ITO Vs Nanalayja Power Company Ltd. (ITAT Ahmedabad)
In ITO Vs Nanalayja Power Company Ltd., the ITAT Ahmedabad dismissed a Revenue appeal due to its non-maintainability under CBDT Circular No. 09/2024, which prescribes a monetary threshold of ₹60 lakhs for filing appeals before the Tribunal. The appeal pertained to an addition of ₹1.17 crore made by the Assessing Officer (AO) as “Income from Other Sources” under Section 56 of the Income Tax Act, 1961. This addition was based on the interest income earned by the company on temporarily parked project funds. However, the CIT(A) deleted the addition, treating the interest as capital in nature, related to project activities, and adjustable against capital work-in-progress (CWIP).
During the proceedings, the Departmental Representative (DR) acknowledged that the tax effect in the case was below the prescribed threshold, and no exceptions under the CBDT Circular were applicable. Consequently, the Tribunal concluded that the appeal was non-maintainable. This case highlights the enforcement of CBDT guidelines on low tax effect, ensuring efficient case management and judicial resource allocation.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal by the Revenue arises from the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) [hereinafter referred to as “CIT(A)”], dated 11/06/2024, for the Assessment Year (AY) 2014-15, wherein the CIT(A) deleted the addition of Rs.1,17,75,568/- made by the Assessing Officer [hereinafter referred to as “AO”] u/s.56 of the Act in the assessment order passed under Section 143(3) r.w.s. 147 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”], dated 27/11/2019.
