What did the Tribunal hold?

The Tribunal noted that the tax effect was below the prescribed monetary limit for filing appeals as per the CBDT circular. Therefore, the appeal was not maintainable on grounds of low tax effect.

The Revenue appealed the CIT(A)'s order which treated the assessee's income as Short Term Capital Gain instead of Business Income. The assessee argued that the appeal should be dismissed due to low tax effect as per CBDT Circular No. 21 of 2015.

What were the issues?

Whether the Revenue's appeal is maintainable before the Tribunal due to low tax effect as per CBDT circulars.

ACIT vs Neharaj Stock Brpkers P.Ltd | ITAT Mumbai 2016

Income Tax Appellate Tribunal, MUMBAI “B” BENCH, MUMBAI

Before: SHRI SHAILENDRA KUMAR YADAV, JUDICIAL & SHRI RAJESH KUMAR.

Hearing: 04.08.2016Pronounced: 08.08.2016

BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. (Assessment Year:2010-11) The ACIT, Circle-4(2), Mumbai-400 020 Appellant Vs. M/s. Neharaj Stock Brokers Pvt. Ltd., 51, Advent, 12A, Jagannath Bhosale Marg, Nariman Point, Mumbai-400 021 Respondent PAN: AABCN4279L अपीलाथ� की ओर से /By Appellant : Shri Shivaji B. Ghode, D.R. ��यथ� क� ओर से/By Respondent : Shri Naresh Kumar, A.R. सुनवाई क� तारीख/Date of Hearing : 04.08.2016 घोषणा क� तारीख/Date of Pronouncement : 08.08.2016 ORDER PER RAJESH KUMAR, A.M: This appeal has been filed by Revenue against the order of Commissioner of Income-Tax (Appeals)-8, Mumbai, dated 01.11.2013 for A.Y. 2010-11 on following ground: “1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in treating the assessee as investor instead of trader and thereby treating the A.Y. 10-11 [ACIT vs. M/s. Neharaj Stock Brokers Pvt. Ltd.] Page 2 income earned by the assessee of Rs.37,91,851 as Short Term Capital Gain instead of Business Income.”

Before us, at the outset, ld. Authorized Representative submitted that the present appeal of the Revenue needs to be dismissed on account of low tax effect in view of the CBDT Circular No.21 of 2015 dated 10.12.2015. The ld. Departmental Representative fairly admitted that the tax effect is less than the limit prescribed by the aforesaid CBDT Circular.

2.1 We have heard the rival submissions and perused the material on record. On perusing the ground of appeal raised by the Revenue, we prima-facie find that the tax effect in this appeal is below Rs.10 lacs. As per the announcement of Central Board of Direct Taxes (CBDT) dated 10.12.2015 (Circular No. 21 of 2015), no Department appeals are to be filed against relief given by ld. CIT(A) before the Income Tax Tribunal unless the tax effect, excluding interest exceeds Rs. 10 lacs and it further states that the instructions will apply retrospectively to the pending appeals. In the present case, since it is an undisputed fact that on the additions which are in dispute, the tax effect is less than Rs. 10 lacs and in the absence of any material on record by the Revenue to demonstrate that the issue in the present appeal is covered by exemptions specified in clause (8) of the aforesaid CBDT Circular, we are of the view that the monetary limit prescribed by the instructions of the aforesaid CBDT Circular would be applicable to the present appeal of the Department and A.Y. 10-11 [ACIT vs. M/s. Neharaj Stock Brokers Pvt. Ltd.] Page 3 therefore the present appeal is not maintainable on account of low tax effect. However, in case there is any error in the computation of the tax effect involved or if for any reason, the aforesaid CBDT Circular is not applicable, it would be open to the Revenue to seek revival of the appeal. In such circumstances, we dismiss the appeal of Revenue without expressing any opinion on merits of the case.

In the result, the appeal of Revenue is dismissed.

Pronounced in the open Court on this the 08th day of August, 2016.

ACIT CIR 4(2), MUMBAI vs. NEHARAJ STOCK BRPKERS P.LTD, MUMBAI

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