ITAT Delhi dismisses Revenue's appeal on deduction u/s 80IC for AY 2009-10 due to low tax effect.

The ITAT Delhi dismissed the Revenue's appeal challenging the deletion of additions made by the AO regarding disallowance of deduction u/s 80IC for the assessment year 2009-10. The appeal was dismissed based on the tax effect being below Rs.3.00 Lacs, as per instructions and judicial decisions, rendering the appeal not maintainable due to the monetary limit set by the instruction.

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Issues:
1. Disallowance of deduction u/s 80IC.
2. Tax effect below Rs.3.00 Lacs.

Issue 1: Disallowance of deduction u/s 80IC
The Revenue appealed against the CIT (Appeals) order for the assessment year 2009-10, challenging the deletion of additions made by the Assessing Officer (AO) regarding disallowance of deduction u/s 80IC. The grounds of appeal highlighted various aspects, including the failure of the assessee to fulfill basic conditions for claiming the deduction, employing below 10 labor/workers with minimal electricity expenses, absence of a list of employees, questionable machinery purchase, and the nature of gas stove parts purchase and manufacturing activities. The CIT (Appeals) had deleted these additions. The appellant sought to add, amend, or modify the grounds of appeal during the course of the appeal.

Issue 2: Tax Effect below Rs.3.00 Lacs
During the proceedings, the tax effect in the case was found to be less than Rs.3.00 Lacs. The parties were directed to provide the exact tax effect, but no calculations were initially provided. Subsequently, calculations were presented showing the tax involved in the appeal to be Rs.2,63,352/-. The Ld. AR pointed out that as per Instruction No.-3/2011, the tax effect should not include interest, and if interest is excluded, the tax effect remains below Rs.3.00 Lacs. The department confirmed that the tax effect was below the specified limit of Rs.3.00 Lacs as per the Board's instruction. Citing a decision of the Delhi High Court, it was held that the appeal was not maintainable due to the tax impact being less than Rs.10.00 Lacs. Consequently, the department's appeal was dismissed based on the monetary limit set by the instruction.

In conclusion, the ITAT Delhi dismissed the department's appeal without delving into the merits of the case, citing the tax effect being below the specified threshold as per the relevant instructions and judicial decisions.

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