What did the Tribunal hold?

The Tribunal held that the tax effect of the appeal was below the threshold limit of Rs. 10 lakhs prescribed by CBDT Circular No. 21/2015. This circular mandates that appeals with such a tax effect should not be filed and can be withdrawn if pending.

The Revenue filed an appeal before the ITAT concerning additions made to the assessee's income. The disputed amount was initially Rs. 46,17,528, but after considering depreciation, it reduced to Rs. 21,00,521. The tax effect was Rs. 6,47,870.

What were the issues?

Whether the appeal filed by the Revenue is maintainable before the Tribunal given the tax effect is below the prescribed monetary limit as per CBDT circular.

DCIT vs Toyo Engineering Inida Ltd | ITAT Mumbai 2016

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

For Appellant: Shri. Nikhil Tiwan, AR

For Respondent: Shri. Nikhil Tiwan, AR

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SRI MAHAVIR SINGH, JM AND SRI ASHWANI TANEJA, AM (A.Y:2009-10) Dy. Commissioner of Income Tax M/s Toyo Engineering India 10(3),Mumbai. Ltd. Toyo House, CTS No.116, Lal Vs. Bahadur Shastri Marg, Kanjur Marg (W), Mumbai-400052 PAN No.AAACT1772H Appellant .. Respondent .. Shri. Vishwas Mundhe, DR Revenue by Assessee by .. Shri. Nikhil Tiwan, AR Date of hearing .. 08-12-2016 Date of pronouncement .. 08-12-2016 O R D E R PER MAHAVIR SINGH, JM:

This appeal by the assessee is arising out of the order of CIT (A)-22, Mumbai in appeal No. CIT (A)-22/Addl.CIT-10(3)/IT-346/2012-13 dated 16-07-2014. The Assessment was framed by ACIT Circle-10(3), Mumbai for the A.Y. 2009-10 vide order dated 23-02-2013 u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).

At the outset, the learned Counsel for the assessee stated that only disputed amount in this appeal of the Revenue is amounting to Rs.21,00,521/- on which tax effect is Rs.6,47,870/-. When it was pointed out that in the grounds of appeal

raised by the Revenue, the amount in dispute is Rs.46,17,528/-. It was clarified by the learned counsel that after allowing claim of depreciation disputed amount will be 21,00,521/-. The learned Counsel for the assessee drew our attention that the order of CIT(A) at page No.

14. Para 6, wherein, CIT(A) has dealt with ground No.5, wherein, the amount of Rs.18,72,856/- towards purchase of software license that includes payment for license of software i.e. SQL LIMS from web site of SQL paid Rs.12,61,906/-. Similarly, a LAN version of Pipenet Module software was acquired from Sunrise Systems Ltd. for Rs.6,10,950/- is under dispute. The CIT(A) confirmed these two additions and no relief is given on this out of the total software purchase of Rs.46,17,528/-. In view of the above the learned Counsel for the assessee stated that in this case tax effect is below the limit prescribed by CBDT circular, wherein prescribed tax effect is mentioned at Rs.10 lacs for filing of appeal before Tribunal. During the course of hearing before us, the learned Counsel for Rs.6,47,870/- and thus, the tax effect in this appeal is below Rs.10.00 lacs. The learned Counsel for the assessee further submitted that in view of the CBDT Circular No.21/2015, dated 10.12.2015 brought out by the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, the appeal was not maintainable and be dismissed. The learned Sr. DR also agreed to the facts stated by the learned Counsel for the assessee but could not point out whether this case falls under any of the exception provided in the Circular.

We have heard the rival submissions and perused the material on record. We find from the records before us that the tax involved in the disputed issue is below Rs.10 lacs and therefore, in view of the circular No. 21/2015 dated 10th December, 2015 no appeal should be filed by the Revenue before the Tribunal which has tax effect of Rs. 10.00 lacs or less and this circular is also applicable retrospectively to all pending appeals. The relevant extract the said CBDT Circular (Supra) is as under: - “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.”

Considering the above, the appeal filed by the Revenue, is therefore, dismissed.

In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 08-12-2016.

DCIT 10(3), MUMBAI vs. TOYO ENGINEERING INIDA LTD, MUMBAI

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