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Facts
The Revenue filed an appeal against an order of the CIT(A) concerning assessment year 2014-15. The appeal was related to the deletion of an addition of Rs. 1,67,85,221/- made on account of bad debts.
Held
The Tribunal held that the tax effect involved in the appeal was below the threshold limit prescribed by the CBDT for filing appeals. The Ld. Departmental Representative could not controvert the tax computation presented by the assessee's counsel.
Key Issues
Whether the appeal filed by the Revenue was required to be filed following the CBDT Circular due to low tax effect.
Sections Cited
36(2) of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
This appeal by the Revenue is directed against order dated 11.07.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, New Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2014-15, raising following grounds:
Jasvantlal Girdharlal Shah Jasvantlal Girdharlal Shah
"Whether, on the facts and in circumstance of the case and in law, 1. "Whether, on the facts and in circumstance of the case and in law, 1. "Whether, on the facts and in circumstance of the case and in law, the Ld. CIT (A) has erred in deleting the the Ld. CIT (A) has erred in deleting the addition of Rs. 1,67,85,221/ addition of Rs. 1,67,85,221/- on account of bad debts without appreciating the fact that the cost of on account of bad debts without appreciating the fact that the cost of on account of bad debts without appreciating the fact that the cost of stock not received cannot be treated as bad debts in view of the fact stock not received cannot be treated as bad debts in view of the fact stock not received cannot be treated as bad debts in view of the fact that the matter is still under investigation by Economic Offences Wing. that the matter is still under investigation by Economic Offences Wing. that the matter is still under investigation by Economic Offences Wing. " 2. "Whether, on the facts and in circumstance of the case and in law, , on the facts and in circumstance of the case and in law, , on the facts and in circumstance of the case and in law, the Ld. CIT (A) has failed to consider the fact that the bad debts the Ld. CIT (A) has failed to consider the fact that the bad debts the Ld. CIT (A) has failed to consider the fact that the bad debts written off were not offered to tax either in the year under written off were not offered to tax either in the year under written off were not offered to tax either in the year under consideration or earlier years, and hence the conditions laid down in consideration or earlier years, and hence the conditions laid down in consideration or earlier years, and hence the conditions laid down in section 36(2) of the Income Tax Act, 1961 are not satisfied. section 36(2) of the Income Tax Act, 1961 are not satisfied.
At the outset, the Ld. counsel for the assessee submitted that At the outset, the Ld. counsel for the assessee submitted that At the outset, the Ld. counsel for the assessee submitted that tax effect involved in the appeal preferred by the Revenue is below tax effect involved in the appeal preferred by the Revenue is below tax effect involved in the appeal preferred by the Revenue is below the threshold limit of Rs.50,00,000/ the threshold limit of Rs.50,00,000/- prescribed by the Cent prescribed by the Central Board of Direct Taxes (CBDT) for filing appeal before the Income-tax Board of Direct Taxes (CBDT) for filing appeal before the Income Board of Direct Taxes (CBDT) for filing appeal before the Income Appellate Tribunal (ITAT) as specified in Appellate Tribunal (ITAT) as specified in (CBDT), Circular No. (CBDT), Circular No. 3/2018 dt. 20/08/2018 3/2018 dt. 20/08/2018
The Ld. Counsel Counsel has filed a detailed calculation of the tax has filed a detailed calculation of the tax payable computed by the Assessing Officer. We find that total tax payable computed by the Assessing Officer. We find that total tax payable computed by the Assessing Officer. We find that total tax payable on the assessed income by way of impugned assessment payable on the assessed income by way of impugned assessment payable on the assessed income by way of impugned assessment order is only Rs.49,13,305/ order is only Rs.49,13,305/- which also include the tax payable on which also include the tax payable on the returned income and therefore, evidently, the tax effect involved me and therefore, evidently, the tax effect involved me and therefore, evidently, the tax effect involved in the issue in dispute is below the threshold limit of in the issue in dispute is below the threshold limit of in the issue in dispute is below the threshold limit of Rs.50,00,000/- prescribed by the Circular No prescribed by the Circular No. 3/2018 3/2018 for filing appeal before the Tribunal. appeal before the Tribunal.
The Ld. Departmental Representative (DR) also could The Ld. Departmental Representative (DR) also could The Ld. Departmental Representative (DR) also could not controvert the tax computation presented by the Ld. counsel for the controvert the tax computation presented by the Ld. counsel for the controvert the tax computation presented by the Ld. counsel for the assessee. In the circumstances, assessee. In the circumstances, we are of the opinion that this e are of the opinion that this Jasvantlal Girdharlal Shah Jasvantlal Girdharlal Shah appeal filed by the Revenue appeal filed by the Revenue was not required to be filed following not required to be filed following the CBDT Circular and therefore, same is dismissed as infructuous. the CBDT Circular and therefore, same is dismissed a the CBDT Circular and therefore, same is dismissed a
In the result, the appeal of the Revenue is dismissed. In the result, the appeal of the Revenue is dismissed. In the result, the appeal of the Revenue is dismissed.