ITO 8(3)(2), MUMBAI vs. SURAKSHA REALTY LTD, MUMBAI

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ITA 4550/MUM/2014Status: DisposedITAT Mumbai07 January 2016AY 2010-114 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 appeal filed by the Revenue was not maintainable as the tax effect was below the monetary limit prescribed by the CBDT circular for filing appeals before the ITAT. Therefore, the appeal was dismissed.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of an addition made under Section 14A read with Rule 8D to the book profit under Section 115JB. The disputed amount was Rs. 22,91,994/-.

What were the issues?

Whether the appeal filed by the Revenue is maintainable before the ITAT given the tax effect below the prescribed monetary limit. The primary issue raised by the Revenue was regarding the disallowance under Section 14A in the computation of book profit under Section 115JB.

Which sections of the Income-tax Act were involved?

Section 14A,Section 115JB

AI-generated summary — verify with the full judgment below

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

Before: SHRI JASON P. BOAZ (AM) & SHRI RAM LAL NEGI (JM)

For Appellant: Shri. Vivek Ojha
For Respondent: Shri. Anuj Kisnadwala
Hearing: 07/01/2016Pronounced: 07/01/2016

The aforesaid appeal has been filed by the Revenue against impugned order dated 11/04/2014 passed by the CIT(A)-18, Mumbai in respect of the order of assessment passed u/s 143(3) for the assessment year 2010-11, on the following grounds:- i) “On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the addition of Rs. 22,91,994/- made u/s 14A r.w. Rule 8D to the Book Profit u/s 115JB holding that disallowance u/s. 14A cannot be considered while computing book profit u/s. 115JB.”

"ii). "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in relying on the decisions in the case of Essar Teleholdings Ltd. vs. Addl.CIT & Others (ITA Nos.3850/Mum/2010) & Reliance Industrial Infrastructure Ltd vs. Addl,CIT & Others (ITA Nos.69&70/Mum/2009) ignoring the subsequent decision of the Mumbai ITAT in the case of RBK Share Broking (Pvt.) Ltd.(ITA Nos.6678 & 7546 (Mum) of 2011 dated 24.07.2013] wherein it was categorically held by the Hon'ble ITAT that from the A.Y.2008-09 onwards, disallowance u/s.14A is required to be computed as per Rule 8D and further the amount which has been disallowed also needs to be added to the amount of net profit for computing 'book profit' u/s.115JB. iii) On the facts and in the circumstances and in law, the Ld CIT(A) also erred in not appreciating the decision of Mumbai ITAT in the case of M/s. Esquire Pvt. Ltd, (ITA No.5688/Mum/2011 dated 02.07.2012) wherein the Hon'ble Tribunal has held that "in case any amount is disallowed u/s.14A, we make it clear that the amount has also to be disallowed under the provisions of section 115JB.” iv) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have confirmed the addition as the same were based on documentary evidences seized during the course of search in the premises of Shri Mukesh Chokshi who has also confirmed that he had provided accommodation entries." v). "The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the A.O. be restored." vi) "The Appellant craves leave to amend or alter any grounds or add a new ground which may be necessary".

2.

At the outset, it is noticed that, the disputed issue is only for Rs. 22,21,994/- 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.

Order pronounced in the open court on 7th January, 2016

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