I.T.O. WARD -2(1), RAIPUR (CG) vs. M/S UNIQUE STRUCTURE & TOWER LTD, RAIPUR

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ITA 389/BIL/2014Status: DisposedITAT Raipur17 January 2018AY 2011-124 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that as per CBDT Circular No. 21/2015, appeals with a tax effect below Rs. 10 lakhs are not maintainable. Therefore, the appeal filed by the Revenue was dismissed in limine.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order deleting disallowances related to sales promotion expenses and additions for delayed deposit of employee contributions and outstanding service tax. The assessee pointed out that the tax effect of the appeal was below Rs. 10 lakhs.

What were the issues?

The primary issue was whether the Revenue's appeal was maintainable given the tax effect was below the monetary limit prescribed by CBDT circulars for filing appeals before the ITAT.

Which sections of the Income-tax Act were involved?

Section 37(1),Section 2(24)(x),Section 36(1)(va),Section 43B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

For Appellant: Shri Nikhilesh Begani, AR
For Respondent: DR Assessee by :, Shri Nikhilesh Begani, AR
Hearing: 17/01/2018Pronounced: 18/01/2018

Per Shri N.S.Saini, AM: This is an appeal filed by the Revenue against the order of the CIT(A), Raipur, dated 31.10.2014 for the assessment year 2011-2012. 2. The Revenue has taken the following grounds of appeal :-

1.

"Whether in law and on facts and circumstances of the case, the learned CIT(A) has erred in deleting the disallowance of Rs. 2,66,671/- made by the AO on accounts of sale promotion expenses which was found not allowable u/s 37(1) of the IT Act, 1961?"

2.

"Whether in law and on facts & circumstances of the case, the learned CIT(A) has erred in deleting the disallowance of Rs.1,35,000/- made by the AO on accounts of sale promotion expenses which was found not allowable u/s 37(1) of the IT Act, 1961?"

3.

"Whether in law and on facts & circumstances of the case, the learned CIT(A) has erred in deleting the disallowance of Rs. 45,000/- made by the AO on accounts of sale promotion expenses which was found not allowable u/s 37(1) of the IT Act, 1961?"

4.

"Whether in law and on facts & circumstances of the case, the learned CIT(A) has erred in deleting the disallowance of Rs. 73,192/- made by the AO on account of sale promotion expenses which was found not allowable u/s 37(1) of the IT Act, 1961?"

5.

"Whether in law and on facts & circumstances of the case, the learned CIT(A) has erred in deleting the addition of deemed income u/s 2(24)(x) read with section 36(1)(va) of Rs. 6,31,533/-made by the AO as the employees contribution to EPF & ESIC were not deposited before the due date?"

2

6.

" Whether in law and on facts & circumstances of the case, the learned CIT (A) has erred in deleting the addition u/s 43B of Rs. 16,21,709/- made by the AO as the service tax remained outstanding?"

7.

"The Order of the Ld. CIT(A) is erroneous both in law and on facts?"

3.

At the time of hearing the AR of the assessee filed a computation

showing that the tax effect in the present appeal filed by the Revenue is below Rs.10 lakhs. The computation is as under :-

CALCULATION OF TAX EFFECT s. Particulars Amount (In Rs.) No. 1 Assessed Total Income 3,29,62,366/- Tax on Above 98,88,708/- Surcharge@7.50% 7,41,653/- Education Cess® 3% 3,18,911/- Total Tax on Assessed Income (A) 1,09,49,272/- Additions made on various grounds contested before the Hon'ble ITAT Raipur Bench (Disputed Additions) : a} Disallowance out of Sales 27,73,105/- 2,66,671 Promotion Expenses b) Disallowance out of Bales 1,35,000 Promotion Expenses c) Disallowance out of Sales 45,000 Promotion Expenses d) Disallowance out of Sales 73,192 Promotion Expenses e) Addition for delayed deposit of 6,31,533 employees contribution to EPF & ESSC f) Disallowance u/s.43B on account of 16,21,709 Service Tax 2 Assessed Total Income reduced by the amount of Disputed 3,01,89,261/- Addition {Rs.3,29,62,366 (-) Rs.27,73,105) Tax on Above 90,56,778/- Surcharge@7.50% 6,79,258/- Education Cess @ 3% 2,92,081/- Tax on Assessed Total Income reduced by the 1,00,28,117/- Disputed Addition (B) TAX EFFECT ON ABOVE (A - B) 9,21,155/-

3 He submitted that in view of the CBDT Circular No.21/2015, dated 10th December, 2015, appeal filed by the Revenue is not maintainable and, hence, liable to be dismissed.

4.

On the other hand, ld.DR for the Revenue has not controverted the submissions of ld.AR of the assessee that tax effect in the present appeal of the Revenue was below Rs.10 lakhs. We find that the CBDT in Circular No.21/2015, dated 10th

5.

December, 2015, has stated that, as a measure for reducing litigation, it was increasing the monetary limits for filing of appeals by the department before the ITAT and High Courts and SLP before the Supreme Court. The said limit for not filing appeal to the Tribunal was fixed at Rs.10 lakhs. The CBDT has further stated that the said instruction shall apply retrospectively to pending appeals and that all appeals below the specified tax limits should be withdrawn/not pressed. However, appeals before the Supreme Court are to be governed by the limits operative at the time that the appeal was filed. The said Circular of the CBDT is binding on the officers of Income Tax Department. In view of this, we hold that the present appeal of the Revenue before the Tribunal is not maintainable and, hence, we dismiss the same in limine.

6.

In the result, appeal filed by the Revenue is dismissed. Order pronounced in the Court on Thursday, the 18th Day of January, 2018 at Raipur. (PAVAN KUMAR GADALE) (N. S. SAINI) न्याययक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER Raipur; ददन ांक Dated 18/01/2018 प्र.कु.मि/PKM, Senior Private Secretary

4 आदेश की प्रयिलऱपि अग्रेपिि/Copy of the Order forwarded to : अऩीऱ थी / The Appellant- 1. प्रत्यथी / The Respondent- 2. आयकर आयुक्त(अऩीऱ) / The CIT(A), 3. आयकर आयुक्त / CIT 4. विभ गीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, Raipur / DR, ITAT, Raipur 5. ग र्ड प ईऱ / Guard file. 6. आदेशानुसार/ BY ORDER, सत्य वऩत प्रतत //// (Senior Private Secretary) Income Tax Appellate Tribunal, Raipur

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