DCIT, New Delhi V. M/s. Modland Wears Pvt. Ltd., New Delhi

ITA 5896/DEL/2015

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4233 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 30-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR MAHAR
• Assessee Lawyers: TARUNDEEP SINGH
• Keywords: Tax effect
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI R.S.SYAL, HONBLE VICE PRESIDENT AND SHRI LALIET KUMAR, ACCOUNTANT MEMBER ITA NO.5896/DEL./2015 (ASSESSMENT YEAR : 2012-13) DCIT, MODLAND WEARS PVT. LTD. CIRCLE -17 (1), VS. S-137, 2 ND FLOOR, ROOM NO. 308, GREATER KAILASH-II 3 RD FLOOR, C.R.BUILDING, NEW DELHI I.P.ESTATE NEW DELHI. (PAN : AAACM0216F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. TARUNDEEP SINGH, ADV. REVENUE BY : SHRI MANOJ KUMAR MAHAR, SR. DR DATE OF HEARING : 09.10.2018 DATE OF ORDER : 09.10.2018 O R D E R PER LALIET KUMAR, ACCOUNTANT MEMBER : 1. THE PRESENT APPEAL IS FILED BY THE REVENUE CHALL ENGED THE ASSESSEE ON THE FOLLOWING GROUNDS :- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 35,49,267/- MADE BY THE AO ON ACCOUNT OF DISALL OWANCE U/S 14A OF THE INCOME TAX ACT, 1961 (THE ACT) READ WITH RULE 8D OF THE INCOME TAX RULES, 1962 (THE RULES)? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) IS JUSTIFIED IN DELETING ADDITION OF RS. 35,49,267/- MADE BY THE AO UNDER CLAUSE (II) AND (I II) OF RULES 8D2 OF THE RULES WITHOUT CONSIDERING A FACT THAT IN TEREST EXPENDITURE OF RS. 21,03,16,800/- DURING THE YEAR U NDER ITA NO. 5896/DEL./2015 2 CONSIDERATION WAS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICULAR INCOME AND RECEIPTS? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) IS JUSTIFIED IN NOT INVO KING CLAUSE (II) OF RULE 8D2 OF THE RULES EVEN WHEN THE ASSESSE E DID NOT FURNISH ANY EVIDENCE TO SUPPORT A SELF SERVING CLAI M THAT INTEREST BEARING FUNDS WERE NOT USED IN MAKING INVE STMENT IN SHARES? 4. THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS A ND IS NOT TENABLE ON FACTS AND IN LAW. 2. AS PER THE CBDT CIRCULAR NO.3/2018 DATED 11 TH JULY, 2018 VIDE WHICH THE REVENUE HAS BEEN DIRECTED NOT TO PRE FER ANY APPEAL IN CASE THE TAX EFFECT IS LESS THAN RS.20,00,000/- AND THIS FACTUAL POSITION HAS BEEN FAIRLY CONCEDED BY THE LD. D.R. THE LD. A.R. CONTENDED THAT THE APPEAL OF THE REVENUE MAY BE DIS MISSED IN THE LIGHT OF CBDT CIRCULAR (SUPRA). 3. AFTER PERUSING THE MATERIALS AVAILABLE ON RECOR D, WE FIND THAT THE AMOUNT DISPUTED BEFORE US IS BELOW THE TAX EFFE CT LIMIT PRESCRIBED BY CBDT VIDE CIRCULAR NO. 3/2018 DATED 1 1.07.2018 FOR PREFERRING APPEALS BEFORE TRIBUNAL BY THE REVEN UE. ON PERUSAL OF THE CIRCULAR NO. 3/2018 DATED 11.07.2018 AND THE MA TERIALS AVAILABLE ON RECORD, LD. SR. DR COULD NOT POINT OUT AS TO HOW AND WHY SUCH A CIRCULAR IS NOT APPLICABLE TO THE FACTS OF THE CASE. WE ALSO FIND THAT THE CIRCULAR MAKES IT VERY CLEAR THA T THE REVISED MONETARY LIMITS SHALL APPLY RETROSPECTIVELY TO PEND ING APPEALS ALSO. WE FIND THAT THE CIRCULAR IS BINDING ON THE TAX AUT HORITIES. HENCE, WE HOLD THAT THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED IN TERMS OF LOW TAX EFFECT VIDE CIRCULAR NO. 3/2018 DA TED 11.07.2018. ACCORDINGLY, THIS BEING A LOW TAX EFFECT CASE, WE D ISMISS THIS ITA NO. 5896/DEL./2015 3 APPEAL OF REVENUE IN LIMINE, AS UNADMITTED, WITHOUT GOING INTO THE MERITS OF THE CASE. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON THIS 09 TH OCTOBER, 2018. SD/- SD/- (R.S.SYAL) (LA LIET KUMAR) VICE PRESIDENT ACCOUNTANT MEMBER DATED 09/10/ 2018 BR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI. DATE OF DICTATION 09.10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 09 .10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 09.10.2018 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 09.10.2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 09.10.2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 09.10.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 09.10.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .10.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER