Case Number: ITA 628/DEL/2019
Appellant: ACIT, Circle-1(1), New Delhi
Respondent: A.K.M. Enterprises Pvt. Ltd., Jalandhar
Assessment Year: 2013-14
Result: 2013-14
Case Filed On: 2019-01-29
Order Type: Final Tribunal Order
Date of Order: 2022-02-17
Pronounced On: 2022-02-17
The case of ACIT vs A.K.M. Enterprises Pvt. Ltd. in the Income Tax Appellate Tribunal (ITAT) for the assessment year 2013-14 revolves around the dismissal of the Revenue’s appeal due to low tax effect. This article provides an in-depth analysis of the case, the proceedings, and the final judgment that led to the dismissal of the appeal.
A.K.M. Enterprises Pvt. Ltd., the respondent in this case, faced scrutiny from the Income Tax Officer (ITO), Circle-1(1), New Delhi. The Assessing Officer (AO) rejected the books of accounts of the assessee under section 145 of the Income Tax Act, 1961, on the grounds of non-production of supporting vouchers/documents. Consequently, several additions were made to the assessee’s income, including profit from the food court ‘Gigabite’, expenses on the purchase of magazines, suppression of scrap sale, and expenses on employee benefits.
The assessee challenged these additions before the Commissioner of Income Tax (Appeals)-5, Ludhiana (CIT(A)), who provided relief to the assessee by deleting the additions. Dissatisfied with the CIT(A)’s order, the Revenue filed an appeal with the ITAT.
The appeal was heard by the ITAT Bench ‘A’, New Delhi, comprising Sh. Anil Chaturvedi, Accountant Member, and Sh. Anubhav Sharma, Judicial Member. The hearing was conducted through video conferencing due to the ongoing pandemic restrictions. The case was heard on 17.02.2022, and the order was pronounced on the same day.
The Revenue raised several grounds of appeal, challenging the CIT(A)’s acceptance of the assessee’s books of accounts and the deletion of various additions. However, the Learned Authorized Representative (AR) for the assessee, Shri S.K. Bhardwaj, argued that the total tax effect in the Revenue’s appeal was Rs. 37,16,217/-, which is below the monetary limit of Rs. 50 lakhs prescribed by the Central Board of Direct Taxes (CBDT) vide Circular No. 17/2019 dated 08.08.2019. Hence, the appeal should be dismissed on this ground.
The Senior Departmental Representative (Sr. DR), Ms. Suman Malik, admitted that the tax effect in the present case was less than the monetary limit prescribed by the CBDT for filing an appeal.
After considering the submissions and examining the material on record, the ITAT found that the tax effect involved in the appeal was indeed below the Rs. 50 lakhs threshold set by the CBDT. The Tribunal noted that the CBDT, in its Circular No. 3/2018 dated 11.07.2018 and Circular No. 17/2019 dated 08.08.2019, had increased the monetary limits for filing appeals before the ITAT and other authorities to reduce litigation and focus on high-value cases.
In the absence of any material placed on record by the Revenue to demonstrate that the issues in the present appeal fell under the exceptions provided in the CBDT Circular dated 11.07.2018, the ITAT held the appeal to be not maintainable on account of low tax effect. The Tribunal, however, allowed the Revenue the liberty to seek revival of the appeal if there was any error in the computation of the tax effect or if for any reason the CBDT Circular was not applicable.
In conclusion, the ITAT’s decision in the case of ACIT vs A.K.M. Enterprises Pvt. Ltd. for the assessment year 2013-14 highlights the importance of adhering to prescribed monetary limits for filing appeals. The dismissal of the Revenue’s appeal due to low tax effect underscores the need for accurate computation and consideration of tax effects before pursuing litigation. This case serves as a reference for similar disputes, emphasizing the significance of following CBDT guidelines in tax adjustments and related appeals.
Order pronounced in the open court on 17.02.2022 by the Accountant Member Sh. Anil Chaturvedi and the Judicial Member Sh. Anubhav Sharma.
Source: Income Tax Appellate Tribunal Delhi Bench ‘A’, New Delhi
Disclaimer: This article provides a general overview of the case and is not a substitute for professional legal advice. For detailed information, readers are encouraged to refer to the official case documents and consult with a qualified legal professional.
ACIT vs A.K.M. Enterprises Pvt. Ltd.: Tax Dispute for AY 2013-14 Dismissed Due to Low Tax Effect
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