ITO, MUZAFFARNAGAR vs. NIDHI BANSAL, MUZAFFARNAGAR

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ITA 3278/DEL/2011Status: DisposedITAT Delhi22 March 2016AY 2005-062 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 Revenue's appeal, noting that the tax effect was below the Rs. 10 lakh limit for filing appeals before the ITAT as per the binding CBDT Circular No. 21/2015. The circular's retrospective application was also considered.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting disallowances related to interest on loans, car expenses, and capital gains. The appeal was filed despite the tax effect being less than the revised monetary limit set by CBDT circular.

What were the issues?

Whether the departmental appeal is maintainable before the ITAT given the tax effect and the applicability of CBDT Circular No. 21/2015. The underlying issues of disallowances on interest, car expenses, and capital gains were not adjudicated on merits.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii),Section 50C,Section 268A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI

Before: SMT DIVA SINGH & SH.O.P.KANT

Hearing: 08.03.2016Pronounced: 22.03.2016

Date of Hearing 08.03.2016 Date of Pronouncement 22.03.2016 ORDER

PER DIVA SINGH, JM

1.

The present appeal has been filed by the revenue assailing the correctness of the order dated 31.03.2011 of CIT(A), Muzaffarnagar pertaining to 2005 –06 assessment year on the following grounds:

– 1. “On the facts and in the circumstances of the case, the CIT(A)has erred in deleting the disallowance of Rs.78,851/- made by the Assessing Officer under section 36(1)(iii) on account of payment of interest on loan as the assessee is not engaged in any business activity.

2. On the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the disallowance of Rs.11,168/- made by the Assessing Officer on account of car running expenses & repairs as the assessee is not engaged in any business activity.

3. On the facts and in the circumstances of the case, the CIT(A) has erred in law by ignoring the provisions of section 50C of the I.T.Act, 1961 and accepting the valuation report as submitted by the assessee and consequently allowed the relief of Rs.13,16,718/- on account of long term capital gain.

4. On the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the long term capital gain of Rs.4,33,310/-

I.T.A .No.-3278/Del/2011 by considering the land as agricultural land, misinterpreting the words mentioned in Khatuani of the land under consideration. 5. That order of the CIT(A) be set aside and that of A.O. be restored.”

2.

Considering the amount at stake for the Revenue, both the parties were required to address Circular No.21/2015 dated 10th December, 2015 of CBDT. Considering the same in the facts on record, the Ld. Sr. DR fairly conceded that the departmental appeal has been filed wherein the tax effect involved is much less than Rs.10 lakh.

3.

We have heard the submissions of the parties on this issue and perused the material on record. We find that the CBDT vide the aforesaid Circular dated 10.12.2015 has revised the monetary limit to Rs.10 lakh for filing the appeal by the department before Income Tax Appellate Tribunal. Para 3 of the aforesaid Circular has been made applicable vide para 10 retrospectively. Considering the settled legal precedent that the Board’s instructions or directions issued to the Income Tax Authorities u/s 268A of the Income Tax Act, 1961 are binding on the authorities, we dismiss the departmental appeal considering the material available on record. 4. In the result, the appeal of the Revenue is dismissed. The order is pronounced in the open court on 22nd March, 2016.

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