The Income Tax Officer, Ward-1(1)(4), Ahmedabad V. Amazon Textiles Pvt. Ltd., Ahmedabad

ITA 1648/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2559 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 05-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BIREN SHAH
• Keywords: Tax effect
• Section: 14A

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH C BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.1406/AHD/2017 / ASSTT. YEAR: 2013-2014 AMAZON TEXTILES P.LTD. 105, SAKAR-1 NR.NEHRU BRIDGE ASHRAM ROAD AHMEDABAD 380 06. PAN : AABCB 6914 E VS. ITO, WARD-1(1)(4) AHMEDABAD. ./ ITA NO.1648/AHD/2017 / ASSTT. YEAR: 2013-2014 ITO, WARD-1(1)(4) AHMEDABAD. VS. AMAZON TEXTILES P.LTD. 105, SAKAR-1 NR.NEHRU BRIDGE ASHRAM ROAD AHMEDABAD 380 06. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI BIREN SHAH, AR REVENUE BY : SHRI MUDIT NAGPAL, SR.DR ! / DATE OF HEARING : 18/06/2019 '#$ ! / DATE OF PRONOUNCEMENT: 19/06/2019 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE AND THE ASSESSEE ARE IN APPEALS AGAINST ORD ER OF THE LD.CIT(A) DATED 27.4.2017 PASSED FOR THE ASSTT.YEAR 2013-14. ITA NO.1406 AND 1648/AHD/2017 2 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEA L: (A) THAT THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION IN RESPECT OF INTEREST FREE ADVANCES OF RS.43,52,172/-; (B) THAT THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.23,03,787/- MADE U/S 14A OF THE ACT. 3. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTS ET SUBMITTED THAT THE REVENUE HAS TAKEN INCORRECT AMOUNT IN ITS GROUN DS OF APPEAL. IN FACT THE LD.CIT(A) HAS NOT DELETED THE TOTAL ADDITI ON OF RS.43,52,172/- OUT OF DISALLOWANCE OF INTEREST EXPENSES, THE LD.CI T(A) HAS CONFIRMED THE DISALLOWANCE AT RS.12,87,357/-. HE TOOK US THR OUGH PAGE NO.33 OF THE ORDER. AT THE END OF THE PARAGRAPH-5, THE LD.C IT(A) HAS OBSERVED THAT THUS, DISALLOWANCE UNDER SECTION 36(1)(III) MADE B Y THE AO FOR RS.43,52,172/- IS RESTRICTED AT RS.12,87,357/-. TH IS GROUND OF APPEAL IS PARTLY ALLOWED. IF THIS RS.12,87,357/- IS REDUCED FROM RS.43,52,1 72/-, THEN TAX EFFECT ON THE REMAINING AMOUNT ALONG WITH DELETION OF DISALLOWANCE MADE UNDER SECTION 14A WOULD BE LESS T HAN RS.20 LAKHS, AND THE APPEAL OF THE REVENUE WOULD NOT BE MAINTAIN ABLE IN VIEW OF THE RECENT CBDT CIRCULAR RESTRICTING THE FILING OF APPE AL BY THE REVENUE BEFORE THE TRIBUNAL, WHERE TAX EFFECTIVE IS BELOW R S.20 LAKHS. ON THE OTHER HAND, THE LD.DR IS UNABLE CONTROVERT THIS CON TENTION OF THE LD.COUNSEL FOR THE ASSESSEE. 4. ON DUE CONSIDERATION OF THE ABOVE FACTS, WE FIND THAT TOTAL ADDITION IMPUGNED IN GROUND NO.1 AND 2 DELETED BY T HE LD.CIT(A) IS 53,68,602/- I.E. (RS.43,52,172/- MINUS RS.12,87,357 /-) PLUS RS.23,03,787/-. BY VIRTUE OF THIS RELIEF, TAX EFFE CT WOULD BE LESS THAN RS.20 LAKHS. THEREFORE, IN VIEW OF THE CBDT INSTRUC TION BEARING NO.3 OF 2018 DATED 11.08.2018, THE REVENUE IS PROHIBITED FR OM FILING SUCH APPEAL BEFORE THE TRIBUNAL THEREFORE, THE PRESENT A PPEAL IS NOT ITA NO.1406 AND 1648/AHD/2017 3 MAINTAINABLE AT THE THRESHOLD. THE LD.DR HAS NOT D ISPUTED APPLICABILITY OF ABOVE CIRCULAR CITED BY THE LD.COUNSEL FOR THE A SSESSEE, AND HAS NOT POINTED OUT WHETHER THE CASE OF THE REVENUE FALL WI THIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRCULAR OR NOT. THUS, KEEPING IN VIEW THE ABOVE CBDT CIRCULAR, WHICH IS APPLICABLE TO PENDING APPEALS ALSO, AND PROVISIONS OF SECTION 268A OF THE INCOME TAX ACT, W E ARE OF THE VIEW THAT THE APPEAL OF THE REVENUE DESERVES TO BE DISMI SSED. IT IS ACCORDINGLY DISMISSED. HOWEVER, IT IS OBSERVED THAT IN CASE ON RE-VERIFICA TION AT THE END OF THE AO IT COMES TO THE NOTICE THAT THE TAX EFFEC T IS MORE OR REVENUES CASE FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRCULAR, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE T RIBUNAL FOR RECALL OF THIS ORDER. SUCH APPLICATION SHOULD BE FILED WITHI N THE TIME PERIOD PRESCRIBED IN THE ACT. 5. SO FAR AS ASSESSEES APPEAL IS CONCERNED, THE SA ME HAS NOT BEEN PRESSED BY THE LD.COUNSEL FOR THE ASSESSEE FOR ADJU DICATION, HENCE, THE SAME STANDS DISMISSED FOR NON-PROSECUTION. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED DUE TO LOW TAX EFFECT, WHEREAS APPEAL OF THE ASSESSEE IS DISMI SSED DUE TO NON- PROSECUTION. ORDER PRONOUNCED IN THE COURT ON 19 TH JUNE, 2019 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 19/06/2019