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Income Tax Appellate Tribunal, BENCH – “C”, AHMEDABAD
Before: SHRI MAHAVIR PRASAD & SHRI AMARJIT SINGH
आदेश/O R D E R
PER MAHAVIR PRASAD, JUDICIAL MEMBER:
This appeal has been preferred by the Revenue against order of the Pr.CIT-1, Vadodara dated 12.03.2015.
Revenue has raised the following grounds in the appeal: “1. On the facts and in the circumstances of the case and in law, the id.CIT (Appeals) erred in deleting the disallowance/addition of Rs. 15,24,182/- made by the AO, out of repairs to Plant and Machinery without appreciating the fact that the same was having enduring benefit to the assessee, and therefore, Assessing Officer rightly treated it as capital expenditure. 2. On the facts and in the circumstances of the case and in law, the ,Ld.CIT (Appeals) erred in deleting the disallowance of Rs. 6,94,990/-being 10% of
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Environment Expenses, by not appreciating the fact that there was abnormal/unrealistic increase in the expenses when the turnover almost remained static, and therefore, assessing officer is justified disallowing 10% of the same accordingly. 3. On the facts and in the circumstances of the case and in law, the Ld.CIT (Appeals) erred in directing the AO to consider only expenditure while calculating the disallowance of Rs. 30,51,474/- u/s 14A of the Act without appreciating the fact that the assessee itself agreed for disallowance before the AO, and the alternative stance of the assessee has no locus standi. 4. The appellant craves leave to add-to, amend or alter the above grounds as may be deemed necessary.”
At the outset, the ld.counsel for the assessee submitted a note stating that the AO has confirmed addition u/s.14A of Rs.30,51,474/- at the time of giving effect to the ld.CIT(A)’s order dated 13.2.2015, and accordingly no relief is granted to the assessee company on addition made by the AO u/s.14A. Thus the appeal filed by the Revenue for the A.Y.2010-11 is only on first two grounds and is below tax effect. It is further submitted that the assessee-company has not filed further appeal against the addition u/s.14A of the Act. The ld.counsel for the assessee further submitted that tax effect on the impugned additions contested by the Revenue before the Tribunal is below Rs.10 lakhs, and therefore, in view of recent CBDT Instruction no.21 of 2015 dated 10.12.2015 restricting filing of the appeal where tax effect is below Rs.10 lakhs, appeal of the Revenue is not maintainable and liable to be dismissed in limine. In this behalf, the ld.counsel for the assessee filed a working to show that tax effect is below Rs.10.00 lakhs. It reads as under:
Sr. Amount of addition made on Amount Remarks No. which department has filed (Rs.) appeal 1. Plant & Machinery repair 15,24,182 Allowed by expenses CIT(A) in
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favour of the assessee. 2. Environment expenses 6,94,990 Allowed by CIT(A) in favour of assessee 3. Disallowance u/s.4A 30,51,474 Addition confirmed by CIT(A) Total (1+2) 22,19,172 Tax rate 30% Tax effect 6,65,752 Less than Rs.10,00,000
Even if surcharge is added, it is below Rs.10 lakhs. Section 14A – there is no difference after CIT(A)’s order.
When the Bench confronted the ld.DR with the above submissions of the assessee, the ld.DR was unable to contest the same, rather, ld.DR submitted that issue is left to the Tribunal to decide the same in accordance with law.
We have heard both the parties and gone through the record. We find that appeal of the Revenue was filed on 13.3.2015. CBDT has issued instruction no.21 of 2015 dated 10.12.2015 whereby the Board has prohibited its subordinate authorities from filing of the appeal before the Tribunal against the order of the CIT(A) where the tax effect by virtue of the relief given by the CIT(A) is less than Rs.10 lakhs. The instructions have been made applicable with retrospective effect, meaning thereby, these instructions are applicable on pending appeals also. In the present case, tax effect as per the calculation sheets reproduced above, on the addition deleted by the ld.CIT(A) and contested by the Revenue, would be less than Rs.10 lakhs.
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Therefore, the present appeal deserves to be dismissed being treated to be filed in violation of the above CBDT Instruction. It is dismissed in limine.
It is further observed that in case on re-verification at the end of the AO, it came to the notice that tax effect is more or it falls within the ambit of exception provided in the Instruction, then the Department will be at liberty to approach the Tribunal for recall of this order and revive its appeal for fresh hearing. Such application should be filed within limitation prescribed under the law.
In the result, the appeal of the Revenue is dismissed due to low tax.
Order pronounced in the Court on 9th November, 2017 at Ahmedabad.
Sd/- Sd/- (AMARJIT SINGH) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 09/11/2017