2019 (3) TMI 1672

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....e submissions of the Ld.DR and pointed out that as per CBDT Circular No. 3/2018 dated 11th July, 2018, the monetary limit for filing of appeal by the Department before the Tribunal is Rs. 20 Lakhs, therefore, the appeal filed by the Department is not maintainable. 4. We have perused the case records and heard the rival contentions. Undisputedly, the tax effect in present appeal is less than Rs. 20 Lakhs. The CBDT circular No.3/2018 dated 11th July, 2018 has raised the monetary limit of tax effect for filing of appeal by the Department before the Tribunal to Rs. 20 Lakhs. The circular applies to the appeals to be filed by the Department in future, as well as the appeals pending before the Tribunal. Thus, in view of the CBDT circular, we are of the opinion that the present appeal of the Revenue is liable to be dismissed on account of low tax effect. Before parting, we clarify here that the Revenue shall be at liberty to approach the Tribunal for restoration of appeal/s with the requisite submissions indicating that the appeals are protected by the exceptions prescribed in para 10 of the Circular (supra). 5. In the result, appeal of the Revenue is dismissed. ITA No.2225/PUN/20....

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....y the decision of the Co-ordinate Bench of Pune Tribunal in ITA No.1914/PUN/2018 for the assessment year 2015-16. 9. We have perused the case records and considered the judicial pronouncements placed before us. That in ITA No.1914/PUN/2018, the Assessing Officer (AO) observed that the assessee was holding closing stock of one office building and one showroom. Invoking provisions of section 23(4) of the Income-tax Act, 1961 (hereinafter also called 'the Act'), the AO opined that the Annual Letting Value of the property was required to be determined and added to the assessee's total income. The assessee's contention that two units in respect of which "Income from house property" was proposed to be computed, were its stock in trade and hence, no income could be determined thereon under this head, did not find favour with the Revenue Authorities. With regard to these issues, the Co-ordinate Bench of the Pune Tribunal has held as follows: "4. I have heard the rival submissions and perused the relevant material on record. It is an undisputed fact that the assessee, a Builder and Developer, was holding two properties as its stock in trade, from which the deemed rental income has been....

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....e case of Chennai Properties (supra) shows the correct position of law'. That is how, their Lordships held that the income was to be charged to tax under the head "Profits and gains of business or profession". 5. In view of the foregoing discussion, it is apparent that the view point bolstered by the authorities that Annual Letting Value in respect of unsold properties lying with the assessee as a stock in trade, should be determined u/s. 23 of the Act, cannot be countenanced in the hue of the later judgments of the Hon'ble Summit Court. Once it is held that the income of a Builder in respect of letting out of the properties is chargeable under the head "Profit and gains of business or profession", the provisions enshrined in Chapter IV-D get magnetized and not those under the head "Capital gains". It is no doubt true that section 23 of the Act deems the determination of income from house property, which is not let out, but it is equally trite that a deeming provision cannot be extended beyond its ambit, so as to cover the heads of income or the sections, to which it does not operate. My attention has not been drawn by the ld. DR towards any specific provision under Chapter IV-D....

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....utual funds and an explanation in this regard was sought. The assessee submitted that the interest bearing funds were not used for making such investments hence, disallowance u/s.14A was not warranted. The Assessing Officer noticed that the assessee was not maintaining separate pool of funds for its normal business and for investments from which the exempt income was earned, therefore, the provisions of section 14A were invoked and disallowance as per Rule 8D was determined at Rs. 54,161/-. 12. That before the Ld. CIT(Appeals), the Ld. AR of the assessee submitted that the disallowance ought not to have been more than the exempt income and the working of the Assessing Officer is based on estimates. The assessee further stated that the Assessing Officer has not demonstrated any satisfaction in this regard as to the incorrect working of the assessee and there is no interest bearing loan and accordingly, u/s.14A be not applicable. The Ld. CIT(Appeals) upheld the addition made by the Assessing Officer relying on the decision of the Hon'ble Bombay High Court in the case of Godrej & Boyce reported as 328 ITR 81 (Bom.) which authorizes the Assessing Officer to recompute the disallow....