2018 (7) TMI 950 - AT - Income Tax

Maintainability of appeal - tax effect - monetary limit - Held that - Tax effect involved in the present appeal is less than ₹ 20 lacs as stated by the Ld. Counsel of the assessee. Therefore, the present appeal filed by the Revenue is dismissed.

Issues Involved:
1. Legality and correctness of the CIT(A)'s order.
2. Relief granted for unexplained cash deposits in SCB bank account.
3. Relief granted for unexplained cash deposits claimed as gifts.
4. Relief granted for unexplained cash deposits in SBI bank account.
5. Reduction of salary income.
6. Deletion of addition for salary earned in Singapore.
7. Deletion of addition for Short Term Capital Gain.
8. Relief granted for reimbursements.
9. Deletion of addition for deemed rent.
10. Deletion of addition under Section 69C.

Detailed Analysis:

1. Legality and Correctness of the CIT(A)'s Order:
The Department contended that the order of the CIT(A) was "wrong, perverse, illegal and against the provisions of law" and sought its setting aside.

2. Unexplained Cash Deposits in SCB Bank Account:
The CIT(A) allowed relief of ?3,43,000 out of the addition made on account of unexplained cash deposits in the SCB bank account. The Department argued that the CIT(A) ignored the frequent changes in the assessee's stand during the assessment proceedings.

3. Unexplained Cash Deposits Claimed as Gifts:
The CIT(A) allowed relief of ?5,20,000 out of the addition made on account of unexplained cash deposits in the SCB bank account. The Department noted that the assessee initially denied receiving any gifts during the year but later claimed cash gifts of ?4 Lac from his wife and ?1.20 Lac from his mother.

4. Unexplained Cash Deposits in SBI Bank Account:
The CIT(A) allowed relief of ?50,000 out of the addition made on account of unexplained cash deposits in the SBI bank account. The Department highlighted that this SBI account was not disclosed by the assessee to the department.

5. Reduction of Salary Income:
The CIT(A) reduced the salary income by ?63,794. The Department argued that the addition to the salary income was made based on the income depicted by the employer in Form 26AS.

6. Salary Earned in Singapore:
The CIT(A) deleted the addition of ?10,47,149 made in respect of salary earned in Singapore in the last quarter of the financial year 2010-11. The Department contended that the assessee did not disclose this salary income in his ITR or during the assessment proceedings and was a resident in India during the relevant financial year.

7. Short Term Capital Gain:
The CIT(A) deleted the addition of ?24.61 Lakhs on account of Short Term Capital Gain related to the transfer of booking rights in Emerald Floors, Gurgaon. The Department argued that the assessee did not disclose this and it was discovered through the efforts of the assessing officer.

8. Reimbursements:
The CIT(A) allowed relief to the extent of ?1,65,875 out of the disallowance of ?2,17,337 in respect of alleged reimbursements. The Department noted that the assessee initially denied receipt of any amount towards reimbursements.

9. Deemed Rent:
The CIT(A) deleted the entire addition of ?8,40,000 made as deemed rent under Section 23(1) of the IT Act, 1961 for the assessee's three immovable properties.

10. Addition under Section 69C:
The CIT(A) deleted the addition of ?2.00 Lakhs made under Section 69C, which the Department argued was made reasonably for the sprawling erstwhile estate properties having an area of about 13000 sq. ft.

Conclusion:
The Tribunal considered the tax effect involved in the present appeal, which was less than ?20 lakhs, and in view of the CBDT’s Circular No. 3/2008 dated 11th July 2018, dismissed the appeal filed by the Department. The Circular aimed to reduce litigation by specifying monetary limits for filing departmental appeals. The Tribunal concluded that the tax effect in the present appeal was ?17,58,462.76, which was below the specified limit, and thus, the appeal was dismissed.

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