s Leighton Welspun CO No. 150/Mum/2016 ORDER PER N.K. PRADHAN, AM Assessment Year: 2008-09 This is an appeal filed by the revenue. The relevant assessment year is 2008-09. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-21 [in short ‘CIT(A)’], Mumbai and arises out of the order u/s 143(3) of the Income Tax Act 1961, (the ‘Act’).

2.

At the beginning of the hearing, the Ld. counsel of the assessee brought to our notice Circular No. 3/2018 dated 11.07.2018 issued by the Central Board of Direct Taxes (CBDT) and submits that the tax effect is below the monetary limit of Rs.20,00,000/- and hence the appeal filed by the revenue be dismissed as withdrawn. The Bench asked the Ld. counsel and the Ld. DR to file a copy of calculation sheet indicating tax effect in the instant case. There was no submission by both the sides. Thus we arrive at the tax effect from the following discussion.

3.

The 1st ground raised by the revenue in this appeal is against the order of the Ld. CIT(A) directing the AO to allow depreciation @ 60% on computer accessories mainly UPS and peripherals, printers, Xerox machine, data card etc. To capture the tax effect, we may turn to the following grounds of appeal filed by the assessee before the Ld. CIT(A) :

M/s Leighton Welspun CO No. 150/Mum/2016 1. The AO erred in making addition of depreciation of Rs.17,05,517/- on fixed assets being computer software by reclassifying the same as ‘Intangible Assets’ eligible for depreciation at the rate of 25% instead of treating the same as ‘computers’ eligible for depreciation at the rate of 60%.

2. The AO erred in making addition of depreciation of Rs.36,01,355/- on fixed assets being printer, Xerox machiner, UPS, date card, etc. by reclassifying the same as ‘Plant & Machinery’ eligible for depreciation at the rate of 15% instead of treating the same as ‘computers’ eligible for depreciation at the rate of 60%. 3.1 The 2nd ground in the appeal filed by the revenue is against the order of the Ld. CIT(A) in deleting the addition of Rs.7,87,550/- representing interest expenditure u/s 14A r.w. Rule 8D.

4.

In the above Circular, it has been clarified that ‘tax effect’ shall be tax including applicable surcharge and cess. However, the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. An examination of the order of the Ld. CIT(A) and the grounds of appeal

filed by the revenue indicates that the tax effect herein does not exceed the monetary limit of Rs.20,00,000/- fixed for filing appeal before the Tribunal. At para 13 of the above Circular, it has been clearly mentioned that:

13. This Circular will apply to SLPs/appeals/cross objection/references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/appeals/cross objections/references. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed.”

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