DCIT, New Delhi V. M/s. Study Overseas Global (P) Ltd., New Delhi

ITA 913/DEL/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2767 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 09-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 17-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Tax effect; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 913/DEL/2014 ASSESSMENT YEAR: 2010-11 DCIT, CIRCLE 9(1), VS. M/S STUDY OVERSEAS GLOBAL ROOM NO. 163, (P) LTD., C.R. BUILDING, S-2, LEVEL, BLOCK-3, NEW DELHI INTERNATIONAL TRADE TOWER, NEHRU PLACE, NEW DELHI (PAN: AALCS0438G) ( APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. AMIT KATOCH, SR. D R ASSESSEE BY : MS. ANANYA KAPOOR, A DV. ORDER PER H.S. SIDHU, JM THE DEPARTMENT HAS FILED THIS APPEAL AGAINST THE ORDER DATED 29.11.2013 OF LD. CIT(A)-XI, NEW DELHI PERTAINING TO ASSESSMENT YEA R 2010-11. THE GROUNDS RAISED IN THE REVENUES APPEAL READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1,21,89,908/- MADE BY THE AO ON ACCOUNT OF MANAGEME NT FEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 12,74,019/- WHICH WAS DISALLOWED BY THE AO TREATING THE ADVERTISEMENT EXPENSE OF RS. 25,48,038/- AS CAPITAL EXPENDITURE AFTER ALLOWING DEPRECIATION @ 50%. 3. THE APPELLANT CRAVES TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE HAS DRAWN OUR ATTENTION TOWARDS A LETTER DATED 20.10.2018 FILED B Y HER WHICH IS ON RECORD AND 2 SUBMITTED THAT THE TAX EFFECT IN RESPECT OF THIS AP PEAL IS LOWER THAN THE MONETARY LIMIT FOR TAX EFFECT. SHE ALSO SUBMITTED THAT THE ADDITIONS RAISED IN THE GROUNDS OF APPEAL ARE WRONGLY MENTIONED BY THE DEPARTMENT. HOWEVER, THE ADDITIONS AND THE TAX EFFECT INVOLVED IN THE PR ESENT APPEAL IS AS UNDER:- S.NO. POINT OF ADDITION AMOUNT OF ADDITION 1. MANAGEMENT FEE PAID TO SOIPL 14,56,317/- 2. ADVERTISEMENT EXPENDITURE 12,74,019/- 3. TOTAL ADDITION / DISALLOWANCE 27,30,336/- 4. RATE OF TAX (INCLUDING CESS 3%) 30.9% TAX EFFECT 8,43,674/ - 3. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER OF THE AO, BUT COULD NOT CONTROVERT THE CONTENTION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE TAX EFFECT IN THE PRESENT IS LOWER THAN THE PRESCRI BED LIMIT. 4. AFTER HEARING BOTH THE PARTIES AND ON PERUSING T HE AFORESAID GROUNDS, WE FIND THAT THE ADDITIONS MENTIONED BY THE DEPARTME NT IN ITS GROUNDS OF APPEAL ARE WRONG AND THE ADDITIONS MENTIONED BY THE LD. C OUNSEL FOR THE ASSESSEE AS STATED IN PARA NO. 2 ABOVE ARE CORRECT ONE. THEREFO RE, IN OUR CONSIDERED OPINION, THE TAX EFFECT IN THE REVENUES APPEAL IS LESS THAN RS.10,00,000/-, THEREFORE, THE DEPARTMENTS APPEAL IS NOT MAINTAIN ABLE, IN VIEW OF THE CIRCULAR NO. 21/2015 DATED 10 TH DECEMBER, 2015 ISSUED VIDE F.NO. 279/MISC. 142/2007-ITJ (PT.) BY THE CBDT. FOR THE SAKE OF CO NVENIENCE, THE RELEVANT PARA NOS. 3 & 10 OF THE AFORESAID CBDTS CIRCULAR A RE REPRODUCED AS UNDER:- 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY L IMITS GIVEN HEREUNDER: S NO APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETA RY LIMITS 3 PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTI ONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEA L WAS FILED. 5. IT IS NOT IN DISPUTE THAT THE BOARDS INSTRUCTIO N OR DIRECTIONS ISSUED TO THE INCOME-TAX AUTHORITIES ARE BINDING ON THOSE AUTHORI TIES, THEREFORE, THE DEPARTMENT SHOULD HAVE WITHDRAWN/ NOT PRESSED THE P RESENT APPEAL, IN VIEW OF THE AFORESAID INSTRUCTIONS SINCE THE TAX EFFECT IN THE INSTANT APPEAL IS LESS THAN THE AMOUNT OF RS. 10 LACS, PRESCRIBED IN THE ABOVE SAID CBDTS INSTRUCTIONS. 6. KEEPING IN VIEW THE CBDT INSTRUCTION NO. 21/2015 DATED 10 TH DECEMBER, 2015, WE ARE OF THE VIEW THAT THE REVENUE SHOULD HA VE WITHDRAWN/ NOT PRESSED THE INSTANT APPEAL BEFORE THE TRIBUNAL. WE ARE ALS O OF THE VIEW THAT THE SAID INSTRUCTIONS ARE APPLICABLE FOR THE PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN TRIBUNAL. ACCORDINGLY, THE REVENUES APPEAL IS DISMISSED. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE STAN DS DISMISSED. ORDER PRONOUNCED ON 05.11.2018 SD/- SD/- (N.K. BILLAIYA) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05/11/2018 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, 4 ASSISTANT REGISTRAR