ITO, NEW DELHI vs. M/S NU LOOK FINANCE & LEASING LTD., DELHI

1. “Whether in law and on the facts of the case the Ld. CIT(A) erred in deleting the addition of Rs. 13,89,950/- made by the AO u/s 68 of the Act ignoring the adverse evidence including pattern of transaction in the bank statements, the absence of real identity, credit worthiness, genuineness, the confessional statement given by the entry operator at the time of their assessment and collusive evasion of enquiries in to the source of deposits etc. as clearly and elaborately brought out in the assessment order.

During the course of hearing, the ld. D.R., although supported the order of the Assessing Officer, but could not controvert the fact that tax effect involved in this appeal is less than Rs.10,00,000/-.

The CBDT in its Circular No. 21/2015 dated 10th December, 2015 has revised the monetary limit for filing of the departmental appeals to the ITAT at Rs. 10 lakhs which is evident from paragraph 3 of the Circular, which reads as under :-

Learned CIT-DR who appeared at the time of hearing before us stated that he needs some time to call for the report from the Assessing Officer as well as instructions from Administrative CIT for withdrawing this appeal because the appeal was filed with the approval of Administrative CIT. Learned CIT-DR further pointed out that in paragraph 7 of the said Circular, it has been clarified by the CBDT that withdrawal of this appeal by the Revenue on account of low tax effect should not be considered as a precedent in the subsequent year of the acceptance of issues involved in these appeals and, therefore, if in the subsequent year similar issue arises before the ITAT where the appeal is above the tax limit as prescribed in this Circular, the same should be decided on merits.

After considering the submissions of learned DR, the fact of the case and the Circular of the CBDT, we are of the opinion that there is no necessity for adjourning the appeal and calling the report from the Assessing Officer because apparently, the tax effect involved in this appeal of the Revenue is below Rs. 10 lakhs. However, we add here that if on receipt of order, the Assessing Officer finds that the tax effect is above Rs. 10 lakhs or, in any other manner, the Circular is not applicable, he will be at liberty to file a Miscellaneous Application. We also agree with the contention of the learned CIT-DR that this order would not be considered as an acceptance by the Revenue on the issue involved in these appeals and will not be an estoppel for the Revenue to take up the issue involved in these appeals before the ITAT on merits if the tax effect in those years is more than Rs. 10 lakhs. With this remark, we deem it proper to dismiss the appeals in the light of the Circular No. 21/2015 of CBDT dated 10th December, 2015.

In the result, the appeal of the Revenue stands dismissed.