The Dy. CIT., Anand Circle, Anand V. M/s. Emtici Engineering Ltd., Anand

ITA 2774/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9174 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 08-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Tax effect; TDS
• Section: 143(3); 14A

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 2774/AHD/2017 ( ASSESSMENT YEAR : 2014-15) THE DEPUTY COMMISSIONER OF INCOME TAX ANAND CIRCLE, 204, 3 RD FLOOR, S.P. PATEL COMPLEX, NEAR OLD C. K. HALL, MAYFAIR ROAD, ANAND - 388001 / VS. M/S. EMTICI ENGINEERING LIMITED ANAND SOJITRA ROAD, VALLABH VIDYANAGAR, ANAND-388120 ./ ./ PAN/GIR NO. : AAACE4642F ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI L. P. JAIN, SR.D.R. / RESPONDENT BY : SHRI MEHUL K. PATEL, A.R. DATE OF HEARING 25/09/2019 !'# / DATE OF PRONOUNCEMENT 04/10/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, VADODARA (CIT(A) IN SHORT), DATED 24.08.2017 ARISI NG IN THE ASSESSMENT ORDER DATED 09.12.2016 PASSED BY THE ASSESSING OFFI CER (AO) UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCER NING AY 2014-15. ITA NO. 2774/AHD/17 [DCIT VS. M/S. EMTICI ENGINEERING LTD.THAKOR] A.Y. 2014-15 - 2 - 2. THE SUBSTANTIVE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER:- 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION TOWARDS EXCESSIVE CLAIM OF DE PRECIATION. 2.1 THAI IN THE FACTS AND CIRCUMSTANCES OF THE CASE , AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE U/S 14A OF THE ACT MERELY ON THE ERRONEOUS PRESUMPTION OF OVERALL SUFFICIENT INTEREST FREE FUNDS, WITHOUT CON SIDERING THAT THIS WAS ONLY A PRESUMPTION AND THE DISALLOWANCE DESERVED TO BE UPHELD, AS IN T HE CASE OF AVON CYCLES LTD. (2015) 53 TAXMANN.COM 297 (P&H), PARTICULARLY AS THE ASSESSEE HAD FAILED TO CONTROVERT THE FINDINGS OF THE ASSESSING OFFICER, AND FAILED TO DEMONSTRATE THAT INVESTMENTS WERE ACTUALLY MADE OUT OF INTEREST FREE FUNDS. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE U/S 14A OF THE ACT MERELY ON THE ERRONEOUS PRESUMPTION OF OVERALL SUFFICIENT INTEREST FREE FUNDS, WITHOUT EXA MINING THE FACTS AND WHETHER THE INVESTMENTS WERE ACTUALLY MADE OUT OF INTEREST FREE FUNDS. 3.1 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE DISALLOWANCE U/S 40(A)(I) WITHOUT CONS IDERING THAT THESE PAYMENTS WERE TAXABLE IN INDIA AS FEES FOR TECHNICAL SERVICES IN TERMS OF SECTION 9(1)(VII) AND WERE LIABLE FOR TDS. 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE DISALLOWANCE U/S 40(A)(I) WITHOUT CON SIDERING THAT THE ASSESSEE HAD FAILED TO FURNISH COMPLETE DETAILS AND DEMONSTRATE THAT THIS INCOME WAS NOT TAXABLE IN INDIA UNDER THE INCOME TAX ACT AND THE RELEVANT DOUBLE TAXATION AVOIDANCE AGREEMENTS (DTAAS). 3. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD.AR FOR THE ASSESSEE THAT THE APPEAL FILED BY THE REVENUE IS HI T BY RECENTLY ISSUED CBDT CIRCULAR NO.17 OF 2019 DATED 08/08/2019 REVISI NG THE PREVIOUS THRESHOLDS PERTAINING TO TAX EFFECTS. IT IS INTER ALIA NOTICED THAT THE CBDT VIDE INSTRUCTION NO. F. NO. 279/MISC/M-93/2018-ITJ DT. 20/08/2019 HAS OBSERVED THAT CIRCULAR NO.17/2019 DATED 08/08/2019 RELATING TO ENHANCEMENT OF MONETARY LIMITS IS ALSO APPLICABLE T O ALL PENDING APPEALS. AS PER AFORESAID CIRCULAR READ WITH INSTRUCTION, AL L PENDING APPEALS FILED BY REVENUE ARE LIABLE TO BE DISMISSED AS A MEASURE FOR REDUCING LITIGATION WHERE THE TAX EFFECT DOES NOT EXCEED THE PRESCRIBED MONETARY LIMIT WHICH IS NOW REVISED AT RS.50 LAKHS. IN THE INSTANT CASE, T HE TAX EFFECT ON THE DISPUTED ISSUES RAISED BY THE REVENUE IS STATED TO BE NOT EXCEEDING RS.50 LAKHS AND THEREFORE APPEAL OF THE REVENUE IS REQUIR ED TO BE DISMISSED IN LIMINE . ITA NO. 2774/AHD/17 [DCIT VS. M/S. EMTICI ENGINEERING LTD.THAKOR] A.Y. 2014-15 - 3 - 4. THE LEARNED DR FOR THE REVENUE FAIRLY ADMITTED T HE APPLICABILITY OF THE CBDT CIRCULAR NO. 17 OF 2019. ACCORDINGLY, APP EAL OF THE REVENUE IS DISMISSED AS NOT MAINTAINABLE. HOWEVER, IT WILL BE OPEN TO THE REVENUE TO SEEK RESTORATION OF ITS APPEAL ON SHOWING INAPPLICA BILITY OF THE AFORESAID CBDT CIRCULAR IN ANY MANNER. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 04/10/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 04/10/201 9