DCIT CIRCLE 12 (1) vs. GENERAL SALES LTD,

On the facts and in the circumstance of the case and in law, the CIT(A) erred in deleting the addition of Rs. 619947/- out of the gal expenses, ignoring the fact that these were capital in nature as these expenses were incurred by the assessee with a view to preserve the existing business structure of the company.

On the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 3304500/- on account of disallowance made under section 14A of the Income Tax Act, 1961. 3. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of the hearing.

We have heard both the parties and perused the material on record. At the threshold, we find that the tax effect in the Revenue Appeal is less than Rs.10,00,000/-, therefore, the Department’s Appeals is not maintainable, in view of the Circular No. 21/2015 dated 10th December, 2015 issued vide F.No. 279/Misc. 142/2007-ITJ (Pt.) by the CBDT. For the sake of convenience, the relevant para nos. 3 & 10 of the aforesaid CBDT’s Circular are reproduced as under:- “3. Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: Monetary Limit S No Appeals in Income-tax matters (in Rs) 1 Before Appellate Tribunal 10,00,000/- 2 Before High Court 20,00,000/- 3 Before Supreme Court 25,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case.

This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/ Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/ not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed.”

It is not in dispute that the Board’s instruction or directions issued to the income-tax authorities are binding on those authorities, therefore, the Department should have withdrawn/ not pressed the present Appeal, in view of the aforesaid instructions since the tax effect in the instant Appeal is less than the amount of Rs. 10 lacs, prescribed in the above said CBDT’s Instructions.

Keeping in view the CBDT Instruction No. 21/2015 dated 10th December, 2015, we are of the view that the Revenue should have withdrawn/ not pressed the instant appeal before the Tribunal. We are also of the view that the said Instructions are applicable for the pending appeals and appeals to be filed henceforth in Tribunal. 6. In the result, the Appeal filed by the Revenue stand dismissed.