IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B , MUMBAI BEFORE SHRI C.N. PRASAD , HONBLE JUDICIAL MEMBER AND SHRI RAJESH KUMAR , HONBLE ACCOUNTANT MEMBER ITA NO . 4824 /MUM/201 7 ( A.Y: 2012 - 13) DCIT CENTRAL CIRCLE 7(3) R.NO. 656, 6 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 V. M/S. NATIONAL STANDARD INDIA LTD. 216, SHAH AND NAHAR INDUSTRIAL ROAD OFF. DR. E. MOSES ROAD , WORLI MUMBAI 400 018 PAN NO: AAACN9808L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AARTI SATHE DEPARTMENT BY : SHRI CHAITANYA ANJARIA DATE OF HEARING : 09.08. 2019 DATE OF PRONOUNCEMENT : 24 .09.2019 O R D E R PER C.N. PRASAD (JM) THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 49 , MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] IN APPEAL NO. CIT(A) - 49 / IT - 76 / 2015 - 16 DATED 26 .04. 2017 FOR THE ASSESSMENT YEAR 201 2 - 13. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL : - 1 (A). 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN D ELETING THE DISALLOWANCE OF .1, 30,80,781/ - MADE 2 ITA NO. 4824/MUM/2017 (A.Y: 2012 - 13) M/S. NATIONAL STANDARD INDIA LTD. BY THE ASSESSING OFFICER ON THE GROUND THAT THE PAYMENT OF THE SAID AMOUNT TO THE CUSTOMERS / BUYERS IN THE CANCELLED PROJECT WAS JUSTIFIED BY COMMERCIAL EXPEDIENCY AND WAS LAID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OF THE ASSESSEE.' 1 (B). 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) FAILED TO APPRECIATE THAT T HE AGREEMENT WITH THE CUSTOMERS /BUYERS IN THE CANCELLED PROJECT DID NOT STIPULATE ANY PAYMENT OF COMPENSATION.' 1 (C) ' ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE HAD CANCELLED THE PROJECT 'LODHA EXCELLENCIA' AND DECIDED TO COME UP WITH A NEW PROJECT BY UTILIZING MO RE FSI AND INCREASING THE SALEABLE AREA AND ON THAT ACCOUNT THE PAYMENT OF COMPENSATION OF RS. 1,30,80,781/ - COULD BEST BE TERMED AS CAPITAL OUTLAY FOR A NEW PROJECT AND HENCE, DISALLOWABLE AS REVENUE EXPENDITURE.' 3. AT THE TIME OF HEARING, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT TAX EFFECT ON THE ISSUE IN THE PRESENT APPEAL IS .40,41,961 / - WHICH IS BELOW . 5 0 LAC S AND IN VIEW OF THE CBDT CIRCULAR N O . 17/2019 DATED 08.08.2019 IN F.NO.279/MISC.142/2007 - ITJ (PT) , THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE. 4. DEPARTMENTAL REPRESENTATIVE ALSO AGREED WITH THE ABOVE SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE . 5. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE GROUNDS OF APPEAL IN THIS APPEAL. WE FIND TH AT THE TAX EFFECT IN THIS APPEAL IS LESS THAN .5 0 LAKHS AND T HEREFORE THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE 3 ITA NO. 4824/MUM/2017 (A.Y: 2012 - 13) M/S. NATIONAL STANDARD INDIA LTD. ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF THE CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019. HENCE TH IS APPEAL IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 24 TH SEPTEMBER, 2019 . SD/ - SD/ - ( RAJESH KUMAR) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 24/ 09/2019 GIRIDHAR, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM