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Income Tax Appellate Tribunal, MUMBAI BENCHES “F”, MUMBAI
Before: Shri Sanjay Garg, & Shri Ashwani Taneja
आदेश / O R D E R Per Ashwani Taneja (Accountant Member):
The present appeal has been filed by the Revenue against the order of Ld. Commissioner of Income Tax (Appeals)-28, Mumbai {(in short ‘CIT(A)’}, dated 28.01.2014 for the 2 Venus International assessment year 2004-05, decided against the assessment order passed by the Assessing Officer (in short ‘AO’) u/s 143(3) of the Act, on the following grounds:
" 1.The Ld. CIT(A) has erred in law as well as on fact by not sustaining addition made on account of shortage as the assessee have never pointed out during the assessment proceeding that the reason for the same is shrinkage due to processing of grey fabric into furnished fabrics.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not sustaining the disallowance made on account of Keyman Insurance Premium taken on the life of partners, as the assessee has failed to prove partners status as Keyman for conduct of business either by the partnership deed or by conduct of the business since no salary/remuneration/interest has been paid to any of the partners in the earlier years.
3. For the above mentioned reasons and any other reason that may be urged at the time of hearing, it is requested that the order of the CIT(A) be quashed and that of the A.O. be restored."
During the course of hearing, arguments were made by Shri Ekta Malavia Joshi, Authorised Representative (AR) on behalf of the Assessee and by Shri Sanjeev Kashyap, Departmental Representative (DR) on behalf of the Revenue.
The main issue raised in this appeal is with regard to alleged failure of the assessee in deduction of tax at source while making the payment to artists by the assessee and its consequent disallowance u/s.40(a)(ia).
3 Venus International 3.1. Although, during the course of hearing appeal was heard on merits but subsequently it has been brought to our notice that recently Central Board of Direct Taxes has issue Circular No.21/2015 dated 10th December, 2015.
3.2. It is noted by us that tax effect in this case is apparently less than Rs. 10,00,000/-.
3.3. We have gone through the aforesaid circular of the Board. It has been provided in the aforesaid circular that no appeal shall be filed by the Revenue if the tax effect involved in the appeal does not exceed a sum of Rs. 10 Lacs. It has further been provided that instructions contained therein shall apply retrospectively to pending appeals also. Relevant part of the circular is reproduced below:
“10. This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/ Tribunal. Pending appeals below the specified tax limits in para 3 above may be withdrawn/ not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed.”
3.4. It is further noted by us from the order of Ld. CIT(A) that tax effect in this case is less than the amount of 4 Venus International Rs.10,00,000/-. As per law, circular of CBDT has binding effect on the income tax authorities.
3.5. In view of the above, we find that the appeal of the Revenue is not maintainable. Therefore, we dismiss the same.
3.6. However, with a view to follow principles of natural justice, we give liberty to the Revenue to file Miscellaneous Application u/s 254 in case tax effect is found to be more than Rs. 10,00,000/-.
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 20th January, 2016.