CIT(A) can't be bypassed to file an appeal against a penalty order directly with ITAT

IT: Where Joint Commissioner levied penalty under section 272A(2)(c) upon assessee, penalty order was appealable before Commissioner (Appeals) under section 246A(1)(q) and assessee was wrong in directly filing appeal before Tribunal

Provision of warranty to be allowed if it wasn't excessive as compared to actual exp.

IT: Where estimation of warranty provisions was not excessive as compared to actual expenditure on this account, provision for warranty expenses was to be allowed

Study materials sold separately by coaching institutes to students was not liable to service tax

ST: Study Materials provided/billed/sold separately by coaching institutes to their students are exempt from service tax under Notification No. 12/2003-ST and Circular No. 59/8/2003-ST restricting such exemption only to sale of priced standard text books is void

TP adjustment deleted as assessee substantiated that ALP of transactions was within tolerable limit

IT/ILT: Where in order to prove that international transactions were carried out at arm's length price, assessee had submitted audited segmental accounts in respect of its associated enterprise and non-associated enterprises, in view of fact that on basis of said accounts difference between ALP determined by TPO in respect of AE transactions and ALP charged by assessee was less than 5 per cent, benefits of proviso to section 92C(2) was available to assessee and, therefore, impugned addition made

'Cost of improvement' allowed even if sum paid to contractor even if he failed to carry out such imp

IT: Assessee could not be denied cost of improvement simply because contractors to whom payments were made did not carry out work

Debt investors should plan for the long term

Despite a marketwide unanimity that the Reserve Bank of India (RBI) in its policy review meeting of September 4 will maintain a status quo on key policy rates — the repo and reverse repo rates that determine the rate of interest in the economy — the central bank under a new governor raised rates. RBI also shifted its focus from targeting wholesale inflation (measured by wholesale price index, or WPI) to retail inflation (measured by consumer price index, or CPI).

The twin moves led to a rise in the rate of interest in the economy, fall in bond prices and hardening of yields (bond prices and their yields are inversely related). What is worse is that since RBI is targeting CPI rather than WPI, which was the norm earlier, there is rising expectation that it will raise rates again in its monetary policy review meeting later this month.

For investors who are relatively risk-averse and invest in debt instruments (also called fixed income instruments), this is a moment of uncertainty. This stems from the fact that when there is a chance of rate of interest going up, yields rise and bond prices dip, leading to losses in the portfolio of bond investors. Since mutual fund schemes hold various fixed income instruments in debt funds, the fall in bond prices also pulls down their net asset values (NAVs), leading to losses for investors in those schemes. So the question for debt fund investors is how they should behave in such times.

According to financial advisors and planners, mutual fund investors, whether investing in debt or equity, should always have a long-term approach, which is 5, 10, 15 years or more. So they should not panic or jump to rejig their portfolio just because there is come uncertainty about the rate of interest in the economy at present. "Investors should not rush in to take advantage of the interest rate volatility ," said Raghvendra Nath, MD, Ladderup Wealth Management. In other words, investors should not try to time the market and play the rate of interest game.

"They should plan for the long term and invest in instruments which give about 8-9 % return annually," Nath said. This is because for long-term debt investors , the intervening rate volatility does not matter much. What matters more is the credit risk they would carry in their portfolio while investing for the long term. "Credit risk is a dynamic factor and any risk of downgrade of the debt instruments should be kept in mind while investing for the long term," he said.

The credit risk in a debt instrument is important because in the bond market, if a bond is downgraded then the price of that bond falls because less number of people want to hold that instrument in their portfolio.

The reverse is also true: An upgrade in credit rating leads to a rise in prices of that bond. So it's important to invest in the fixed income instrument of companies with history of stability, a long history and also a track record of stable cash flows. There are quite a few companies which meet all the three criteria and debt investors, who prefer to invest directly, should look at such companies, financial advisors and planners said.

A recent research by HDFC Securities pointed out that generally , the prices of the lower rated debt instruments fall the most during periods of high uncertainty over direction of interest rate movements in an economy in comparison to the highest rated debt instruments. Consequently , mutual fund schemes which have allocated most to these securities see depreciation in their NAVs and end up with lower or negative returns.

However, the report also pointed out that in the last two years, interestingly, debt mutual fund schemes that have invested maximum of assets in "AA & below" rated debt securities outperformed the schemes that hold maximum in "AAA/A1" rated debt securities in the last two years. AAA-rated bonds are the highest rated debt instruments which carry lowest amount of risks while anything rated below has higher risks of investment.

Financial planners also say that if a debt investor invests for the short term, say for a year or two, then he/she will have to carry large price risk as well as re-investment risk with portfolio. Price risk means if there is a downgrade or a rise in the rate of interest in the economy, the price of the debt instrument will fall, leading to a loss in the portfolio.

Re-investment risk is the risk of getting a lower rate of interest when the debt instrument in which the investor is currently invested matures and the money received at maturity has to be invested in other debt instruments that pay rates lower rate.

For example, some of the better debt mutual fund schemes are poised to give about 9-9 .75% return for one year investments. However, if after a year the best of the ones are set to pay about 8%, the investor will have to settle for the lower rate.

Garment Exports Up 15% In September

14-Oct-2013

India's apparel exports grew about 15 per cent to USD 1.1 billion in September this year on the back of a rise in demand in American and emerging markets like Latin America, garment exporters' body AEPC said on Monday.



"The garment demand is growing as buyers are placing orders ahead of the Christmas season. Also, some revival in the US along with emerging markets has contributed to the exports growth in September," Apparel Export Promotion Council (AEPC) chairman A Sakthivel said.



The council had organised fairs last month in New York and Spain and received positive signals on revival in in USA and EU, he added.



The US and Europe together account for about 60 per cent of the country's total apparel shipments. During April-September 2013, garment exports grew 13 per cent at over USD 6.5 billion.



The AEPC said the garment industry is expected to achieve the USD 17 billion target for the current fiscal as the outbound shipments have been growing at a healthy rate. In 2012-13, apparel exports declined by 6 per cent to USD 12.92 billion.



AEPC said it would set up sector skill council for apparel, made-ups, home furnishing, including handloom. In the area of skill development, it has assessed a total number of 5,800 candidates in the 2013-14 (up to September 2013) under a skill development initiative scheme.

Source:- timesofindia.indiatimes.com

Overall Imports Rise By 7Pc In July-August

The country's overall imports grew by nearly 7.0 per cent in the first two months of the current fiscal year (FY), 2013-14, following a 96.81 per cent increase in import of food gains, particularly rice and wheat, officials said.



"The overall imports increased during the period under review mainly due to higher import of food gains, besides capital machinery and intermediate goods," a senior official of the Bangladesh Bank(BB) told the FE Monday.



The actual import in terms of settlement of letters of credit (LCs) increased by 6.80 per cent to US$5.74 billion during the July-August period of FY 14 from $5.37 billion in the corresponding period of the previous fiscal, according to the central bank statistics.



On the other hand, opening of LCs, generally known as import orders, rose by 17.87 per cent to $6.46 billion in the first two months of FY 14 from $5.48 billion in the same period of the previous fiscal.



The actual import of rice jumped by 324.12 per cent to $36.55 million during the July-August period of FY 14 from only $6.26 million in the same period of FY 13, while wheat import increased by 84.93 per cent to $221.42 million from $119.73 million.



"It's a bad signal for our economy. Higher import of food grains will fuel inflationary pressure, if it continues," the central banker explained.



He also said both public and private sectors are now importing rice and wheat to meet the growing demand for the essentials in local market.



"We're importing rice mainly from India and Thailand nearly after two years," the BB official said, adding that the rising trend in rice and wheat import may continue until October this year.



Import of capital machinery or industrial equipment used for production rose by 13.82 per cent to $380.28 million during the period against $334.10 million of the corresponding period of FY 13.



Talking to the FE, another BB official said, higher import for textile, garment and energy and power sectors contributed to raise the overall capital machinery imports.



He also said the rising trend in capital machinery imports will continue, if the political uncertainty is over.



Besides, the entrepreneurs will be encouraged to import more capital machinery for setting up new industries, if the government ensures adequate supply of gas and power, particularly to the industrial areas, he added.



Import of intermediate goods, like - coal, hard coke, clinker and scrap vessels, increased by 17.83 per cent to $570.84 million in the first two months of the current FY from $484.45 million in the corresponding period of the previous fiscal, the BB data showed.



Industrial raw material import rose 11.39 per cent to $2.35 billion during the period under review from $2.11 billion in the same period of the FY 13.



However, import of petroleum products dropped by 26.65 per cent to $563.85 million during the July-August period of FY 14 from $768.76 million in the same period of the previous fiscal.

Source:- thefinancialexpress-bd.com

India Cyclone Not To Hit Rice Exports, Local Supplies

14-Oct-2013

A severe cyclone that hit India's eastern state of Odisha will not hit exports and local supplies of rice, Food Minister K. V. Thomas said on Monday.

"How can it be? Our production is so high. We have ample stocks and that shows India's strength," Thomas said responding to a query whether damage caused by cyclone Phailin would cut rice production in the areas it hit and impact supplies.

India's summer rice crop is expected to be about 92 million tonnes this year, on a par with last year. Stocks in the country, one of the world's largest producers and exporters, were about 21 million tonnes on Sept. 1.

A mass evacuation saved thousands of people from India's fiercest cyclone in 14 years, but aid workers warned a million would need help after their homes and livelihoods were destroyed.

Source:- brecorder.com

Iran-India Relations Will Remain Constrained In The Near Future

14-Oct-2013

As the diplomatic dance continues between Iran and the United States, the rest of the world is keen to work out the implications of a possible rapprochement between Tehran and Washington. One of the countries that is looking very closely at the possible realignment is India.



Like many other states, India will not remain immune from the consequences of the trajectory of US-Iranian ties. New Delhi has long pursued a careful balancing act between its relationships with Tehran and Washington. A potential US-Iran rapprochement will likely ease a lot of the existing diplomatic and economic pressure on India.



But while this will certainly open up new possibilities for Indo-Iranian ties, it is unlikely to resolve all the problems in the Delhi-Tehran relationship.



Despite all the hype surrounding India’s ties with Iran, they remain largely underdeveloped. Also, India’s significant stake in the Arabian Peninsula is often overlooked.



The reality that faces New Delhi in the Middle East today is that India has far more significant strategic interests with the Arab Gulf states than with Tehran. And as tensions rise between the Sunni Arab states and Iran, India’s larger stake in the Arab world will continue to inhibit Indian-Iranian ties.



At the same time, New Delhi’s outreach to Tehran will remain circumscribed by the internal power struggle within Iran, growing tensions between Iran and its Arab neighbours and Iran’s continued defiance of the global nuclear order.



Even with a possible decline in Iran-US tensions, a number of issues will continue to complicate the India-Iran relationship. This was exemplified this month when Iran released an Indian tanker – MT Desh Shanti, owned by the state-run Shipping Corporation of India – along with its 32 seafarers. The ship had been detained for 24 days at Bandar Abbas port on the allegation of pollution.



Iran detained the ship carrying crude oil from Iraq to India on Aug 13, saying it was polluting Iranian water, discharging wastes and water mixed with crude near Iran’s Lavan island. India denied the allegation and underlined that the vessel was not in Iranian waters when it was detained. New Delhi took this incident very seriously and has filed an appeal with the Indian Ocean Memorandum of Understanding on Port State Control – a 16-nation grouping of maritime nations – calling for a review of Iran’s action.



India’s rapid growth and development have drastically heightened its need for energy resources and security, thus attaching urgent importance to relations with countries possessing and producing energy resources. It is largely in this context that India has moved closer to Iran, a country heavily sanctioned by the US throughout the last decade due to its lack of cooperation with international nuclear regulations. Wary of any international support for Iran, the US has pressured India to curb its relations with Tehran and significantly cut its level of oil imports from Iran.



Actions by the US and the European Union have noticeably complicated transactions between Iran and importing nations, particularly India, which has been one of the largest recipients of Iranian oil exports. These complications were well illustrated by the EU sanctions banning European companies from insuring tankers that carry Iranian energy resources anywhere in the world. With nearly all tanker insurance based in western nations, Indian shipping companies are reportedly left to turn to state insurance, which covers tankers for only $50 million (Dh183 million) as opposed to the estimated $1 billion coverage typically offered by European agencies, thus taking greater risk in transportation.



Additionally, western efforts to undermine financial institutions in Iran have complicated payments for Iranian oil exports. An executive order issued by the White House in November 2011 authorises the US secretary of state to impose financial sanctions on any entity failing to satisfactorily curb support of the Iranian market according to American terms. This has pressured countries such as India to reduce imports supporting the Iranian economy.



In an attempt to avoid threatened US sanctions, countries such as India and China are believed to be bartering food products, consumer goods and local currencies for oil – a system that may prove insufficient in meeting the payments necessary to maintain current levels of oil imports. As a result of these pressures, Iran no longer figures among India’s top oil supplies.



The relationship between India and Iran will face challenges in coming years, notwithstanding what happens on the US-Iran front. The two nations have little to bind them together in the current circumstances.



An Iranian-western rapprochement might allow India to expand its economic and energy ties with Tehran and to develop a more productive relationship on Afghanistan. But that is all in the long term. In the short-to-medium term, there are numerous challenges that the two nations will have to navigate.



Harsh V Pant is a reader in international studies at King’s College London

Source:- thenational.ae

China To Boost Imports From India: Vice-Dg China's Trade

India can expect some pruning of the massive trade deficit it has run up with China as the world's largest exporter is looking to boost its imports, in part to help stimulate economies around the world, said Jia Guoyong, Vice-Director General of China's Trade Development Bureau, told reporter in an interview recently.



"China is taking new policy measures to facilitate the importing process. It will further eliminate non-tariff measures, simplify import management measures and shorten import procedures," said Jia Guoyong.



Jia was in India last week leading a 50-strong business delegation, members of which signed 15 memoranda of understanding (MoUs) with various Indian companies for imports worth USD 330 million to China. The delegation's visit was an outcome of Chinese Prime Minister Li Keqiang's trip to India earlier this year.



In view of the global economic slowdown, China, Jia said, had been trying to increase its imports, which help the countries.



"While exports create wealth directly, imports generate long-term interest and give impetus to industrialization and are just as important as exports," Jia said.



China's foreign trade policy has in recent years been moving away from its overwhelming accent on exports towards a balance, by upgrading the mechanism for promoting and adjusting imports.



"By importing more consumer products, for instance, to satisfy the domestic market, China will not only hasten economic recovery but also improve trade imbalances and reduce trade frictions," Jia said.



India's trade deficit with China in the last fiscal was around USD 39 billion that Indian officials describe as "unsustainable" in the long run. India's exports to China in 2012-13 were worth USD 13.53 billion, while imports stood at USD 52.24 billion.



An important import promotion measure consists of continually encouraging Chinese business delegations to explore overseas markets for procurement, like the delegation that Jia has led to India.



A majority of Chinese exporters import raw materials and semi-manufactured goods, and then produce these for overseas markets.



"A priority for us is optimising the import structure by stabilising and guiding the import of bulk commodities, increasing imports of hi-tech equipment as well as of consumer goods," said Jia.



China's imports are of three major kinds. Fifty percent are mechanical and electrical products, 30 percent are high technology items and about 20 percent are bulk commodities.



Jia said while China has a long-term strategy to enhance trade with India, the new import promotion policies were directed at improving the situation with its various trading partners.



"We can now import more consumer products to satisfy the domestic market. It is not that we did not require to import earlier, but now we have more means and money to import that were lacking earlier," Jia said.



Figures from financial service firm Morgan Stanley in September showed Chinese demand for commodities is surging again, confirming the improved recent economic data from China and that the country was stepping up investment in infrastructure. This will be good news for markets supplying commodities to China.



"China will facilitate market access, increase its import capabilities, promote balanced trade and will contribute to the promotion of China-India bilateral trade," added Jia, signing off.

Source:- smetimes.in

Restrictive Supply Policies Pushing Up India’S Coal Imports

14-Oct-2013

Tata Power Co. Ltd’s 1,050 megawatt power station in Jharkhand is a textbook case of the absurd results that India’s 1970s-era coal supply laws can produce, and why power utilities are lobbying the government to change them.



The Maithon power station is located in the heart of India’s vast coal belt, but a shortfall in local fuel supplies has forced Tata to import some of the coal for the plant all the way from Indonesia—an expensive and cumbersome alternative.



The company has a coal mine nearly ready in Odisha, which is meant to feed another power plant whose construction has been held up by government red tape. Tata wants, but has so far not got permission, to use coal from that mine to fire the Maithon plant.



The case underscores how restrictive supply policies helped push up India’s coal imports to a record high of nearly 138 million tonnes in the last fiscal year. India sits on top of the world’s fourth-largest reserves of the fuel, but it has become the third-biggest coal importer after China and Japan, an estimate by the World Coal Association showed.



That is an anomaly India can ill afford, as the government fights to tame a current account deficit (CAD) that hit a record high last year and helped knock the rupee currency to record lows in August.



“At current import prices, we are talking about around $14 billion of coal imports, which is likely to go up to $25 billion by 2016-17,” said Rahool Panandiker, principal at The Boston Consulting Group. “In this context, when there is a focus on reducing the current account deficit to $70 billion, every bit of increased coal production contributes to decreasing the CAD.”

Amid lobbying from private companies, the government set up a committee to look into how to free up supplies of domestic coal, and is due to publish its findings this month. However, interviews with government and company officials suggest that no consensus has emerged about how best to proceed.



“There is a very strong need to augment domestic coal supplies and reduce our dependency on imports,” said the Association of Power Producers (APP), a powerful lobby group that gave a closed-door presentation last month to the power ministry’s top civil servant.

“The need of the hour is a forward-looking policy to maximise domestic coal supply while ensuring adequate incentive for the developer to mine additional coal,” it said in a paper seen by Reuters.



Coal shortages

Prime Minister Manmohan Singh’s administration has pledged to tackle chronic power shortages that hobble the growth of Asia’s third-largest economy. But power companies are saddled with debt. Power stations do not have enough coal or gas to run at full capacity, and state-run distribution companies are too broke to pay for the power that utilities produce.



As a result, despite two decades of rapid economic growth, Indians consume only 900 kilowatt hours (kWh) per capita, compared with 7,000 in Europe and 14,000 in the US, according to a recent note by consultants Bain and Co.



Most of the coal is dug up and doled out to power companies by state-run Coal India Ltd, the world’s largest coal miner, which has struggled to modernise, raise its output and root out corruption within its ranks. Its dominance is a legacy of the socialist policies of prime minister Indira Gandhi’s government in the 1970s that nationalized coal mining.



Such policies have been partly relaxed since that time. For example, instead of buying from Coal India, power producers can be allotted a coal mine of their own, known as a “captive mine”, that they must specifically use for a particular power plant.



But the construction of such plants, such as Tata Power’s plant in Odisha, can snag for years on red tape. That leaves a coal mine that no-one is able to use, while the same company has to buy coal from abroad to make up for shortfalls elsewhere.



Seeking consensus

One policy under discussion in the government committee is to allow companies that have a mine for a power plant that is still under construction to dig out the coal and park it with Coal India, and then take it back later when the plant is ready.



The aim is to help power producers build up a “bank” of coal stocks that would guarantee them a steady supply once the power plant is built. At the same time, Coal India could lend the coal on to another company that is suffering shortages.



Ashok Khurana, director general of the APP, says the policy, known as “Coal Banking”, would reduce companies’ reliance on imports by 25 million tonnes by the fiscal year 2016-2017. That is equivalent to nearly a fifth of India’s total coal imports.



Another proposal under consideration is allowing power producers to mine coal and sell it to Coal India, which would then be able to dole it out to other companies. A further idea, along the lines of Tata’s request, is allowing companies to use coal from private mines to fire power stations elsewhere.



Conversations with stakeholders suggest arriving at a consensus for all policies under consideration could be hard. Officials at both Coal India and at the coal ministry said the “coal banking” concept was impractical.



Sceptics question how Coal India could efficiently store and keep track of the coal it would “bank” for power companies.



“Operationally it’s going to be quite challenging,” said a senior official at a large Indian power company that is suffering acute coal and gas shortages.



“At what rate do you bank (the coal)? At what rate do you take it back? What is the time when you get it back? What happens if at that point of time there is an additional shortage? Would Coal India then deprive its existing customers and give it to them?” the official said.



Allowing companies to sell surplus coal to Coal India is simpler to implement and more likely to see the light of day, sources told Reuters.



However, some—such as Amit Sinha, a partner at Bain and Co.—would like to see the government take a back seat rather than act as a go-between in supplying coal. He compared the prospect of more state involvement to India’s notoriously inefficient system of storing and handing out subsidised food.



“My belief is that government-supported mechanisms tend to have limited impact. They need to be market-facing initiatives where the government provides the framework and then steps away,” Sinha said. “If the government starts to play an active role ... my issue is that it will be very slow, and there will be lots of implementation hurdles that we’ll face.”

Source:- livemint.com

Onions, Diesel Push Up Inflation To 7-Month High; Another Bank Rate Hike Soon?

In festive season, a big damper. Sharply higher food prices - driven by a 323 per cent jump in onion prices, an 89 per cent rise in vegetable prices and a 20 per cent increase in diesel prices - have pushed the wholesale price index, the most widely-watched indicator of inflation in India, to a seven-month high of 6.46 per cent in September from a year earlier.



That is sharply higher than August's level of 6.10 per cent and well above the 5 percent level that the Reserve Bank of India, or RBI, says, is acceptable. This is the fourth straight month that wholesale inflation has remained above the Reserve Bank of India's comfort zone and could add pressure on it to raise interest rates again.



The September wholesale inflation data has reinforced the case for a 25 basis points repo rate hike by the RBI, says A Prasanna, economist at ICICI Securities. The RBI's next policy review is scheduled for October 29.



In September, food articles inflation surged 18.4 percent while fuel price inflation jumped 10.08 percent. Supply disruptions following heavy rainfall in some parts of the country have driven up food prices, particularly vegetable prices, in recent months. A weak rupee, along with increase in fuel prices, has kept upward pressure on inflation. The July wholesale price index was upwards revised to 5.85 percent vs earlier estimate of 5.79 percent.



The retail inflation also remained at elevated levels. The consumer price inflation rose to 9.84 percent in September as compared to 9.52 percent in the previous month.



At its last policy review on September 20, the RBI's new governor Raghuram Rajan had surprised everyone by increasing its main lending rate by 0.25 percent and clearly signaled that the central bank's focus would be on bringing down inflation.

Source:- profit.ndtv.com

Rupee Up, Opens At 61.32 Vs Us Dollar Against Monday's Close Of 61.55

Rupee on Tuesday opened higher at 61.32 vs US dollar against Monday's close of 61.55. The rupee on Monday ended two sessions of gains and fell 48 paise to 61.55 against the dollar after weak inflation and industrial output data amid fresh demand from importers for the US currency.



The decline came even as local equities firmed up amid sustained capital inflows. A weak dollar overseas also failed to stem the rupee's fall, a forex dealer said. Rupee up, opens at 61.32 vs US dollar against Monday\'s close of 61.55 Rupee drops 48 paise to 61.55 against dollar At the interbank foreign exchange market, the rupee resumed lower at 61.15 a dollar from the previous close of 61.07. It then dropped to the day's low of 61.55, a loss of 48 paise or 0.79 per cent.



In the previous two sessions, the currency had gained 86 paise. "The rupee was seen depreciating against the US dollar on Monday due to weak IIP data released on Friday, WPI released and dollar demand," said Abhishek Goenka, CEO of India Forex Advisors. Market will continue to remain volatile amid US debt ceiling issue.



" The government said wholesale price inflation was at a seven-month high of 6.46 per cent in September, compared with 6.1 per cent in August. The index of industrial production grew 0.6 per cent in August compared with 2.8 per cent in July, the government said. The 30-share S&P BSE Sensex climbed 78.95 points. Overseas investors bought shares worth a net Rs 1,010.45 crore on October 11, according to provisional stock exchange data. The dollar index was down 0.14 per cent against a basket of six major global currencies.

Source:- ibnlive.in.com

Extraordinary general meeting cannot be called to discuss authenticity of appointment of directors

CL : Holding of requisite number of shares in company cannot be ground to decide question of impracticability under section 186

Matter remanded as retro amendment to sec. 92C denies treatment of tolerable limit as standard deduc

IT/ILT : Matter remanded for re-adjudication where Commissioner (Appeals) had granted relief to assessee for 5 per cent of margin of international transactions as standard deduction, but a retrospective amendment had been made in section 92C which denied said deduction

Hollow rooms with basic amenities can't be said to be an habitable house; not eligible for sec. 54F

IT: Where alleged house constructed by assessee was not habitable, deduction under section 54F could not be allowed

Exp. incurred for business purposes couldn't be disallowed on an unproven statement

IT : Expenditure incurred for business purpose could not be disallowed on ipse dixit

Delay in filing appeal of before CCE (Appeals) beyond prescribed period isn't condonable, says HC

ST: Since section 85 provides maximum period of condonation before Commissioner (Appeals), there is complete exclusion of application of section 5 of Limitation Act, 1963 and any delay beyond such maximum period is not condonable

HC approves of special audit as trust didn't disclose related party transactions in its audit report

IT: Non-disclosure of related party transactions in audit report under section 12A(1)(b) would warrant special audit

The Asst. Commissioner of Income-tax, Circle-7(1) Hyderabad vs. M/s. Mahaveer Co-op. Urban Bank Ltd., Hyderabad Appellant Respondent a

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH `B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER and SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA No. 1011/Hyd/2013 Assessment year 2004-05 The Asst. Commissioner of vs. M/s. Mahaveer Co-op. Urban Income-tax, Circle-7(1) Bank Ltd., Hyderabad Hyderabad PAN: AACCM7104Q Appellant Respondent Appellant by: Sri Bhanu Prasad Reddy Respondent by: Sri A.V. Raghuram Date of hearing: 01.10.2013 Date of pronouncement: 01.10.2013 ORDER PER CHANDRA POOJARI, AM: This appeal by the Revenue is directed against the order of the CIT(A), Vijayawada dated 22.03.2013 for A.Y. 2004-05. 2. The Revenue raised the following ground: (2) The learned CIT(A) erred in allowing the claim of exemption u/s. 80P(2)(a) of the IT Act, 1961 on interest income earned on investment out of SLR/Non SLR surplus funds which fall under the provisions of section 80P(2)(d) and not section 80P(2)(a). 3. Brief facts of the case are that with regard to the exemption u/s. 80P of the Act, the Assessing Officer has found that the assessee has declared net income of Rs. 35,88,673/- and claimed exemption u/s. 80P of the Act. The income stated to be interest income is earned out of the surplus funds beyond the SLR covered funds i.e., invested in UTI Mutual funds of Rs. 1,40,00,000/- and Rs. 80,00,000/- invested in fixed deposits. The income claimed 2 ITA No. 1011/Hyd/2013 M/s. Mahaveer Co-op. Urban Bank Ltd. ============================== exemption of Rs. 35,88,673/- is nothing but the income earned through the deposits/ investments made in various mutual funds and concerns but not carrying on the business of banking or providing credit facilities to its members or as illustrated u/s. 80P(2) of the Act. As seen from the profit and loss account, the assessee himself treated the interest income earned on surplus funds as 'other income'. In the Profit and Loss A/c., the assessee has admitted income from other sources to the tune of Rs. 40,54,810/- under the head 'other receipts', which clarifies that the income earned and admitted under the head 'other receipts' is not from the operations carried out by the assessee the manner laid down u/s. 80P during the year 2003-04. Further, it is clear that the income admitted under the had 'other receipts' of Rs 40,54,810/- does not attract provisions of section 80P of the Act. Accordingly, the AO has rejected the claim of the assessee u/s. 80P of the Act. On appeal, the CIT(A) decided the issue in favour of the assessee. Against this, the Revenue is in appeal before us. 4. The learned DR submitted that in this case, the issue involved is whether section 80P(2)(a) or 80P(2)(d) is applicable to the case of the assessee. The AO held that the profits derived by the assessee with its deposits under SLR/CRR category only are eligible for deduction u/s. 80P(2)(a). The assessee had deposited Rs. 1.4 crores in mutual funds and Rs. 80 lakhs in fixed deposits. The AO held that the returns on these deposits were not exempt as they had no been derived from core banking activity. The CIT(A) allowed the plea taken by the assessee. In the light of the Supreme Court's decision in the case of CIT vs. Karnataka State Co-operative Apex Bank (251 ITR 194), only interest income on SLR funds has to partake the character of business income. Thus, the assessee's income by way of deposit in non-SLR funds in mutual funds and fixed deposits is not exempt under the provisions of section 80P of the Act. 3 ITA No. 1011/Hyd/2013 M/s. Mahaveer Co-op. Urban Bank Ltd. ============================== 5. On the other hand, the learned AR relied on the judgement of jurisdictional High Court in the case of CIT vs. Andhra Pradesh State Co-operative Bank Ltd. (336 ITR 516) (AP). 6. We have heard both the parties and perused the material on record. We find the same issue was considered by the Andhra Pradesh High Court in the case of CIT vs. Andhra Pradesh State Co- operative Bank Ltd. (cited supra) wherein the High Court held as under: "The provisions of section 80P of the Income-tax Act, 1961 do not make any distinction between the interest earned by deposit in a bank and interest earned on the compulsive deposit made as required under the relevant statute. All the income from banking business referred to under section 80P(2)(a)(i) of the Act would qualify for deduction under the Act. The income earned by the co-operative bank either by deposit of the prescribed percentage of its reserves or by deposit of their surplus funds is exempted. The income from either category of the deposits is certainly attributable to the business of banking. As long as the deposit of the surplus funds in other banks for the purpose of earning interest is not unauthorized or not barred by any of the applicable statutes, the income is certainly attributable to the business of banking. There is no concept of voluntary or non-statutory reserves. When the reserve fund of the society exceeds 25 per cent. of its working capital, the excess could be utilized in the business of the society with the sanction of the Registrar of Co- operative Societies. Further, when a society is prohibited by its bye-laws from borrowing either from its members or others, the whole of its reserve fund may be utilized in its business. If a co-operative bank derives income by lending money to its members, it being business of banking, is eligible for deduction. The statutory liquidity ratio, cash reserve or reserve fund required to be maintained by a scheduled bank or a co- operative bank under the provisions of the Reserve Bank of India Act, 1934, or the Banking Regulation Act, 1949, are all activities which are part of the business of banking. If section 80P(2)(a) of the Act is given a restrictive meaning as including the interest earned only on the statutory deposits made by a co-operative society, it would amount to supplying a casus omissus 4 ITA No. 1011/Hyd/2013 M/s. Mahaveer Co-op. Urban Bank Ltd. ============================== and has to be avoided by the court. Investment of funds by banks including the non-reserves is part of banking activities since no bank: would like its reserve funds to remain idle and not earn any interest. Therefore, the interest earned on such deposits is directly attributable to the business of banking and, therefore, exempt under section 80P(2)(a)(i) the Act." 7. In view of the above discussion, we are inclined to decide the issue in favour of the assessee and the order of the CIT(A) is confirmed. 8. In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on 1st October, 2013 Sd/- Sd/- (SAKTIJIT DEY) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, dated 1st October, 2013 tprao Copy forwarded to: nd 1. The Asst. Commissioner of Income-tax, Circle-7(1), 2 Floor, B-Block, IT Towers, AC Guards, Hyderabad. 2. M/s. Mahaveer Co-op. Urban Bank Ltd., 15-1-503/3, Feelkhana, Hyderabad. 3. The CIT(A), Vijayawada. 4. The CIT-VI, Hyderabad. 5. The DR ­ 'B' Bench, ITAT, Hyderabad

Sri R.V. Chakrapani Hyderabad vs. The Asst. CIT Circle-6(1) Hyderabad Appellant Respondent

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH `B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER and SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA No. 894/Hyd/2012 Assessment year 2007-08 Sri R.V. Chakrapani vs. The Asst. CIT Hyderabad Circle-6(1) PAN: ACBPR3853R Hyderabad Appellant Respondent Appellant by: Sri Inturi Rama Rao Respondent by: Sri D. Sudhakara Rao Date of hearing: 01.10.2013 Date of pronouncement: 01.10.2013 ORDER PER CHANDRA POOJARI, AM: This appeal by the assessee is directed against the order of the CIT-III, Hyderabad dated 30.3.2012 for A.Y. 2007-08. 2. The assessee raised the following grounds: (1) The order of the learned Commissioner of Income Tax-Ill, Hyderabad dated 30th March, 2012 passed u/s 263 of the IT Act is against the law and facts of the case. (2) The Commissioner of Income Tax-Ill, Hyderabad ought not to have assumed jurisdiction u/s 263 in as much as the subject matter of 263 proceedings was duly considered, examined on being satisfied with the explanation offered by the appellant, the Assessing officer had chosen not to make any addition in respect of those items. (3) The learned Commissioner of Income Tax-Ill, Hyderabad ought not to have assumed jurisdiction u/s 263 as the order sought to be revised is not erroneous as the assessment 2 ITA No. 894/Hyd/2012 Sri R.V. Chakrapani ================== order was passed in accordance with the law and the same cannot be branded as erroneous simply because the learned Commissioner of Income Tax-Ill, Hyderabad felt that expenditure amount of Rs. 79,03,201 is not allowable based on surmises, conjectures without bringing any further evidences on record. (4) The learned Commissioner of Income Tax-Ill, Hyderabad ought to have appreciated that, Section 40(a)(ia) is having a retrospective application so that, reasonable deduction can be given to the Section as well. (5) The learned Commissioner of Income Tax-Ill, Hyderabad ought to have appreciated that, the disallowance of expenditure of Rs. 79,03,201/- is not warranted. (6) The learned Commissioner of Income-tax-III, Hyderabad direction to the Assessing Officer to modify the order passed u/s. 143(3) dated 23rd December, 2009 by disallowing the amount of Rs. 79,03,201 is to be quashed. 3. At the outset, the learned AR submitted that similar issue came for consideration before this Tribunal in the case of Sri Madineni Mohan vs. ITO, Suryapet in ITA No. 762/Hyd/2012 order dated 31.5.2013. While deciding the issue in favour of the assessee, the Tribunal observed as follows: "7. We have heard rival submissions and perused the material on record. There is no dispute to the fact that the assessee has deposited the TDS amount on 29-9- 2005 as the Assessing Officer himself has mentioned this fact in the assessment order. An amendment was made to section 40(a)(ia) by Finance Act, 2010 which reads as under After the aforesaid amendment sec. 40(a)(ia) reads as under: "any interest, commission or brokerage, (rent, royalty) fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at 3 ITA No. 894/Hyd/2012 Sri R.V. Chakrapani ================== source under chapter XVII-B and such tax has not been deducted or, after deduction, has not been deducted or after deducting tax has not been paid on or before due date specified in sec. 139(1)." The Hon'ble Calcutta High Court in case of CIT vs. Virgin Creations in judgment dated 23-11-2011 in ITA No.302 of 2011 GA 3200/2011 held that amendment to the provisions of sec. 40(a)(ia) of the Act, by the Finance Act, 2010 would be applicable retrospectively from 1-4-2005. Following the aforesaid decision of Hon'ble Calcutta High Court, different benches of the Tribunal have also held that the amendment brought to section 40(a)(ia) by Finance Act, 2010 would apply retrospectively from 1-4-2005 and if an assessee has deposited the TDS amount before due date of filing of return u/s 139(1), no disallowance can be made u/s 40(a)(ia) of the Act. The orders of the Tribunal relied upon by the learned authorised representative for the assessee also are in the similar line. In the facts of the present case, there is no dispute that the assessee has deposited TDS amount before the due date of filing the return u/s 139(1) of the Act. Hence, in view of the ratio laid down by the Calcutta High Court in case of CIT vs. Virgin Creations (supra) and decisions of different benches of Income-tax Appellate Tribunal, we hold that the assessee having deposited TDS amount before the due date of filing the return u/s 139(1) no disallowance can be made by invoking the provisions contained u/s 40(a)(ia) of the Act. Accordingly, we direct the Assessing Officer to delete the addition of Rs. 1,37,56,960/-." 4. On the other hand, the learned DR relied on the order of the CIT. 5. We have heard both the parties and perused the material on record. Admittedly, the same issue came before this Tribunal in the case of Madineni Mohan (cited supra) wherein the issue was decided in favour of the assessee. Further, the Karnataka High Court in the case of ITO vs. Anil Kumar & Co. (354 ITR 170) held as follows: "It is not in dispute that on the date the assessee deducted the tax, he had no pay/remit the money 4 ITA No. 894/Hyd/2012 Sri R.V. Chakrapani ================== within seven days from that date and if the amount is actually paid when the credit is given, then the tax is payable within two months. In the instant case, assessee did not comply with the legal requirement; therefore, the Assessing Authority was justified in making the disallowance, but on the date the appeal was filed, the section came to be amended, giving retrospective benefit. Therefore, the appellate authority extended the benefit of the amended provision and held that the disallowance is paid and the order has been upheld by the Tribunal. By Finance Act, 2008 which is given retrospective effect from 1.4.2005, the benefit of that provision had been extended to the assessee, though no fault was found with the assessment order passed initially. With change of law, when the effect of the amendment is to give benefit to the assessee, the appellate authority and the Tribunal were justified in extending the said benefit. Thus, order passed by the Tribunal is in accordance with law and does not call for interference. Therefore, the substantial question of law is answered in favour of the assessee and against the revenue." 6. Further, the Gujarat High Court in the case of CIT vs. M/s. J.K. Construction Co. in Tax Appeal No. 706 of 2010 held as follows: "Plainly speaking, assessee had to make deduction before 31st March of the year in question and as long as such amounts were deposited before last date of filing of the return, requirements of law would be fulfilled. It was on this basis that Tribunal was of the opinion that the assessee committed no wrong and was, therefore, entitled to seek deduction of Rs. 32,94,149/- from the income which amount the assessee had deducted from payments of contractors and had also deposited with Revenue before the last date of filing of the return. We do not find any illegality in order of Tribunal. Tax Appeal is therefore, dismissed." 7. Further, this Tribunal in the case of DCIT vs. M/s. Liquidz India Pvt. Ltd. in ITA No. 835/Hyd/2013 order dated 28.8.2013 held as follows: 5 ITA No. 894/Hyd/2012 Sri R.V. Chakrapani ================== "7. We have heard both the parties and perused the materials on record as well as gone through the orders of the authorities below. As held by the Delhi High Court in the case of CIT vs. Rajinder Kumar in Income st Tax Appeal No. 65/2013 dated 1 July, 2013, the impugned amendment to section 40(a)(ia) permits remittance of TDS to the Central Government account on or before the due date of filing return of income u/s. 139(1) of the Act is retrospective in nature. Same view has been taken by the jurisdictional High Court in the case of CIT vs. PEC Electricals Pvt. Ltd., in ITA No. 263 of 2013 dated 12.7.2013. The assessee in present case paid the TDS to the Central Government account before filing the return of income and the same is to be allowed as held by the above judgements. Accordingly, we do not find any infirmity in the action of the CIT(A) in directing the Assessing Officer to delete the addition made u/s 40(a)(ia) of the Act and, therefore, the order of the CIT(A) is hereby upheld on this count. This ground raised by the Revenue in this regard is dismissed." 8. In view of the above discussion, we are inclined to hold that when the assessee, though deducted TDS before 31st March of the previous year relevant to the assessment year and paid the same in to the Central Government Account before the due date of filing of return of income, the expenditure cannot be disallowed u/s. 40(a)(ia) of the Act. In the present case, there is no dispute regarding the payment of TDS amount in to the Central Government account before the due date of filing the return of income of the assessee. Being so, exercising the power u/s. 263 of the Act by the CIT on this issue is not justified. Accordingly, the grounds raised by the assessee are allowed. 9. In the result, appeal of the assessee is allowed. st Order pronounced in the open court on 1 October, 2013 Sd/- Sd/- (SAKTIJIT DEY) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, dated 1st October, 2013 tprao 6 ITA No. 894/Hyd/2012 Sri R.V. Chakrapani ================== Copy forwarded to: 1. Sri R.V. Chakrapani, c/o. P.R. Datla & Co., Chartered Accountants, 6-3-788/A/9, First Floor, Durga Nagar, Ameerpet, Hyderabad-500 016. 2. The Asst. Commissioner of Income-tax, Circle-6(1), Hyderabad. 3. The CIT-III, Hyderabad. 4. The Addl. CIT, Range-6, Hyderabad. 5. The DR ­ 'B' Bench, ITAT, Hyderabad

M/s AML Steel Ltd., No.9, 6th Street, Gopalapuram, Chennai - 600 086. vs. The Deputy Commissioner of Income Tax, Company Circle I(1), Chennai - 600 034.

IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. No. 1538/Mds/2013 (Assessment Year : 2006-07) M/s AML Steel Ltd., The Deputy Commissioner of No.9, 6th Street, Gopalapuram, Income Tax, Chennai - 600 086. v. Company Circle I(1), Chennai - 600 034. PAN : AAACA 4304 Q (Appellant) (Respondent) Appellant by : None Respondent by : Shri Guru Bashyam, JCIT Date of Hearing : 01.10.2013 Date of Pronouncement : 01.10.2013 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : When this appeal was called up for hearing, none appeared on behalf of assessee. Despite issue of notice to the address given in Form No.36, no authorized person had appeared on behalf of the assessee. In the circumstances, we are of the opinion that the assessee is not interested in prosecuting the case. Following the decision of the Delhi Bench of the Tribunal in the case of CIT v. 2 I.T.A. No. 1538/Mds/13 Multiplan (India) Ltd. (38 ITD 320) (Del), we dismiss this appeal filed by the assessee, for non-prosecution. 2. In the result, the appeal filed by the assessee is dismissed. Order was pronounced in the Court on Tuesday, the 1st of October, 2013, at Chennai. sd/- sd/- (V.Durga Rao) (Abraham P. George) Judicial Member Accountant Member Chennai, Dated the 1st October, 2013. Kri. Copy to: (1) Appellant (2) Respondent (3) CIT(A)-VI, Chennai (4) CIT-IV, Chennai (5) D.R. (6) Guard file

Ms. Maulli Ganguly Income Tax Officer - 11(1)(2) B-503/4, 5th Floor Mumbai Above Pizza Hut, Lokhandwala Vs. Complex, Andheri (W) Mumbai 400053

IN THE INCOME TAX APPELLATE TRIBUNAL "B" Bench, Mumbai Before Shri D. Manmohan, Vice President and Shri Sanjay Arora, Accountant Member ITA No. 143/Mum/2011 (Assessment Year: 2006-07) Ms. Maulli Ganguly Income Tax Officer - 11(1)(2) B-503/4, 5th Floor Vs. Mumbai Above Pizza Hut, Lokhandwala Complex, Andheri (W) Mumbai 400053 PAN - ADTPG2381E Appellant Respondent Appellant by: Mrs. Sanjukta Chowdhury Respondent by: Durgesh Sumrott Date of Hearing: 07.10.2013 Date of Pronouncement: 07.10.2013 ORDER Per D. Manmohan, V.P. This appeal is filed at the instance of the assessee and it pertains to A.Y. 2006-07. 2. The only ground raised before us reads as under: - "The ld. CIT(A) erred in holding that notice u/s. 143(2) issued by affixture had been duly made without appreciating that third party evidence as furnished by the Appellant does not suggest that the said notice was served as received by the appellant, the impugned Order may be quashed." 3. Facts necessary for disposal of the appeal are stated in brief. For the year under consideration the assessee declared professional receipt of `22,41,700/- as an Actress and net income of `9,08,907/- after debiting various expenses. Having regard to the circumstances of the case the AO disallowed certain expenses and determined the total income at `10,41,230/-. Aggrieved, assessee contended before the first Appellate Authority that the adhoc disallowance made by the AO is not in accordance 2 ITA No. 143/Mum/2011 Ms. Maulli Ganguly with law. Jurisdiction of the AO in completing the assessment under section 143(3) of the Act, without proper service of notice under section 143(2), was also challenged before the first Appellate Authority. It was contended before the CIT(A) that the notice issued under section 143(2) of the Act was not served upon the assessee and, therefore, time barred. In the absence of due service of valid notice the assessment has to be treated as null and void. 4. The learned CIT(A) observed that the assessee's Authorised Representative appeared from time to time and various details were also filed but the case of the assessee was that notice served through assessee's servant by affixture of notice, without any enquiry, will not amount to due service of notice. An affidavit was filed stating that notice under section 143(2) was not served on her nor was the said notice affixed at her residence. Assessee also filed an unauthenticated copy, purportedly from the Society's Register, to state that on 31.10.2007 no one from the Department visited the premises to serve the notice by affixture. The learned CIT(A) observed that the Ward Inspector, Ms. S.J. Pamale, had served the notice by affixture on 31.10.2007 in the presence of Inspector Ms. Poornima and considering the fact that the assessee normally does not receive any post on her own and she is unavailable at the residence for long spells, service of notice by affixture is proper. 5. Further aggrieved, assessee is in appeal before us. The learned counsel for the assessee submitted that there is no proper proof of service of notice. On the other hand, the learned D.R. furnished a copy of the letter dated 20.11.2008 of the Income Tax Officer to submit that service of notice by means of affixture was properly carried out in the light of provisions of section 143(2) of the Income Tax Act and hence the proceedings are not barred by limitation. In fact the assessee's representative appeared from time to time. 6. We have carefully considered the rival submissions and perused the record. The AO categorically submitted that the Inspector had served the notice by affixture on 31.10.2007. The only objection of the learned counsel is that the Visitor's Register does not contain the name of the Inspector. It 3 ITA No. 143/Mum/2011 Ms. Maulli Ganguly deserves to be noticed that an Income Tax Inspector visiting the society's premises would not ordinarily be treated as a "Visitor" since he/she has gone on official duty and for mere affixture it cannot be expected that the Watchman would ensure recording their names in Visitor's Register. It also deserves to be noticed that the A.R. appeared from time to time in response to the notice, which also shows that the notice was served by affixture. Considering the overall circumstances of the case we are of the view that the order passed by the learned CIT(A) does not call for any interference. We, therefore, affirm the order of the learned CIT(A) and dismiss the appeal filed by the assessee. Order pronounced in the open court on 7th October, 2013. Sd/- Sd/- (Sanjay Arora) (D. Manmohan) Accountant Member Vice President Mumbai, Dated: 7th October, 2013 Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) ­ 3, Mumbai 4. The CIT­ 11, Mumbai City 5. The DR, "B" Bench, ITAT, Mumbai By Order //True Copy// Assistant Registrar ITAT, Mumbai Benches, Mumbai n.p.

D C I T - 1(1) M/s. Bharat Containers P. Ltd. Room No. 597, Aayakar Bhavan 1st Floor, Cecil Court M.K. Road, Mumbai 400020 Vs. Mahakavi Bhushan Marg Mumbai 400039

IN THE INCOME TAX APPELLATE TRIBUNAL "B" Bench, Mumbai Before Shri D. Manmohan, Vice President and Shri Sanjay Arora, Accountant Member ITA No. 8213/Mum/2010 (Assessment Year: 2006-07) D C I T - 1(1) M/s. Bharat Containers P. Ltd. Room No. 597, Aayakar Bhavan Vs. 1st Floor, Cecil Court M.K. Road, Mumbai 400020 Mahakavi Bhushan Marg Mumbai 400039 PAN - AAACB0484G PAN - AAACB0484G Appellant Respondent Appellant by: Dr. Durgesh Sumrott Respondent by: S/Shri K. Gopal & Satendra Pandey Date of Hearing: 07.10.2013 Date of Pronouncement: 07.10.2013 ORDER Per D. Manmohan, V.P. This appeal is filed by the Revenue against the order dated 19.07.2010 passed by the CIT(A)-1, Mumbai and it pertains to A.Y. 2006-07. 2. Revenue has raised the following grounds of appeal: - "1. On the facts and circumstances of the case, the CIT(A) erred in law, in directing to allow claim of expenses against income from other sources disallowed by the AO." 2. The CIT(A) has further overlooked the fact that the assessee has not established the nexus of expenses with reference to the income earned from other sources." 3. The learned counsel for the assessee submitted that the tax effect in the instant case works out to `2,10,289/-. As per CBDT circular No. 3 dated 09.02.2011 an appeal should not be preferred by Revenue unless the tax effect is above `3,00,000/- or the issue arising out of the order of the first Appellate Authority is exceptional in nature and it is specifically mentioned in the authorisation. In the absence of showing that the case falls under 2 ITA No. 8213/Mum/2010 M/s. Bharat Containers P. Ltd. exceptional circumstance the appeal filed by Revenue deserves to be dismissed as unadmitted. 4. On the other hand, the learned D.R. submitted that the appeal is duly authorised by the Commissioner of Income Tax and hence the AO was justified in filing the appeal. 5. We have carefully considered the rival submissions and perused the record. In the light of the circular issued by the CBDT (supra), which is binding upon the Revenue authorities, this appeal deserves to be dismissed as unadmitted for want of tax effect and we order accordingly. Order pronounced in the open court on 7th October, 2013. Sd/- Sd/- (Sanjay Arora) (D. Manmohan) Accountant Member Vice President Mumbai, Dated: 7th October, 2013 Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) ­ 1, Mumbai 4. The CIT­ 1, Mumbai City 5. The DR, "B" Bench, ITAT, Mumbai By Order //True Copy// Assistant Registrar ITAT, Mumbai Benches, Mumbai n.p.

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