ITO 8(3)(4), MUMBAI vs. VIRAL CHEMICALS P. LTD, MUMBAI

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ITA 5854/MUM/2011Status: DisposedITAT Mumbai22 January 2016AY 2000-013 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 held that the tax effect of the disputed amount was below the monetary limit prescribed by the CBDT for filing appeals before the ITAT. Therefore, the appeal filed by the Revenue was not maintainable.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of a disallowance of Rs. 11,73,760/-. The assessee and its group concerns had consistently shown trading losses over several assessment years.

What were the issues?

The primary issue was the maintainability of the Revenue's appeal before the ITAT due to the low tax effect of the disputed amount, as per CBDT guidelines.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

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

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

For Appellant: Shri. Chandip Singh
For Respondent: Shri. Jayant R. Bhatt
Hearing: 15/10/2015Pronounced: 22/01/2016

The aforesaid appeal has been filed by the Revenue against impugned order dated 25/05/2011 passed by the CIT(A)-18, Mumbai in respect of the order of assessment passed u/s 143(3) for the assessment year 2000-01, on the following grounds:-

1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of Rs. 11,73,760/- shown by the assessee without appreciating the fact that the assessee and all its various group concerns and companies have shown such trading losses year after year since A.Yr. 2000-01 till A.Yr. 2006-07, which are nothing but mere non-genuine paper transactions shown to reduce their tax liability on incomes from other heads.

2. “On the facts and in the circumstances of the case and in law, the Hon’ble Income Tax Appellate Tribunal being the final fact finding authority may exercise its discretion and call for the assessment records of the assessee and all its group concerns and companies since AYr. 2000-01 and examine the quantum of trading loss shown by each of them in various years and determine the nature of such losses, which no prudent businessman would incur year after year.

The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the ITO/ACIT/DCIT be restored.

3.

The appellant craves leave to amend or alter any ground or add a new ground that may be necessary.

2.

At the outset, it is noticed that, the disputed issue is only for Rs. 11,73,760/- and the tax effect on this amount is below the specified monetary limit of Rs. 10 lakhs. As per the latest CBDT Circular No. 21 of 2015, dated 10th December, 2015, new guidelines of monetary limit for filing of appeals by the Department has been issued, whereby the tax effect for filing of appeal before the ITAT has been prescribed at Rs. 10 lakhs. In the said Circular, it has been specifically clarified that the said instruction will apply retrospectively to all the pending appeals. Accordingly, the appeal filed by the revenue is not maintainable and is dismissed in limine.

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