DCIT, CC-1(4), KOLKATA, KOLKATA vs. M/S APARNA DISTRIBUTORS PVT. LTD., KOLKATA

This appeal is preferred by the Revenue against the order of ld. Commissioner of Income Tax (Appeals)-4, Kolkata dated 23.09.2015 for the assessment year 2008-09 on the following grounds:- (1) The ld. CIT(A) erred in law as well as on facts in restricting disallowance of expenditure under the head “Direct Distribution Charges”, as the A.O. has added disallowance on the basis of discrepancies which the assessee could not substantiate and the ld. CIT(A) also did not raise any question in the appeal but restricted the disallowance to 10% of total expenditure without any basis.

(2) The ld. CIT(A) erred in law as well as on facts when he directed the AO to restrict the disallowance of ‘sales incentive’ even when the assessee could only provide evidence in the form of self made credit notes and ledger copies without any evidence that ./2015 Assessment year: 2008-2009 Page 2 of 3 such incentives were offered to the parties concerned or by way of confirmation from the parties, when attempt to gather response from those parties by way of notices u/s 133(6), failed.

In view of the above, the 2nd appeal against the appeal order vide No. 193/CIT(A)-4/Ward- 12(3)/KOL/14-15 for the assessment year 2008-09 is suggested. Moreover, the tax effect is also more than the prescribe limit of Rs. 4 lakh for filing appeal before the ITAT as per Board’s Instruction No. 5/2014 dated 09.02.2011.

2 As pointed out by the ld. counsel for the assessee at the outset, the tax effect involved in this appeal of the Revenue is less than the revised monetary limit recently fixed by the CBDT vide Circular No. 21/2015 dated 10th December, 2015 at Rs.10,00,000/- for filing the appeal by the Revenue before the Tribunal and this position clearly evident from the grounds raised by the Revenue in this appeal is not disputed even by the ld. D.R. In Circular No. 21/2015 (supra) recently issued by the CBDT, the monetary limit for filing the appeal by the Revenue before the Tribunal has been increased to Rs.10,00,000/- and as clarified in the said Circular, the said monetary limit is applicable retrospectively even to the appeals pending before the Tribunal. The CBDT has also instructed that such pending appeals below this specified tax limit of Rs.10,00,000/- may be withdrawn/ not pressed. Keeping in view the instruction given by the CBDT vide Circular No. 21/2015 dated 10.12.2015, which is squarely applicable in the present case, the appeal filed by the Revenue in this case is treated as withdrawn/not pressed and dismissed accordingly.