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TMI Blog2023 (2) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 341/RAN/2018 for the AY 2010-11, whereby the learned ITAT has allowed the appeal of the respondent assessee on merit by reversing the order of the CIT appeal. 2. The brief facts of the case lies in a narrow compass. On 15.10.2010 Assesse (Respondent) filed return of income showing total income of Rs.1,00,85,530/-. On 05.03.2013, assessment u/s 143 (3) was completed on total income of Rs.1,61,74,861/- making addition under 5 different heads total amounting to Rs. 60,89,335/-. On 14.02.2014, a letter was issued by the Assistant Commissioner of Income Tax, circle-3, Ranchi wherein it was stated in the last para that the audit objection raised by the revenue audit is not acceptable (Annexure 3 of supplementary affidavit). On 28.07.2014, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to maintainability of this appeal on the ground of tax effect as in view of circular no. 3/2018 dated 11.07.2018 the monetary limit for filing appeal under 260A of the Income Tax Act, 1961 shall be 1,00,00,000/- and above. Pursuant to the aforesaid preliminary objection, learned counsel for the petitioner filed a supplementary affidavit stating therein that the instant appeal comes under exception as enumerated in the aforesaid circular vide Clause No.10(C) i.e. "where revenue audit objection in the case has been accepted by the department." 4. Mr. R. N. Sahay, sr. standing counsel for the revenue submits that though the auditor's objection of the revenue audit objection was not accepted by the then assessing officer, however, for app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the parties and after going through the documents available on record and the different circulars whereby monetary limit for filing appeal under 260A of the Income Tax Act, 1961 has been fixed; it appears that in exercise of powers conferred under section 268A of the Income Tax Act, 1961, the Central Board of Direct Taxes (CBDT), vide its Circular No.3/2018 dated 11.07.2018 read with Circular No. 17/2019 [F. No. 279/MISC. 142/2007-ITJ (PT.)], dated 08.08.2019 has fixed a monetary limit of tax effect of Rs.1,00,00,000/- for filing appeal u/s 260A of the Act by the Income tax department before the High Courts. 8. In the case at hand, the appeal filed by the Revenue in year 2020 against the impugned order dated 20.01.2020, for Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this regard, the audit objection raised by the Revenue audit is not acceptable. But, since, tax effect in this case was more than Rs.2,00,000/-, hence as per para- 3.2(a) of the instruction No. 09 of 2006 and instruction No. 16 of 2013 of the CBDT, New Delhi, necessary direction from the Commissioner of the Income Tax was sought. The Commissioner of Income Tax, Ranchi directed the A.O to send the proposal for revision of assessment u/s 263 of the I.T. Act, 1961. As per direction of the Commissioner of Income Tax, Ranchi proposal for revision of assessment u/s 263 has been submitted." From bare perusal of the aforesaid paragraph it is clear that the Audit Objection was not accepted by the department. However, Commissioner of Income Tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Annexure-3 annexed with the supplementary affidavit under reply, shows that the audit objection raised by the revenue audit against the Original Assessment Order was not accepted by the Assessing Officer. As a matter of fact, there is no mention of any Audit Objection in any of the orders and/or communication issued by the department to the Respondent assessee and /or brought to the notice of ITAT by the department at the time of hearing before it which took place on 07.11.2019 as mentioned in the ITAT order itself at page 32 of the memo of appeal. Further the instant memo of appeal was filed by the department on 26.08.2020 wherein also nothing has been mentioned about any Audit objection having been accepted by the department at any poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT under Section 263 which is annexed as Annexure-A to the supplementary affidavit dated 12.01.2023 passed by the appellant it appears that there is not even a whisper of the audit objection. For brevity, paragraph 1 and 2 are quoted herein below: "In case of M/s. Urmila RCP Projects Pvt. Ltd. Ranchi for the A.Y. 2010-11, an order u/s 143(3) of the Income-tax Act, 1961 was passed on 5/3/2013. On perusal of the assessment record, it was observed that the assessee company has debited an amount of Rs.1,20,77,109/- under the head "Retention Money Deposit" and Rs.29,57,942/- under the head "Security Deposit" in the Profit and Loss Account for the previous year 2009-10 relevant to A.Y. 2010-11. Since deposits are capital in nature, it should n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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