ACIT, CHENNAI vs. G.BHARATHI, CHENNAI

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ITA 1938/CHNY/2015Status: DisposedITAT Chennai23 February 2017AY 2011-123 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 held that the appeal was not maintainable as the tax effect was below the revised monetary limit of Rs. 10 lakhs set by CBDT Circular No. 21/2015. This circular was applicable retrospectively.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order deleting a disallowance of commission payment. The Assessing Officer had disallowed a commission payment of Rs. 15,00,119/-.

What were the issues?

The primary issue was the maintainability of the Revenue's appeal before the ITAT due to the tax effect being below the prescribed monetary limit for filing appeals.

Which sections of the Income-tax Act were involved?

Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI D.S.SUNDER SINGH

Hearing: 23.01.2017

आदेश / O R D E R

PER D.S.SUNDER SINGH, ACCOUNTANT MEMBER:

1.

This is an appeal filed by the Revenue against an Order dated 17.06.2015 of Commissioner of Income Tax (Appeals)-9, Chennai, in for the AY 2011-12 on the following grounds: 1. The order of the learned CIT(A) is contrary to law and facts of the case. 2.1.The learned CIT(A) erred in deleting the disallowance of claim on commission payment for the Asst. Year 2011-12 of Rs.15,00,119/-.

ITA No.1938/Mds/2015 :-2-:

2.2. The learned CIT(A) ought to have appreciated the fact that the onus is upon the assessee to prove the necessity and genuineness of the transaction towards commission payable. 2.3. The learned CIT(A) ought to have appreciated the fact that as per second limb of Section 37 of the IT. Act, of incurring the expenditure for the purpose of business, have not been satisfactorily established by the assessee. 2.4. Having regard to the Hon’ble Punjab & Haryana High Court’s decision in the case of Raj kumar Wadhwa vs.CIT (2014) 42 taxmann.com 177, the learned CIT(A) ought to have upheld the action of the AO in making disallowance of commission payment u/s.37(1).

3.

For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored.

2.0 Ld.A.R. brought to the notice of the bench that the appeal is not maintainable since the tax effect is below Rs.10.00 lakhs. The Assessing Officer passed order u/s.143(3) on 25.03.2014 determining the total income at Rs.63,50,783/-, raising the demand of Rs.6,75,160/-.

On hearing from the Ld. Departmental Representative, we find that the tax effect in this appeal is less than Rs.10 lakhs. The CBDT in Circular No.21/2015 dated 10.12.2015 increased the monetary limit for filing appeal before this Tribunal from Rs.4 lakhs to Rs.10 lakhs. The CBDT further clarified that the Instruction dated 10.12.2015 will apply retrospectively to all the pending appeals before this Tribunal. The CBDT has also instructed its officers to withdraw the appeals pending before this Tribunal. In view of the above, this Tribunal is of the considered opinion that the Circular issued by the CBDT on 10.12.2015 is binding on the Department. Therefore, the appeal filed by the Revenue is not maintainable. Accordingly, the appeal of the Revenue is dismissed. :-3-: 3.0 In the result, the appeal of the Revenue is dismissed.

Order pronounced in the Open Court on 23rd February, 2017, at Chennai.

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