DCIT 1(3)(2), MUMBAI vs. THE WODEHOUSE GYMKHANA LTD, MUMBAI

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ITA 433/MUM/2015Status: DisposedITAT Mumbai02 August 2016AY 2010-113 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 dismissed the appeal in limine. It was acknowledged that the tax effect was below the threshold specified in the CBDT circular, and the issue did not fall under any exceptions.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order allowing the carry forward of losses claimed by the assessee. The assessee argued that the tax effect was below Rs. 10,00,000, making the appeal not maintainable as per CBDT Circular No. 21 of 2015.

What were the issues?

Whether the Revenue's appeal is maintainable given the low tax effect as per CBDT circular, and whether losses can be carried forward by an organization governed by the principle of mutuality.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G”, BENCH MUMBAI

Before: SHRI RAJENDRA, AM & SHRI RAM LAL NEGI, JM

For Respondent: Shri. Jeevraj P. Jain, Shri. Vivek Perampurna
Hearing: 02/08/2016Pronounced: 02/08/2016

आदेश / O R D E R

PER RAM LAL NEGI, JM

1.

This appeal has been filed by the revenue against order dated 28/10/2014 passed by the Ld. CIT (Appeals)-2, Mumbai for the assessment year 2010-11.

2.

The revenue has challenged the impugned order on the following effective grounds:-.

(i) “Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing carry forward of losses claimed by assessee ignoring the fact that under the principle of mutuality followed by the assessee for claiming receipts exempt from tax there can be no income chargeable to tax and consequently no loss assessable which can legally be allowed to be carried forward ?’

(ii)” Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) was justified in allowing carry forward of losses claimed by assessee ignoring the fact for an organization governed by mutuality there are no profits or losses but only receipts and payments and, any surplus of expenses over receipts is only a deficit and not “losses” which, if so claimed, would amount to an accounting camouflage only.”

3.

At the outset, the Ld. Counsel for the assessee submitted that the tax effect in this case is below Rs. 10,00,000/- Hence, as per the CBDT Circular No. 21 of 2015, dated 10/12/2015, the present appeal is not maintainable.

4.

The Ld. DR fairly admitted that the tax effect in department’s appeal is below Rs. 10 Lakhs, We find that the issue raised in appeal does not fall under any of the exceptions specified in para 8 of the Circular. Since, it has been specifically clarified in the Circular aforesaid that the instruction will apply retrospectively to all the pending appeals; the present appeal filed by the revenue is not maintainable. We, therefore, dismiss the same in limine.

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