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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)-3, Mumbai {(in short ‘CIT(A)’}, dated 26.02.2013 for the 2 Violet Pictures Co. Ltd. assessment year 2009-10, 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. On the facts and in the circumstances of the case and in law, the assessee should have credited all the receipts from various sources in its books and then claim the deductions as per the statute.
2. On the facts and in the circumstances of the case and in law, whether the Ld.CIT(A) was justified in holding that the transaction between the assessee and Star India Pvt. Ltd. is in the nature of principal- agent relationship despite the bill being raised by the assessee company on behalf of the artists? 3. On the facts and in the circumstances of the case and in law, whether the Ld.CIT(A) was justified in holding that disallowance u/s.40(a)(ia) is not applicable on the amount of Rs.24.4 lacs on which the assessee company has not deducted the tax at source during the year under consideration."
During the course of hearing, arguments were made by Shri Himanshu Gandhi, Authorised Representative (AR) on behalf of the Assessee and by Shri Santosh Mankoskar, 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 Violet Pictures Co. Ltd.
3.1. Although, during the course of hearing appeal was held 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 Violet Pictures Co. Ltd. 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 6th January, 2016.