DCIT, Circle-1(1), Hyderabad, Hyderabad V. Ambience Properties Ltd., Hyderabad

ITA 240/HYD/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2298 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-12-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 10-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B RAJARAM
• Keywords: Tax effect; Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS. 239 & 240/HYD/2015 ASSESSMENT YEAR: 2009-10 & 2010-11 DY. COMMISSIONER OF INCOME- TAX, CIRCLE 1(1), HYDERABAD. VS. AMBIENCE PROPERTIES LTD., HYDERABAD. PAN AABCA7248N (APPELLANT) (RESPONDENT) REVENUE BY : SHRI B. RAJA RAM ASSESSEE BY : SHRI K.C. DEVDAS DATE OF HEARING : 04-07-2017 DATE OF PRONOUNCEMENT : 31-07-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: BOTH THESE APPEALS FILED BY THE REVENUE ARE DIRECT ED AGAINST THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME-TA X(A) - 1, HYDERABAD, BOTH DATED 08-12-2014 FOR AYS. 2009-10 A ND 2010-11. ITA NO. 239/HYD/2015 FOR AY 2009-10 2.1 THE FACTS ARE THAT THE AO DISALLOWED INTEREST E XPENSES FOR THE FOLLOWING REASONS: I) THE OUTSTANDING UNSECURED LOANS AS ON 31/03/2009 WERE RS. 19,97,12,238/-. THE INTEREST OF RS. 43,41,958/- WAS PAID ON SUCH UNSECURED LOANS TAKEN BY THE ASSESSEE. II) SIMILAR DISALLOWANCE OF INTEREST MADE FOR AY 20 08-09 WAS CONFIRMED BY THE CIT(A) 1, HYDERABAD. 2 ITA NO. 239 & 240/H/15 AMBIENCE PROPERTIES LTD., HYD. III) IT WAS DECIDED BY THE FIRST APPELLATE AUTHORIT Y THAT THERE WAS NO COMMERCIAL EXPEDIENCY IN MAKING THE INVESTMENT I N SISTER CONCERNS IV) FOLLOWING THE DECISION OF THE CIT(A), THE AO DI SALLOWED THE FINANCIAL CHARGES. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A) AND SUBMITTED THAT IN AY 2 008-09, THE DISALLOWANCE WAS MADE WITH REFERENCE TO SPECIFIC IN VESTMENT IN THE SUBSIDIARY COMPANY NAMELY M/S GLOBAL SHELTERS PVT. LTD. HOWEVER, THE ITAT ALLOWED THE INTEREST AS NO INTEREST WAS PA ID ON BORROWED FUNDS. HE SUBMITTED THAT THE INVESTMENT IN THE GROU P COMPANIES WAS ON ACCOUNT OF COMMERCIAL EXPEDIENCY AND FOR FURTHER ANCE OF ITS BUSINESS. HE SUBMITTED THAT THE AO SHOULD HAVE DISC USSED AND APPRECIATED THE NECESSITY OF INCURRING SUCH EXPENDI TURE BEFORE DENYING THE INTEREST AND THE AO IS NOT CORRECT IN RELYING SUMMARILY ON THE DECISION. 4. THE CIT(A) REFERRING TO THE UNSECURED LOANS AS O N 31/03/2009 OF RS. 19,97,17,238/- AND RS. 47,09,68,140/- AS ON 31/03/2008 AS WELL AS REFERRING TO THE DETAILS OF INVESTMENT MADE AS REFLECTED IN THE BALANCE SHEET, OBSERVED THAT ALL THE INVESTMENTS WE RE MADE IN THE EARLIER YEARS AND THERE WERE NO FRESH INVESTMENTS I N FY 2008-09 AND CONTRARY, CERTAIN INVESTMENTS WERE SOLD. HE OBSERVE D THAT ON CAREFUL PERUSAL OF THE BALANCE SHEET ONE CAN UNDERSTAND THA T THERE WAS REDUCTION IN UNSECURED LOANS OUTSTANDING AS ON 31/0 3/2009 OF RS. 19.97 CRORES AGAINST UNSECURED LOANS OUTSTANDING AS ON 31/03/2008 OF RS. 47 CRORES. SIMILARLY, THE INVESTMENT HAS ALS O COME DOWN TO RS. 11.76 CRORES AS ON 31/03/2009 FROM RS. 20.77 CRORES AS ON 31/03/2008. HE OBSERVED THAT DURING THE YEAR, THE S UBSTANTIAL PART OF INTEREST WAS PAID TO M/S A.V. COMMERCIAL CO. PVT. L TD. OF RS. 40,61,766/- AND THE LOAN OUTSTANDING PAYABLE BY THE ASSESSEE TO THE SAID COMPANY AS ON 31/03/2008 WAS RS. 8.6 CRORE AND AS ON 3 ITA NO. 239 & 240/H/15 AMBIENCE PROPERTIES LTD., HYD. 31/03/2009 WAS RS. 6.65 CRORES AND SOME OF THE INVE STMENTS MADE IN EARLIER YEARS WERE SOLD AND WERE PAID TO THE SAID C OMPANY. 4.1 IN VIEW OF THE ABOVE OBSERVATIONS AND FOLLOWING THE DECISION OF THE ITAT IN ASSESSEES OWN CASE FOR AY 2008-09 AS W ELL AS RELYING FEW CASE LAWS INCLUDING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SA BUILDERS VS. CIT 288 ITR 0001, THE C IT(A) HELD THAT THE ASSESSEE COMPANY BORROWED FUNDS, INVESTED IN SI STER CONCERNS WHICH ARE ENGAGED IN SIMILAR LINE OF BUSINESS AND T HEREFORE, THE INTEREST PAID ON BORROWED FUNDS IS TO BE ALLOWED. A CCORDINGLY, HE DIRECTED THE AO TO ALLOW THE SAME. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVEN UE IS IN APPEAL BEFORE US. 6. INITIALLY, REVENUE HAS FILED GROUNDS OF APPEAL, WHICH ARE AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE DECISI ON OF HONBLE SUPREME COURT IN THE CASE OF SA BUILDERS VS. CIT 28 8 ITR 001 2. WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THER E IS NO COMMERCIAL EXPEDIENCY IN THE INSTANT CASE. 6.2 SUBSEQUENTLY, WITH THE APPROVAL OF CCIT, THE RE VENUE FILED REVISED GROUNDS OF APPEAL ON 04/04/2016. LD. DR HAS FILED RELEVANT COPY OF APPROVAL OF CCIT FROM THE JUDICIAL FILE AND IS FOUND TO BE IN ORDER. ACCORDINGLY, THE REVISED GROUNDS FILED BY TH E REVENUE ARE ACCEPTED AND THE SAME ARE AS UNDER: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 43,41, 958/- ON ACCOUNT OF DISALLOWANCE OF FINANCIAL CHARGES. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1,58,6 8,000/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES CLAIMED ON PROJ ECT BY NAME ANTHEM COMPLETED IN EARLIER YEARS. 4 ITA NO. 239 & 240/H/15 AMBIENCE PROPERTIES LTD., HYD. 6. LD. DR RELIED ON THE ORDER OF AO AND CONTENDED T HAT THE CIT(A)S ACTION IN DELETING THE ADDITION MADE ON AC COUNT OF DISALLOWANCE OF FINANCIAL CHARGES, IS NOT PROPER, T HEREFORE, THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE AO B E RESTORED. 7. LD. AR BESIDES RELYING ON THE ORDER OF THE CIT(A ), RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CA LCUTTA CO. LTD. VS. CIT, WEST BENGAL, 37 IT 0001 (SC). 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. THE AO DISALLOWED THE INTEREST PAID ON U NSECURED LOANS TAKEN BY THE ASSESSEE FOLLOWING THE DECISION OF THE CIT(A) IN ASSESSEES CASE FOR AY 2008-09. THE CIT(A), NOW, FO LLOWING THE DECISION OF THE ITAT IN ASSESSEES OWN CASE AS WELL RELYING ON FEW CASE LAWS INCLUDING THE CASE OF SA BUILDERS VS. CIT 288 ITR 0001, HELD THAT THE ASSESSEE COMPANY BORROWED FUNDS, INVE STED IN SISTER CONCERNS WHICH ARE ENGAGED IN SIMILAR LINE OF BUSIN ESS. IT IS OBSERVED THAT THE ASSESSEE HAS MADE THE INVESTMENT IN THE SI STER CONCERNS IN THE EARLIER AY AND FOR THE SAME AY, THE COORDINATE BENCH OF THIS TRIBUNAL HAS ALREADY ADJUDICATED AS BELOW: 15. BEING SO) AS SEEN FROM THE ABOVE} IT CANNOT BE SAID THAT THE ASSESSEE USED BORROWED FUNDS FOR NON BUSINESS PURPO SES. THE PLEA OF THE DEPARTMENT IS THAT INSTEAD OF MAKING IN TEREST FREE INVESTMENT IN M/S. GSPL, THE ASSESSEE SHOULD HAVE U SED THE SAME FOR THE PURPOSE OF CLEARING LOANS AND IT COULD HAVE VERY WELL SAVED THE INTEREST PAYMENT. WHEN THE ASSESSEE NOT USED BORROWED FUNDS FOR THE PURPOSE OF INVESTMENT) THE D EPARTMENT CANNOT SAY THAT INTEREST FREE FUNDS AVAILED BY THE ASSESSEE SHOULD HAVE BEEN USED FOR THE PURPOSE OF CLEARING T HE EXISTING LOANS. IT IS THE PREROGATIVE OF THE ASSESSEE TO TAK E A BUSINESS DECISION IN WHAT MANNER THE ASSESSEE HAS TO DEPLOY ITS FUNDS. THE REVENUE CANNOT DECIDE WHAT THE ASSESSEE HAS TO DO AND CANNOT COMPEL THE ASSESSEE TO MAXIMISE THE PROFIT S O AS TO PAY HIGHER INCOME TAX. THE ASSESSEE IS ENGAGED IN THE B USINESS OF REAL ESTATE. SAME IS THE POSITION WITH THE SISTER C ONCERN, M/S. 5 ITA NO. 239 & 240/H/15 AMBIENCE PROPERTIES LTD., HYD. GSPL. THERE ARE COMMON INTERESTS AMONG THE COMPANIE S. IN VIEW OF THE COMMERCIAL EXPEDIENCY THE ASSESSEE ADVA NCED THE INTEREST FREE FUNDS TO THE SISTER CONCERN WHICH IS RECEIVED FROM M/S. PPPL. BEING SO, THE INTEREST BEARING FUNDS WER E NOT AT ALL DIVERTED BY THE ASSESSEE TO MAKE INVESTMENT IN THE SISTER CONCERN. THEREFORE, NO DISALLOWANCE COULD BE MADE O N NOTIONAL BASIS AND IT CANNOT BE DISALLOWED EVEN IF IT HAS NO T RESULTED IN ANY INCOME TO THE ASSESSEE. RESPECTFULLY FOLLOWING THE SAME, AO IS DIRECTED TO ALLOW THE INTEREST EXPENDITURE AS CLAIMED BY THE ASSESSEE. 9. AS REGARDS THE NEXT ISSUE IN AY 2009-10 REGARDIN G DISALLOWANCE OF RS. 1,58,68,000/-, THE AO OBSERVED THAT AS PER T HE INFORMATION FURNISHED DURING THE ASSESSMENT PROCEEDINGS IT HAD BEEN CLAIMED THAT THE ASSESSEE HAD COMPLETED A PROJECT BY NAME ANTHE M AND THERE WAS A LIABILITY FOR THE WORK TO BE DONE IN THE PROJ ECT AS ON 31/03/2009. THE AO WAS OF THE VIEW THAT THE STAND OF THE ASSESS EE CANNOT BE ACCEPTED SINCE ALL THE SALES HAD BEEN RECOGNIZED BY THE END OF 31/03/2009 AND THE ASSESSEE IS RECOGNIZING SALE ON THE BASIS OF WORK COMPLETED IN EACH PROJECT. HE OPINED THAT IF THE WO RK IS NOT COMPLETED TOTALLY THERE SHOULD BE SOME SALES LEFT OVER IN REL ATION TO THAT UNCOMPLETED WORK. IN VIEW OF THE ABOVE OBSERVATIONS , THE AO HELD THAT THE ACCOUNTING OF LIABILITY IN RESPECT OF THE WORK TO BE COMPLETED IN THE ANTHEM PROJECT CANNOT BE ACCEPTED FOR THE ABOVE REASON AND HENCE, THE SAME IS DISALLOWED AND ADDED BACK. 10. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT SOME OF THE WORKS PERTAINING TO ANTHEM PROJECT OF RS. 1,58,68,0 00/- WERE COMPLETED IN THE NEXT FINANCIAL YEARS AS UNDER: PARTICULARS LIABILITY PROVIDED IN FY 2008-09 EXPENDITURE INCURRED IN FY TO BE INCURRED 2009-10 2010-11 WIP WORKS 75,79,568 43,86,958 22,57,470 9,35,140 MATERIALS 64,21,053 34,31,882 18,89,171 11,00,000 EMPLOYEES COST 3,64,652 2,53,228 86,424 25,000 SITE ADMIN 70,003 17,679 27,174 25,150 6 ITA NO. 239 & 240/H/15 AMBIENCE PROPERTIES LTD., HYD. EXPENSES SANCTION & PERMISSIONS 35,114 - 35,114 - PROFESSIONAL & CONSULTANCY 13,97,610 - 610 13,97,000 TOTAL 1,58,68,000 80,89,747 42,95,963 34,82,290 FURTHER, HE SUBMITTED THAT AS PER THE DIRECTORS REP ORT WHICH FORMS PART OF ANNUAL REPORT OF THE COMPANY, FOR THE YEAR ENDING ON 31/03/2009, THE COMPANY HAS COMPLETED THE ANTHEM PR OJECT SUBSTANTIALLY DURING THE YEAR AND BOOKED THE BALANC E SALE OF THE SOLD HOUSES AMOUNTING TO RS. 421,39,456/-. IN THE ANNUA L ACCOUNTS, SCHEDULE 14, COST OF THE PROJECTS INCURRED DURING THE YEAR CLEARLY SHOWS THAT : I) COST OF PROJECT UPTO 31/03/2009 : RS. 13,64,29,3 09 ADD: LIABILITY FOR WORK TO BE DONE C/F: 1,58 ,58,000 RS. 15,22,97,309 11. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, THE CIT(A) OBSERVED THAT AS A MATTER OF SAMPLE VERIFICATION TH E ASSESSEE PRODUCED A SALE DEED DATED 25.03.2009 THROUGH WHICH THE ASSESSEE SOLD A BUNGALOW IN ANTHEM PROJECT TO ONE MR. HEMANT H LAJPAL, PLOT NO. 38 WHOSE BUILT UP AREA IS 4570 SQ.FT FOR A CONS IDERATION OF RS. 67,44,600/-. NONE OF THE CLAUSES IN THE AGREEMENT T ALKS ABOUT THE PENDING WORKS TO BE DONE BY THE ASSESSEE. WHEN QUER IED ON THIS ISSUE, IT WAS EXPLAINED BY THE ASSESSEE THAT PENDIN G WORKS ARE NEVER DOCUMENTED IN REGISTERED DOCUMENT AS THE SAME IS EX ECUTED AT INITIAL STAGES ITSELF. IT WAS FURTHER EXPLAINED THAT, THE S ALE VALUE IS CREDITED TO PROFIT & LOSS ACCOUNT, BUT ACTUAL AMOUNTS ARE RE CEIVED BY ASSESSEE IN SUBSEQUENT YEARS. THE CIT(A) OPINED THAT IF THE SALE OF THE PROPERTY IS FULLY ACCOUNTED, THE CORRESPONDING EXPE NDITURE ALSO HAS TO BE DEBITED IN MERCANTILE SYSTEM OF ACCOUNT. HE, THE REFORE, DIRECTED THE AO TO VERIFY THE ACTUAL EXPENDITURE INCURRED IN SUBSEQUENT YEARS, PERTAINING TO THE SALES CREDITED TO THE PROFIT AND LOSS ACCOUNT IN FY 2008-09 AND TAKE ACTION ACCORDINGLY. 7 ITA NO. 239 & 240/H/15 AMBIENCE PROPERTIES LTD., HYD. 12. AGGRIEVED BY THE DIRECTIONS OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 13. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL FACTS ON RECORD. THE FACTS AS ENUMERATED FROM THE RECORDS ARE, THE ASSESSEE HAS SOLD AND ACCOUNTED ALL THE REVENUE FRO M THE PROJECT ANTHEM IN THE AY 2009-10 BUT THERE WERE SOME INCO MPLETE WORK WHICH ARE NOT SIGNIFICANT TO STOP RECOGNISING THE S AME AS SALES. ACCORDINGLY, IT HAS RECOGNIZED ALL THE PROJECTS AS SOLD AND RECOGNISED THE INCOMPLETE WORK AS LIABILITY IN THE BOOKS OF AC COUNT AND CHARGED THE COST TO THE P&L ACCOUNT ON THE BASIS OF MATCHIN G PRINCIPLE. ASSESSEE HAS SUBMITTED THE STATEMENT THAT IT HAD CA RRIED OUT THE REMAINING WORK IN THE SUBSEQUENT YEARS. IN THIS REG ARD, THE HONBLE SUPREME COURT HELD IN THE CASE OF CALCUTTA CO. LTD. (SUPRA), ON WHICH, RELIANCE PLACED BY THE ASSESSEE, THE HONBLE SUPREME COURT HAS HELD AS UNDER: I) THAT THE UNDERTAKING TO CARRY OUT THE DEVELOPMENTS WITHIN SIX MONTHS FROM THE DATES OF THE DEEDS OF SALE (WHICH, IN VIEW OF THE FACT THAT TIME WAS NOT OF THE ESSENCE OF THE CO NTRACT, MEANT A REASONABLE TIME) WAS UNCONDITIONAL, THE APPELLANT BINDING ITSELF ABSOLUTELY TO CARRY OUT THE SAME. THAT UNDER TAKING IMPORTED A LIABILITY ON THE APPELLANT WHICH ACCRUED ON THE DATES OF THE DEEDS OF SALE, THOUGH THAT LIABILITY WAS TO BE DISCHARGED AT A FUTURE DATE. IT WAS THUS AN ACCRUED LIABILITY AND THE ESTIMATED EXPENDITURE WHICH WOULD BE INCURRED IN DI SCHARGING THE SAME COULD BE DEDUCTED FROM THE PROFITS AND GAI NS OF THE BUSINESS, AND THE AMOUNT TO BE EXPENDED COULD BE DE BITED IN ACCOUNTS MAINTAINED IN THE MERCANTILE SYSTEM OF ACC OUNTING BEFORE IT WAS ACTUALLY DISBURSED. THE DIFFICULTY IN THE ESTIMATION THEREOF DID NOT CONVERT THE ACCRUED LIABILITY INTO A CONDITIONAL ONE, BECAUSE IT WAS ALWAYS OPEN TO THE INCOME-TAX A UTHORITIES CONCERNED TO ARRIVE AT A PROPER ESTIMATE THEREOF HA VING REGARD TO ALL THE CIRCUMSTANCES OF THE CASE. II) THAT THE SUM OF RS. 24,809/- REPRESENTED THE ES TIMATED AMOUNT WHICH WOULD HAVE TO BE EXPENDED BY THE ASSES SEE IN THE COURSE OF CARRYING ON ITS BUSINESS AND WAS INCI DENTAL TO THE BUSINESS AND, HAVING REGARD TO THE ACCEPTED COMMERC IAL PRACTICE AND TRADING PRINCIPLES, WAS A DEDUCTION WH ICH, IF THERE WAS NO SPECIFIC PROVISION FOR IT UNDER SECTION 10(2 ) OF THE INCOME-TAX ACT, WAS CERTAINLY AN ALLOWABLE DEDUCTIO N, IN 8 ITA NO. 239 & 240/H/15 AMBIENCE PROPERTIES LTD., HYD. ARRIVING AT THE PROFITS AND GAINS OF THE BUSINESS O F THE APPELLANT, UNDER SECTION 10(1) OF THE ACT, THERE BEING NO PROH IBITION AGAINST IT, EXPRESS OR IMPLIED, IN THE ACT. THE EXPRESSION PROFITS AND GAINS IN SECTION 10(1 ) OF THE INCOME-TAX ACT HAS TO BE UNDERSTOOD IN ITS COMMERCI AL SENSE AND THERE CAN BE NO COMPUTATION OF SUCH PROFITS AND GAINS UNTIL THE EXPENDITURE WHICH IS NECESSARY FOR THE PURPOSE OF EARNING THE RECEIPTS IS DEDUCTED THEREFROM WHETHER THE EX PENDITURE IS ACTUALLY INCURRED OR THE LIABILITY IN RESPECT THERE OF HAS ACCRUED EVEN THOUGH IT MAY HAVE TO BE DISCHARGED AT SOME FU TURE DATE. FOLLOWING THE ABOVE RATIO, WE ARE OF THE VIEW THAT THE ASSESSEE HAS RECOGNIZED THE WHOLE REVENUE OUT OF THE PROJECT AN THEM AND ON THE MATCHING PRINCIPLE, IT HAS RECOGNIZED THE INCOMPLET E WORK AND TREATED THE SAME AS LIABILITIES IN THE BALANCE SHEET. THE S AME WAS DISCLOSED IN THE ANNUAL REPORT. IN OUR VIEW, THE METHOD ADOPT ED AND DISCLOSED BY THE ASSESSEE IS PROPER AND AO CANNOT TREAT THE S AME AS IMPROPER. ACCORDINGLY, GROUND RAISED BY THE REVENUE IS DISMIS SED. ITA NO. 240/HYD/2015 FOR AY 2010-11 14. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TAX EFFECT IN THIS APPEAL IS LES S THAN RS. 10 LAKHS AND THEREFORE, REVENUES APPEAL IS LIABLE TO BE DIS MISSED IN VIEW OF CBDT CIRCULAR NO.21/2015 DATED 10 TH DECEMBER, 2015. THIS CIRCULAR REGARDING THE PECUNIARY LIMIT FOR PREFERRING THE AP PEAL BEFORE THE ITAT BY THE REVENUE HAS NOW STATUTORY FORCE UNDER SEC. 2 68A OF THE INCOME-TAX ACT, 1961. ON GOING THROUGH THE ASSESSME NT ORDER, WE FIND THAT THE TOTAL INCOME ASSESSED BY THE A.O. WAS RS. 72,14,019/- THE TAX EFFECT INVOLVED IN THIS APPEAL AFTER GIVING EFFECT TO THE ORDER OF THE CIT(A) IS LESS THAN RS. 10 LAKHS AND THIS POSIT ION HAS NOT BEEN DISPUTED BY THE LEARNED DR. THEREFORE, WE ARE SATI SFIED THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS.10 LAKHS. 15. THE CBDT VIDE CIRCULAR NO.21/2015 DATED 10 TH DECEMBER, 2015 HAS FIXED THE MONETARY LIMIT FOR FILING OF APPEALS BEFORE THE TRIBUNAL, 9 ITA NO. 239 & 240/H/15 AMBIENCE PROPERTIES LTD., HYD. HONBLE HIGH COURT AND HONBLE SUPREME COURT RESPEC TIVELY. THE MONETARY LIMIT FIXED FOR FILING OF APPEAL BEFORE TH E TRIBUNAL IS RS.10 LAKHS AND IT IS ALSO CLARIFIED THAT THE TAX EFFECT MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TH E TAX THAT WOULD HAVE BEEN CHARGEABLE ON SUCH TOTAL INCOME BEING RED UCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST W HICH, APPEAL IS INTENDED TO BE FILED AND ALSO THAT THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITS ELF IS IN DISPUTE. PARA-10 OF THE INSTRUCTION ALSO CLARIFIES THAT THE INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO B E FILED HENCEFORTH IN THE HIGH COURTS/TRIBUNAL AND HAS DIRECTED THE DE PARTMENT TO EITHER WITHDRAW OR NOT PRESS THE APPEALS BELOW THE SPECIFI ED TAX LIMITS. DULY TAKING NOTE OF THE CBDT CIRCULAR NO.21/2015 DATED 1 0 TH DECEMBER, 2015, WE DISMISS THE APPEAL OF THE REVENUE WITH THE LIBERTY TO THE REVENUE TO SEEK RECALL OF THIS ORDER IF THIS CASE F ALLS WITHIN ANY OF THE EXCEPTIONS TO THE CBDT CIRCULAR MENTIONED THEREIN. 16. IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED. 17. TO SUM UP, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2017. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RA HMAN) JUDICIAL MEMBER AC COUNTANT MEMBER HYDERABAD, DATED: 31 ST JULY, 2017. KV 10 ITA NO. 239 & 240/H/15 AMBIENCE PROPERTIES LTD., HYD. COPY TO:- 1) DCIT, CIRCLE 1(1), 8 TH FLOOR, C BLOCK, IT TOWERS, AC GUARDS, MASAB TANK, HYDERABAD. 2) M/S AMBIENCE PROPERTIES LTD., INRHYTHM BUILDING, 1 ST FLOOR, PLOT NO. 1023, GURUKUL SOCIETY, KHANAMET VILLAGE , NEAR MERIDIAN SCHOOL, MADHAPUR, HYDERABAD 500 081 3) CIT(A) - 1, HYDERABAD 4 CIT, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER