ITO, NEW DELHI vs. SHRI ROHIT JAIN, NEW DELHI

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ITA 39/DEL/2015Status: DisposedITAT Delhi25 July 2016AY 2010-112 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 dismissed the Revenue's appeal based on a CBDT circular revising the monetary limit for appeals to the ITAT. The tax effect of the appeal was below the revised limit, making it not maintainable.

What were the facts?

The Revenue appealed against the CIT(A)'s order which held that payments made by the assessee to clients were discounts and not brokerage/commission liable for TDS. The Revenue argued these discounts were effectively commission and thus disallowable under Section 40(a)(ia).

What were the issues?

Whether payments to clients were in the nature of brokerage/commission subject to TDS, and if the appeal was maintainable given the revised monetary limits set by CBDT.

Which sections of the Income-tax Act were involved?

Section 194H,Section 40(a)(ia),Section 268A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC-3’ NEW DELHI

Before: SMT DIVA SINGH

Hearing: 04.07.2016Pronounced: 25.07.2016

Date of Hearing 04.07.2016 Date of Pronouncement 25.07.2016 ORDER The present appeal has been filed by the Revenue assailing the correctness of the order dated 17.10.2014 of CIT(A)-XXIII, New Delhi pertaining to 2010-11 assessment year on the following ground: – 1. “On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in holding that no payment in the nature of brokerage/commission liable to Tax Deduction at Source u/s 194H of the Act and hence not hit by the provisions of section 40(a)(ia) of the Act, has been made by the assessee to his clients who had booked flats in various projects through him and only discounts were offered to the clients whereas the assessee admittedly stated in his letter dt. 23.01.2013 that they have deducted TDS on the payments which have been shown as “discount” in the next assessment year."

2. It was a common stand of the parties before the Bench that by way of the present appeal the challenge is posed to the addition of Rs.23,18,228/- by the Revenue and in view of Circular No.21/2015 dated 10th December, 2015 of CBDT the tax effect being less than Rs.10 lakh the appeal is not maintainable.

3.

Having heard the submissions of the parties on this issue and perused the material on record, I find that the CBDT vide the aforesaid Circular dated 10.12.2015 has revised the monetary limit to Rs.10 lakh for filing the appeal by I.T.A .No.-39/Del/2015 the department before Income Tax Appellate Tribunal. Para 3 of the aforesaid Circular fixing the monetary limit has been made applicable vide para 10 retrospectively. Considering the settled legal precedent that the Board’s instructions or directions issued to the Income Tax Authorities u/s 268A of the Income Tax Act, 1961 are binding on the authorities, the departmental appeal is dismissed.

4.

In the result, the appeal of the Revenue is dismissed. The order is pronounced in the open court on 25th July, 2016.

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