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2014 (1) TMI 1546 - AT - Income TaxAddition made u/s 68 of the Act Bogus transactions - Held that - The Board s instruction No. 5/2008 dated 15-5-2008 is referred wherein monetary limits and other conditions for filing departmental appeals (In Income- tax matters) before Appellate Tribunal, High Courts and Supreme Court were specified - an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above - Filing of appeal in such cases is to be decided on merits of the case - The instruction will apply to appeals filed on or after 9th February 2011 - The present appeal has been filed by department on 21.10.2011 and the tax effect in this appeal is Rs.2,89,860/-, and the instructions of CBDT are applicable and the appeal filed by department is liable to be dismissed as the tax effect in this appeal is below Rs.3 lakhs Decided against Revenue.
Issues:
- Appeal against order of ld. CIT(A) for assessment year 2003-04 regarding addition under section 68 of the IT Act. - Applicability of CBDT Instruction No.3 of 2011 for filing departmental appeals based on monetary limits. - Dismissal of appeal by ITAT Mumbai due to tax effect below prescribed limit. Analysis: Issue 1: Appeal against order of ld. CIT(A) The Department filed an appeal against the order of ld. CIT(A) for the assessment year 2003-04, challenging the deletion of an addition made under section 68 of the IT Act. The grounds of appeal mentioned that the ld. CIT(A) erred in deleting the addition, citing that the transaction was deemed bogus as per the admission of a concerned individual during a search, indicating that the sale of shares never occurred. Issue 2: Applicability of CBDT Instruction No.3 of 2011 The ITAT Mumbai considered the applicability of CBDT Instruction No.3 of 2011, which specified monetary limits for filing departmental appeals in income-tax matters before Appellate Tribunal and other superior courts. The instruction outlined that appeals should not be filed solely based on the tax effect exceeding the monetary limits, emphasizing the need to assess each case on its merits. The tax effect was defined as the difference in tax liability between the total income assessed and the reduced income related to the disputed issues. Issue 3: Dismissal of appeal by ITAT Mumbai Given that the tax effect in the Department's appeal was below the prescribed limit of Rs.3 lakhs, as per the CBDT Instruction, the ITAT Mumbai dismissed the appeal. The decision was based on the specific monetary limits outlined in the instruction, highlighting that appeals must meet the threshold to be considered for further proceedings. Consequently, the appeal by the Department was dismissed by the ITAT Mumbai on the grounds of the tax effect falling below the specified limit. In conclusion, the judgment by the ITAT Mumbai in this case revolved around the dismissal of the Department's appeal due to the tax effect not meeting the monetary limit set by the CBDT Instruction. The analysis considered the specific grounds of appeal against the order of ld. CIT(A) and the application of the monetary limits for filing appeals in income-tax matters. The decision underscored the importance of adhering to the prescribed limits and assessing each case on its individual merits before initiating further legal proceedings.
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