ASST CIT-32(1) , MUMBAI V. M/S. MCR CONSTRUCTION, MUMBAI

ITA 108/MUM/2021

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 0410 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 07-02-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Tax effect; Tax effect
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.108/Mum./2021 (Assessment Year : 2010–11) Asstt. Commissioner of Income Tax Circle–32(1), Mumbai ................ Appellant v/s M/s. MCR Construction B–1, Neel Apartment, S.V.P. Road Borivali (West), Mumbai 400 092 PAN – AAQFM5113N ................ Respondent Assessee by : Shri Subhash Chhajed Revenue by : Shri C.T. Mathews, Sr. AR Date of Hearing – 07.06.2022 Date of Order – 05/07/2022 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the Revenue challenging the impugned order dated 18/09/2020, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals)–44, Mumbai, [“learned CIT(A)”], for the assessment year 2010–11. 2. During the course of hearing, at the outset, the learned Authorised Representative (“learned A.R.”) submitted that the tax effect involved in M/s. MCR Construction ITA No.108/Mum./2021 Page | 2 the present appeal by the Revenue is below Rs.50 lakh as provided in CBDT Circular no.17/2019, dated 08/08/2019. The learned A.R. submitted that the amount of tax as mentioned in Form no.36, filed by the Revenue is wrongly calculated at Rs.50,98,500. As per the learned A.R., the said tax effect was calculated after considering surcharge @ 10%, which is not leviable in the case of a firm. The learned A.R. submitted that the total tax effect in the present case is only Rs.46,35,000, and prayed that the present appeal be dismissed in view of the CBDT Circulars. 3. On the other hand, the learned Departmental Representative did not dispute that the assessee is a partnership firm, as the said position has also not been disputed by any of the lower authorities. 4. We have considered the rival submissions and perused the material available on record. In the present case, it is not in dispute that the assessee is a partnership firm and engaged in the business of civil contract and carrying business for/on behalf of various Government, Semi Government agencies. The Revenue being aggrieved by the impugned order passed by the learned CIT(A) filed the present appeal. In Form no.36, the tax effect relating to the ground of appeal is mentioned at Rs.50,98,500. As per the assessee, this tax effect includes the surcharge computed @ 10%. The computation submitted by the learned A.R. is as under:– Tax @ 30% Rs.45,00,000 M/s. MCR Construction ITA No.108/Mum./2021 Page | 3 SC @ 10% Rs.4,50,000/– Total Tax & Surcharge Rs.49,50,000/– Edu. Cess @ 2% Rs.99,000/– S&H Edu. Cess @ 1% Rs.49,500/– Total Tax Effect as per Form 36 Rs.50,98,500 5. We find that the CBDT, vide Circular no.1/2011 – Explanatory Notes to the provisions of Finance Act, 2010, provided as under:– “3.1–4 FIRMS – In the case of every firm, the rate of income–tax of thirty per cent has been specified in Paragraph C of Part I of the First Schedule to the Act. No surcharge shall now be levied in the case of a firm.” 6. In view of the above, the correct tax effect in the present appeal, as submitted by the learned A.R. is as under:– DISPUTED ADDITION TAX EFFECT Rs.1,50,000,00/– Tax @ 30% – Rs.45,00,000/– Edu Cess @2%– Rs. 90,000/– S&H Edu. Cess @ 1% – 45,000/– Total Tax Effect Rs.46,35,000/– 7. As the assessee is accepted to be a firm, therefore, in view of the CBDT Circular no.1/2011, no surcharge is leviable in case of the assessee and, hence, in our view, the correct tax effect in the present appeal is Rs.46,35,000, which is below the revised monetary limit of Rs. 50 lakh as per CBDT Circular no.17/2019, dated 08/08/2019, r/w CBDT Circular no.3/2018, dated 11/07/2018, r/w circular F. no.279/Misc./142/2007-IT)- (Pt) dated 20/08/2018. In view of the aforesaid, Revenue's appeal deserves to be dismissed. However, the Revenue is given liberty to seek recall of this order if, at a later point of time, it is found that the appeal M/s. MCR Construction ITA No.108/Mum./2021 Page | 4 falls under any of the exceptions provided in the Circulars referred to above. 8. In the result, appeal by the Revenue is dismissed. Order pronounced in the open court on 05/07/2022 Sd/- S. RIFAUR RAHMAN ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 05/07/2022 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai