ASST CIT 6 (2)(2), MUMBAI V. ENTRUST MULTITRADE PVT LTD., MUMBAI

ITA 7055/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7124 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 18-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR MENON
• Keywords: Tax effect
• Section: 143(3); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI S. RIFAUR RAHMAN (ACCOUNTANT MEMBER) ITA NO. 7055/MUM/2019 ASSESSMENT YEAR: 2007-08 ASST. COMMISSIONER OF INCOME TAX- 6(2)(2), ROOM NO. 504, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. VS. ENTRUST MULTITRADE PVT. LTD., VINAYAK GOPALE, 3/48, KHOJA SOCIETY GHOPEPDEO ROAD, D.P. WADI, MUMBAI-400033. PAN NO. AABCE 5877 B APPELLANT RESPONDENT REVENUE BY : MR. VIJAY KUMAR MENON, DR ASSESSEE BY : NONE DATE OF HEARING : 03/06/2021 DATE OF PRONOUNCEMENT : 30/08/2021 ORDER PER S. RIFAUR RAHMAN, A.M. THE PRESENT APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, MUMBAI [IN SHORT CIT(A)] FOR THE ASSESSMENT YEAR 2007-08 DATED 13.08.2019 AND ARISES OUT OF ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) 2. CENTRAL BOARD OF DIRECT TAXES (CBDT) VIDE CIRCULAR NO. 17/2019 DATED 08.08.2019 HAS AMENDED CIRCULAR NO. 3/2018 DATED 11.07.2018 FOR FURTHER ENTRUST MULTITRADE PVT. LTD. ITA NO. 7055/M/2019 2 ENHANCEMENT OF MONETARY LIMIT FOR FILING OF APPEALS BY THE REVENUE BEFORE THE ITAT, HIGH COURTS AND SLPS/APPEALS BEFORE SUPREME COURT AS MEASURES FOR REDUCING LITIGATION. 3. CBDT VIDE CIRCULAR NO. 3/2018 DATED 11.07.2018 HAS SPECIFIED THAT APPEALS SHALL NOT BE FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMIT OF RS.20,00,000/- . FOR THIS PURCHASE, TAX EFFECT MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED. FURTHER, TAX EFFECT SHALL BE TAXES INCLUDING APPLICABLE SURCHARGE AND CESS. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDER, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. AT PARA 13 OF THE SAID CIRCULAR, IT HAS BEEN MENTIONED THAT: 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTION/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL ALSO APPLY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. 4. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGATION, CBDT VIDE CIRCULAR NO. 17/2019 HAS FIXED THE MONETARY LIMIT FOR FILING OF APPEALS BEFORE ITAT AT RS.50,00,000/-. 5. IN THE INSTANT APPEAL, THE TOTAL TAX EFFECT IS RS.39,61,885/- AS PER FORM NO. 36. ENTRUST MULTITRADE PVT. LTD. ITA NO. 7055/M/2019 3 6. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FAIRLY AGREES THAT THE TAX EFFECT HEREIN IS BELOW THE MONETARY LIMIT OF RS.50,00,000/- FIXED BY THE ABOVE CIRCULAR FOR FILING OF APPEALS BEFORE THE ITAT. HOWEVER, IT IS PLEADED BY HIM THAT IN CASE OF EXCEPTIONS TO THE ABOVE CIRCULAR, THE APPELLANT MAY BE ALLOWED TO BRING IT TO THE NOTICE OF THE TRIBUNAL. CONSIDERING THE SUBMISSION, WE MAKE IT CLEAR THAT THE APPELLANT SHALL BE AT LIBERTY TO POINT OUT THE EXCEPTIONS TO WHICH THE ABOVE CIRCULAR MAY NOT APPLY BY FILING MISCELLANEOUS APPLICATIONS. 7. IN VIEW OF THE CBDT CIRCULAR NO. 17/2019, THIS APPEAL INVOLVING TAX EFFECT OF LESS THAN RS.50,00,000/- IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/08/2021. SD/- SD/- ( SAKTIJIT DEY ) ( S. RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 30/08/2021 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSISTANT REGISTRAR) ITAT, MUMBAI