The DCIT, Circle-4(1)(2), Ahmedabad V. Tiger Surgical Disposable Pvt. Ltd., Ahmedabad

ITA 1395/AHD/2019

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 0373 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 02-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A DIFFERENT
• Keywords: Tax effect; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH (Conducted Through Virtual Court) Before: Shri Rajpal Yadav, Vice President And Ms. Annapurna Gupta, Accountant Member Th e DCIT, Circle-4 (1 )(2), Ah medabad (Appellant) Vs Tiger Surgical Disposab le Pvt. Ltd. Ah med abad PAN: AABCT9 663N (Resp ondent) Revenue by : Shri V. K. Sing h, Sr. D. R. Asses see b y : Shri Mah esh Ch hajed, A. R. Date of hearing : 01-12 -2 021 Date of pronouncement : 03-12 -2 021 आदेश/ORDER PER : ANNAPURNA GUPTA, ACCOUNTANT MEMBER:- The present appeal has been filed by the Revenue against the order passed by the Commissioner of Income Tax (Appeals)-8, Ahmedabad, (in short referred to as CIT(A)), dated 07-06-2019, u/s. 250(6) of the Income Tax Act, 1961(hereinafter referred to as the “Act”) pertaining to Assessment Year (A.Y) 2012-13. 2. At the outset ld. counsel for the assessee pointed out that the appeal filed by the Department needs to be dismissed as withdrawn on account of the tax effect involved being below that prescribed for filing ITA No. 1395/Ahd/2019 Assessment Year 2012-13 I.T.A No. 1395/Ahd/2019 A.Y. 2012-13 Page No DCIT vs. Tiger Surgical Disposable Pvt. Ltd. 2 appeals by the Department before the ITAT vide CBDT Circular No. 17 of 2019 dated 8 th August, 2019. The ld. counsel for the assessee pointed out that the limit prescribed vide the said Circular was Rs. 50 lacs while the tax effect involved in the present appeal was only Rs. 15,99,436/-. To this effect, he drew our attention to the grounds of appeal raised by the Revenue. The ld. Departmental Representative, on the other hand, countered by stating that the Revenue had raised not one but two grounds and the total tax effect amounted to Rs. 1,13,24,473/- as reflected in the grounds raised as under:- Grounds of Appeal Tax effect relating to each Ground of appeal (see note below) 1. that the Id. CIT(A) has erred in law and on facts in deleting the addition of Rs.51,76,167 /- made to the net profit of the assessee. Rs, 15,99,436/- 2. Whether the Id. CIT(A) has erred in law and on facts in allowing loss of (-) Rs.3,14,72,613/-. Rs.97, 25,037/- ' Total tax effect (see note below) Rs. 1,13,24,473/- 2.1 The ld. counsel for the assessee responded by stating that ground no. 2 raised by the Revenue did not arise from the order of the Ld.CIT(A). That there was no grievance against the order of the Ld.CIT(A) as mentioned in the said ground, which he stated was evident from the order of the authorities below. I.T.A No. 1395/Ahd/2019 A.Y. 2012-13 Page No DCIT vs. Tiger Surgical Disposable Pvt. Ltd. 3 3. We have heard both the parties and also perused the contents of the orders of the authorities below. We find merit in the contention of the Ld. counsel for the assessee that the present departmental appeal is liable to be dismissed as withdrawn since the tax effect involved falls within the limit prescribed by the CBDT Circular No. 17 of 2019, dated 8 th August, 2019, for withdrawal of appeals filed by the Department. 3.1 The limit prescribed vide the aforestated circular is Rs.50 lacs. The grounds of appeal raised by the Revenue before us as reproduced above disclose the tax effect involved as being Rs. 1,13,24473/-.But the perusal of the orders of the authorities below , more particularly that of the ld. CIT(A), reveal that ground no. 2 raised by the Revenue does not arise from the order of ld. CIT(A) at all and in fact there is no grievance of the Revenue as such as raised in ground no. 2. 3.2 The orders of the authorities below reveal that the assessment in the present case had been framed rejecting the books of account of the assessee and computing the net profit from the business of the assessee by applying rate of 10% to the total turnover of the assessee being 5,17,61,665/-, resulting in computing the income of the assessee at Rs. 51,76,167/-, as opposed to loss returned by the assessee of Rs. 3,14,72,613/-. The ld. CIT(A),we find, rejected the determination of net profit by application of rate of 10% to the total turnover of the assessee and at the same time held that it would be reasonable to I.T.A No. 1395/Ahd/2019 A.Y. 2012-13 Page No DCIT vs. Tiger Surgical Disposable Pvt. Ltd. 4 compute the profits by adding 20% to the value of closing stock as reported by the assessee. In substance, he made a variation in the method of determining the net profit earned by the assessee, rejecting the method adopted by the Assessing Officer. This is all that the order of the ld. CIT(A) contains. Ground no. 2 raised by the Revenue is with regard to its grievance against allowance of loss of Rs. 3,14,72,613/- to the assessee by the Ld.CIT(A). But we have noted from the order of the ld. CIT(A) that there is no such allowance granted by the ld. CIT(A), who as stated above, has only directed determination of the net profits earned by the assessee by a different method as opposed to that applied by the AO. In fact, we find, that he has upheld the order of Assessing Officer rejecting the books of the assessee which showed the impugned loss. Therefore, this grievance of allowance of loss ,raised by the Revenue in ground no. 2, is without any substance or merit and does not arise from the order of the ld. CIT(A). The contention of the ld. counsel for the assessee to this effect, we find therefore is correct. 3.3 The only effective ground remaining is relevant to deletion of addition made by the Assessing Officer of Rs. 51,76,167/-., the tax effect on account of which is, as noted in the grounds of appeal raised by the Revenue, of Rs. 15,99,436/- only. The same being within the limits prescribed by the CBDT Cir.No. 17 of 2019 for withdrawing appeals filed by the Revenue before the ITAT, the impugned appeal I.T.A No. 1395/Ahd/2019 A.Y. 2012-13 Page No DCIT vs. Tiger Surgical Disposable Pvt. Ltd. 5 therefore deserves to be treated as withdrawn on account of low tax effect. 3.4 In view of the same, the appeal filed by the Revenue is dismissed as withdrawn. 4. The appeal of the Revenue is accordingly dismissed. Order pronounced in the open court on 03-12-2021 Sd/- Sd/- (RAJPAL YADAV) (ANNAPURNA GUPTA) VICE PRESIDENT ACCOUNTANT MEMBER Ahmedabad : Dated 03/12/2021 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद