TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 301
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....52,213/- made by the Assessing Officer u/s 40(a)(ia) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act']. 3. A perusal of the grievances of the revenue shows that the tax effect would be less than Rs. 50 lakhs and hence both the appeals have to be dismissed in the light of the CBDT Circular No. 17/2019 dated 08.08.2019. 4. The ld. DR vehemently stated that this Circular in not applicable to the existing appeals as it is prospective in nature. 5. In our considered opinion, the language of the Circular 17/2019 dated 08.08.2019 clearly shows that it has referred to the earlier Circular 3/2018 and its amendment dated 20.08.2018 vide which monetary limit for filing of Income tax appeals by the department before the ITAT, Hon'ble High Court, SLP/and appeals before the Hon'ble Supreme Court have been specified. It would be pertinent to refer to the Circular No. 17/2019 which reads as under: "Circular No. 17/2019 New Delhi. 8th August 2019 Subject: - Further Enhancement of Monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court - Amendment to Circular 3 of 2018....
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....fect from the date of issue of this Circular. 5. The same may be brought to the notice of all concerned. 6. This issues under section 268A of the Income-tax Act, 1961. 7. Hindi version will follow." 6. As mentioned elsewhere by Circular 17/2019, the CBDT has further enhanced the monetary limit for filing of appeals and the same is amendment to Circular 3/2018. We find that Clause 13 of Circular 3/2018 reads as under: "The Circular will apply to SLPs/appeals/cross objections /references to be filed henceforth in Hon'ble Supreme Court/Tribunal and it shall also apply retrospectively to pending SLPs/appeals/cross objections/references. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed." 7. In light of the above, we are of the considered opinion that Circular No. 17/2019 shall also apply retrospectively to pending appeals. In that view of the matter, the appeals filed by the Revenue stand dismissed. 8. Coming to the assessee's appeal in ITA No. 1195/DEL/2009 A.Y 2006-07 and cross objection in CO No. 70/DEL/2013 for A.Y 2007-08, facts are that during the assessment proceedings for A.Y 2006-07, the Assessing Officer found tha....
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....e agreement whereby the assessee could cancel the agreement at an early date. It was claimed that the liability arose as per the agreement and, therefore, expenditure should be allowed. 13. Explanation of the assessee did not find any favour with the Assessing Officer who was of the opinion that the trade discount/cash discount mentioned in the agreement is related to trade transaction mentioned in the agreement and gets crystallised only when trade transaction is completed and since the transaction was to be completed in the previous year relevant to A.Y 2007-08, liability on account of trade account got crystallised in A.Y 2007-08 only. Having stated all that, the Assessing Officer found that no actual sale has taken place and the contract of sale has not finally materialised and has been cancelled and, accordingly, proceeded to treat the trade discount in the nature of finance charges/interest payment and invoking the provisions of section 40(a)(ia) of the Act, the Assessing Officer treated the said claim devoid of any tax deducted at source and added the same to the income of the assessee. 14. The assessee carried the matter before the CIT(A) but without any success. 15. ....
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.... an obligation to deduct tax at source under chapter XVIIB of the Act. 21. Since the assessee by way of its cross objection for A.Y 2007-08 has asked for allowance for entire shipment discount of Rs. 2,25,93,901/-, we are of the considered opinion that since the CIT(A) has allowed part of the said discount in A.Y 2007-08, the same should be allowed in full. We, accordingly, dismiss the claim in A.Y 2006-07 and allow the cross objection in A.Y 2007-08. The Assessing Officer is directed to allow the cash discount of Rs. 2,25,93,901/- in A.Y 2007- 08. Grounds Nos. 1 to 1.4 in ITA No. 1195/DEL/2009 are dismissed, while cross objection on this issue in CO No. 70/DEL/2013 is allowed. 22. Coming to Ground No. 2 in A.Y 2006-07, the grievance of the assessee is that the CIT(A) erred in confirming the action of the Assessing Officer by sustaining the disallowance of depreciation on plant and machinery purchased out of surrendered amount of Rs. 3.5 crores. 23. Facts on record show that while scrutinising the return of income, the Assessing Officer found that the assessee has claimed depreciation of Rs. 31,87,500/- is as under: A.Y Agro Profits Repairs to P & M 2000-01 ....
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....th law and hence liable to be rejected. Accordingly, the Assessing Officer disallowed claim of depreciation of Rs. 31,87,500/-. 28. The assessee carried the matter before the CIT(A) and once again explained the facts. 29. After considering the facts and detailed submissions, the ld. CIT(A) observed that in so far as the claim of deprecation on amount disclosed as additional income amounting to Rs. 75 lakhs, which was claimed as revenue expenditure in earlier A.Ys but were disallowed, now the same is treated as capital expenditure. The assessee is entitled for depreciation because the genuineness of the expenditure claimed as repair and maintenance were never doubted. The CIT(A) further observed that the surrender made by the assessee has also been accepted by the department. Accordingly, the CIT(A) directed the Assessing Officer to allow depreciation on the addition of plant and machinery in the respective A.Ys i.e. A.Y 2000-01 to 2005-06 and on the written down value in the year under A.Y 2006-07. 30. As regards claim of depreciation on account of Rs. 3.50 crores, the CIT(A) confirmed the action of the Assessing Officer. 31. Before us, the ld. AR stated that during the cou....