What did the Tribunal hold?

The Tribunal noted that the tax effect was indeed below Rs. 10 Lakhs and did not fall under any exceptions in the CBDT circular. Therefore, the appeal was dismissed as not maintainable.

The Revenue appealed against an order of the CIT(Appeals) that deleted an addition of Rs. 17,06,047/- made by the AO on account of bogus labour charges. 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?

The primary issue was the maintainability of the revenue's appeal before the ITAT due to a low tax effect, as per CBDT Circular No. 21 of 2015.

ACIT vs Bhakti Impex | ITAT Mumbai 2016

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

Before: SHRI B.R.BASKARAN (AM) & SHRI RAM LAL NEGI (JM)

For Appellant: Shri. Akhilendra Pratap Yadav

For Respondent: Shri. Ashok J. Patil

Hearing: 20/06/2016Pronounced: 20/06/2016

This appeal has been filed by the revenue against order dated 13/09/2013 passed by the Ld CIT(Appeals)-27, Mumbai for the assessment year 2007-08.

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

1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the A.O. of Rs.17,06,047/- in respect of Bogus labour charges without appreciating the facts of the case?

2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A), Mumbai erred in relaying on the decision of the Ld. CIT(A), Valsad wherein the income of the bogus bill provider Shri. Atul Nandlal Daftary, Prop.of Meghbir Corporation was estimated at Gross Profit at 3% which was not accepted by Department and appeal had been filed before Hon. ITAT which is pending for adjudication.

3. The Ld. CIT failed to appreciate that appeal order of the assessee for A.Y. 2006-07 has not been accepted by department and appeal is filed against the same before Hon. ITAT, Mumbai.

At the outset, the Ld. Counsel for the assessee submitted that the tax effect in this case is below Rs.10,00,000/- as the total addition made by the AO in respect of bogus labour charges is Rs. 17,06,047/-. Hence, as per the CBDT Circular No. 21 of 2015, dated 10/12/2015, the present appeal is not maintainable.

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.

Order pronounced in the open court on 20th June, 2016

ASST CIT 16(3), MUMBAI vs. BHAKTI IMPEX, MUMBAI

What did the Tribunal hold?

What were the facts?

What were the issues?

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