2014 (7) TMI 474 - AT - Income Tax

Maintainability of appeal Amount involved in appeal lower than the limit prescribed - Held that - The decision in CIT vs. Delhi Race Club Ltd. 2011 (3) TMI 1488 - High Court of Delhi followed the tax payable in respect of grounds of appeal by the Department is less than ₹ 3 lakhs and as per revised Instruction of the CBDT No.3 dated 9.2.2011 wherein the CBDT has revised the filing limits for appeal filed before the Tribunal, High Court and Supreme Court - Revenue s appeal is not maintainable in view of the Circular of the CBDT read with Section 268A of the Act thus, the appeal filed by the Department against the order of the CIT(A) is contrary to the policy decision of the Department and as such the appeal filed by the Department is dismissed Decided against Revenue.

Summary

Issues:
1. Whether the CIT(A) was justified in deleting the addition of Rs. 4,20,000/- made on account of notional rent for a farm house.
2. Whether the CIT(A) was justified in deleting the addition of Rs. 40,000/- made under section 24(b) for interest paid on a loan.

Analysis:

Issue 1:
The department appealed against the CIT(A)'s order regarding the addition of notional rent for a farm house. The AR for the assessee argued that the appeal was non-maintainable due to the tax effect being below Rs. 3,00,000, citing CBDT's Instruction No.3/2011. The AR referred to previous orders and a Delhi High Court decision to support dismissal of the appeal. The DR did not dispute the tax effect being below the limit. The ITAT agreed with the AR's contention, citing the CBDT guidelines and the Delhi High Court's decision, and dismissed the department's appeal.

Issue 2:
The second issue involved the addition of Rs. 40,000 under section 24(b) for interest paid on a loan. The ITAT's decision to dismiss the department's appeal was based on the tax payable being less than Rs. 3 lakhs, in line with the revised CBDT filing limits. The ITAT referred to the CBDT's circular and the judgment of the Delhi High Court to support the dismissal of the appeal. The ITAT held that the department's appeal was contrary to the department's policy decision and dismissed it in limine.

In conclusion, the ITAT dismissed the revenue's appeal in both issues, emphasizing the applicability of the CBDT guidelines and the Delhi High Court's decision. The judgment was pronounced on 20th June, 2014.