The DCIT, Circle-4(1)(1), Ahmedabad V. Tiger Surgical Disposable Pvt. Ltd., Ahmedabad

MA 29/AHD/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3391 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-07-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-07-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 30-05-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V.K. SINGH
• Keywords: Tax effect; Tax effect

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘C’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SMT.SUCHITRA KAMBLE, JUDICIAL MEMBER Misc.Application No.29/Ahd/2022 IN ITA No.1395/Ahd/2019 Assessment Year :2012-13 DCIT, Cir.4(1)(1) Ahmedabad. Vs. Tiger Surgical Disposable P.Ltd. Plot No.80/4, Phase-1 GIDC, Vatva Ahmedabad. PAN : AABCT 9663 N (Applicant) (Respondent) Assessee by : Shri M.S. Chhajed, AR Revenue by : Shri V.K. Singh, Sr.DR स ु नवाई क तार ख/Date of Hearing : 29/07/2022 घोषणा क तार ख /Date of Pronouncement: 29/07/2022 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER The present Misc.Application filed by the Revenue seeks recall of the order passed by the ITAT in the Revenues appeal in ITA No.1395/Ahd/2019 for Asst.Year 2012-13 dated 03-12-2021, dismissing the appeal on account of tax effect involved in the same falling within the limit prescribed for withdrawal of appeals filed by the Revenue before the ITAT ,by the CBDT Circular No.17 of 2019 dated 8.8.2019. 2. The contention of the Department is that the tax effect involved in the present appeal exceeded the monetary limit prescribed by the CBDT in this regard. The application states as under: MA No.29/Ahd/2022 2 “2. On perusal of the order it is seen that ITA No. 1395/Ahd/2019 for A.Y.2012-13 departments has filed appeal before Hon’ble ITAT on following ground: (i) "that the Id. CIT(A) has erred in law and on facts in deleting the addition of Rs.51,76,167 /- made to the net profit of the assessee. " (ii) "Whether the Id. CIT(A) has erred in law and on facts in allowing loss of (-)Rs.3,14,72,613/-. " 3. The Hon’ble ITAT has decided appeals of the assessee in ITA No. 1395/Ahd/2019 for A.Y. 2012-13. In which the Hon’ble ITAT has dismissed the appeal of the Revenue due to low tax effect as per CBDT's Circular No. 17/2019 dated 08.08.2019 (amendment of Circular No. 3/2018 dated 11.07.2018). On verification of record, it is noticed that the tax effect was not properly calculated. The assessee had filed ITR declaring loss of Rs.3,14,72,613/-. The AO rejecting books of accounts and also rejecting loss of Rs.3,14,72,613/- estimated the net profit at Rs.51,76,167/-. Hence, the effect of the order implied net addition of Rs.3,66,48,780/-. The tax effect on this addition comes to Rs. 1,13,24,473/-. Further, the CIT(A) has directed the AO that instead of estimating the net taxable income at 10% of the turnover, to add 20% of the value of the closing stock of Rs.2,90,14,269/- and to re-compute the total income accordingly. Therefore, as per order of CIT(A), there will be addition of Rs.58,02,853/- ( being 20% of Rs.2,90,14,269/-), whereas the effective total addition made by the AO was Rs.3,66,48,780/-. Hence, there is reduction of Rs.3,08,45,927/- (3,66,48,780 -58,02,853) in the addition made by the AO after giving effect to the order of CIT(A). The tax effect on this deleted addition of Rs. 3,08,45,927/- will be Rs.95,31,391/-, which is more than the limit (50 lakhs) prescribed vide CBDT circular No. 17 of 2019 dtd. 08.08.2019 to file appeal before Hon’ble ITAT. 4. The above mistake is apparent on record. Therefore, it is requested that the Hon’ble ITAT may kindly rectify the mistake and pass necessary order accordingly. It is requested to restore department appeal in ITA No. 1395/Ahd/2019 for A.Y. 2012-13 and adjudicate the same on merits.” 3. Referring to the application it was pointed out by the Ld.DR that while the assessee had declared loss of Rs.3,14,72,613/- in its return filed, the AO had estimated net profit at Rs.51,76,167/- which implied a net addition of Rs.3,66,48,780/- involving tax effect of Rs.1,13,24,473/-. He pointed out that the ld.CIT(A) had directed the AO to add 20% of the value of the closing stock of Rs.2,90,14,269/-, to the losses returned by the assessee, resulting in addition of only Rs.58,02,853/-, whereas as per the AO, the addition was of Rs.3,66,48,780/-. He therefore contended that the MA No.29/Ahd/2022 3 ld.CIT(A) had reduced the addition made by the AO by Rs.3,08,45,927/-, the tax effect of which was Rs.95,31,391/- which was more than the limit prescribed by the CBDT ,of Rs.50 lacs, to file appeal before the Tribunal. 4. The ld.counsel for the assessee was unable to controvert the above contentions of the Revenue. 5. We have heard both the parties and have also gone through the order of the Ld.CIT(A) and we find merit in the contention of the Ld.DR that the tax effect involved in the appeal of the Revenue, in which the present Misc. application has been filed, exceeded Rs.50 lacs, i.e the limit prescribed for withdrawing appeals filed by the Revenue before the ITAT on account of low tax effect involved. 6. Undeniably the assessee had returned losses of Rs.3,14,72,613/- ,which the AO had assessed by estimating profits @ 10% of the turnover after rejecting the Books of the assessee. Therefore in effect an addition of Rs. 3,66,48,780/- was made by the AO ,involving tax effect of Rs.1,13,24,473/-, as rightly pointed out by the Ld.DR. we have also noted that the Ld.CIT(A) had rejected the dismissal of books of accounts by the AO ,and after accepting the Book results had directed adjustment to the closing stock declared of Rs.2,90,14,269/-, enhancing its value by 20% ,thus resulting in addition of Rs. 58,02,853/- to the returned losses. We agree with the Ld.DR that the Revenue was in effect aggrieved with the deletion of addition, in effect, of Rs. 3,08,45,927/- (Rs.3,66,48,780 -Rs. 58,02,853) ,involving tax effect of Rs. 95,31,391/- which was more than the limit prescribed by the CBDT of Rs.50 lacs, to file appeal before the Tribunal. MA No.29/Ahd/2022 4 7. In view of the above, we agree with the ld.DR that the tax effect involved in the present appeal exceeded Rs.50 lakhs, and therefore, was not liable to be dismissed on account of low tax effect. Therefore, there is clearly a mistake in the order passed by the ITAT dismissing the appeal of the Revenue on account of low tax effect involved, and the same is therefore hereby recalled for fresh adjudication on merit on 4 th August, 2022. 8. The order was pronounced in the Open Court in the presence of both the parties. No separate notice to be issued to the parties. 9. In the result, MA of the Revenue is allowed. Order pronounced in the Court on 29 th July, 2022 at Ahmedabad. Sd/- Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER