Central Electronics Ltd., New Delhi vs Department Of Income Tax

The appeal, preferred by the Department, is directed against the order dated 27/11/2013 passed by the CIT(Appeals), VIII, New Delhi in Appeal No. 0271/2011-12 relating to assessment year 2007-08. The sole effective ground raised is as under:-

"1. Whether the Ld. CIT(A) has erred in law and on the facts in deleting the addition amounting to Rs.13,00,194/- on account of prior period expenses made by the A.O by ignoring the fact that he has rightly9 added back the expenses as according to mercantile system of accounting, expenditure should be written in P &L in the year they are incurred not afterward."

2 ITA No. 763/Del/2014 2. The Ld. Counsel for the assessee at the very outset filed before us a calculation of tax effect whichi is reproduced hereunder:-

CALCULATION OF TAX EFFECT Amount (Rs.) Addition disputed before Tribunal 13,00,194/-

Tax @ 30.6%(incl. cess) 3,97,859/-

3. Accordingly, he contended that the tax effect involved in present appeal is below Rs.4 lakhs and, therefore, the appeal filed by the Revenue is not maintainable in view of recent CBDT instruction which is binding on the Departments. Ld. DR did not dispute the calculation of tax effect submitted by the assessee.

4. I have heard rival submissions of the parties and perused the entire material on record. As per recent CBDT Instruction No. 5/2014 dated 10/7/2014, the monetary limit for filing appeal by the department before the ITAT has been revised to Rs. 4 lacs. Thus, the departmental appeals, involving tax effect below Rs. 4 lacs, are not maintainable before the ITAT. 4.1. The Hon'ble Jurisdictional High Court in the case of CIT Vs. Delhi Race Club Ltd. In ITA No. 128/2008, order dated 03/03/2011, by following the earlier order dated 2/8/2010 in ITA No. 179/1991 in the case of CIT Delhi-III Vs. M/s P. S. Jain & Co., has held that such instruction/circular would also be applicable to pending cases.

4.2. Admittedly the tax effect involved in the present appeal is below Rs. 4 lakhs. Therefore, in view of the revised instruction of the CBDT, referred to above, and the Hon'ble Jurisdictional High Court's decision in the case of Delhi Race Club Ltd., supra, the departmental appeal is not maintainable.

5. In the result, departmental appeal is dismissed.

3 ITA No. 763/Del/2014 The order is pronounced in the open court on 22 of June 2015.

Sd/-

(S. V. MEHROTRA) ACCOUNTANT MEMBER Dated:- 22/06/2015

*R. Naheed*

Copy forwarded to:

1. Appellant

2. Respondent

3. CIT

4. CIT(Appeals)

5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

Date

1. Draft dictated on 22.06.2015 PS

2. Draft placed before author .06.2015 PS

3. Draft proposed & placed before the JM/AM second member

4. Draft discussed/approved by Second JM/AM Member.

5. Approved Draft comes to the .06.2015 PS/PS Sr.PS/PS

6. Kept for pronouncement on PS

7. File sent to the Bench Clerk .06.2015 PS

8. Date on which file goes to the AR

9. Date on which file goes to the Head Clerk.

10. Date of dispatch of Order.

4 ITA No. 763/Del/2014