ITO Vs R P Develpoers (ITAT Mumbai)
Mumbai ITAT: Interest Under Sections 234B & 234C Excluded While Computing Tax Effect; Revenue’s Appeal Dismissed as Below Monetary Limit
The Mumbai ITAT dismissed the Revenue’s appeal as not maintainable on account of low tax effect, holding that interest levied under sections 234B and 234C cannot be included while computing the “tax effect” for the purpose of CBDT monetary limit circulars. Although the total demand reflected in the assessment was ₹85.65 lakh, the Tribunal noted that ₹42.39 lakh represented consequential interest under sections 234B and 234C, which was not independently in dispute and therefore had to be excluded in terms of CBDT Circular No. 5/2024. After excluding the interest component, the actual tax effect worked out to ₹43.68 lakh, which was below the ₹60 lakh monetary threshold prescribed for filing appeals before the ITAT under CBDT Circular No. 9/2024 issued under section 268A. Accordingly, without examining the merits of the Revenue’s challenge to the deletion of the addition under section 68 relating to alleged accommodation loan entries, the Tribunal dismissed the appeal as not maintainable due to low tax effect.
Cases Discussed
- Ghata Mehandipur Balaji Griding Works (P.) Ltd. Vs. PCIT(Central) (SC), [2024] 169 com730 (SC)
- J. K. Global Vs. ITO (ITAT Mumbai), [2024] 167 com15 (Mumbai-Trib.)
- Siddharth Gupta Vs PCIT (SC), [2023] 150 com399 (SC)
FULL TEXT OF THE ORDER OF ITAT MUMBAI
