What did the Tribunal hold?

The Tribunal held that the Revenue's appeal was not maintainable due to the low tax effect, as per CBDT Circular No. 21/2015. Consequently, the assessee's cross-objection, being supportive of the CIT(A)'s order, became infructuous.

The Revenue filed an appeal against the CIT(A)'s order deleting an addition of Rs. 29,84,000/-. The assessee filed a cross-objection. The tax effect in the Revenue's appeal was less than Rs. 10,00,000/-.

What were the issues?

Whether the Revenue's appeal is maintainable before the Tribunal when the tax effect is below the prescribed monetary limit. The issue of accommodation entries and cross-examination was not adjudicated due to the procedural dismissal.

ITO vs M/S. Laxman Industrial Resources… | ITAT Delhi 2016

Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI

Before: SHRI H.S. SIDHU & SHRI J.S. REDDY

For Appellant: Dr. Rakesh Gupta, & Somil Aggarwal, Advs

For Respondent: DR Assessee by : Dr. Rakesh Gupta, & Somil Aggarwal, Advs

Date of Hearing : 12-05-2016 Date of Order : 12-05-2016

ORDER PER H.S. SIDHU, J.M. The Department has filed this Appeal and Assessee has filed the Cross

Objection which is emanate from the Order dated 21.08.2013 of Ld. CIT(A)-VIII, New Delhi pertaining to assessment year 2004-05.

The Revenue has raised the following grounds in its appeal which reads

as under:-

“1. The order of the Ld. CIT(A) was erred in deleting the addition of Rs. 29,84,000/- made on account of accommodation entries by the AO.

2. In the facts and circumstances of the case, the Ld. CIT(A) was erred in deleting the addition by observing that no opportunity of cross examination was allowed to the assessee by ignoring the facts brought on record by the AO that cross examination was not possible particularly when the assessee did not provide the correct address of the parties to whom alleged sale of share was made.

That the order of CIT(A) is erroneous and is not tenable on facts and in law.

4. That the grounds of appeal

are without prejudice to each other.

5. The appellant craves leave to add, to alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.

3. We find that Revenue in the Grounds of Appeal before the Tribunal has challenged the deletion of addition of Rs. 29,84,000/- vide ground no. 1, as aforesaid.

From the above, we find that the tax effect in the Revenue’s Appeal is less than Rs.10,00,000/-, therefore, the Department’s Appeal 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 (in S No Appeals in Income-tax matters 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.

10.

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.” 5. 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, 6. 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.

Accordingly, the Revenue’s Appeal is dismissed.

ASSESSEE’S CROSS OBJECTION 7. As far as Assessee’s Cross Objection is concerned, the same is only supportive the Ld. CIT(A)’s order. Since we have dismissed the Appeal of the Revenue as aforesaid, hence, the Cross Objection filed by the Assessee has become infructuous and dismissed as such.

In the result, the Revenue’s Appeal as well as Assessee’s Cross Objection stand dismissed.

Order pronounced in the Open Court on 12/05/2016.

ITO, NEW DELHI vs. M/S. LAXMAN INDUSTRIAL RESOURCES LTD., DELHI

What did the Tribunal hold?

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