{"id":4672,"date":"2012-04-09T09:41:56","date_gmt":"2012-04-09T09:41:56","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=4672"},"modified":"2012-04-09T09:42:38","modified_gmt":"2012-04-09T09:42:38","slug":"cit-vs-varsha-dilip-kohle-bombay-high-court-low-tax-effect-circular-is-retrospective-dept-must-show-cascading-effect","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/cit-vs-varsha-dilip-kohle-bombay-high-court-low-tax-effect-circular-is-retrospective-dept-must-show-cascading-effect\/","title":{"rendered":"CIT vs. Varsha Dilip Kohle (Bombay High Court)"},"content":{"rendered":"\n\n
Click here to download the judgement (varsha_low_tax_effect.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nLow Tax Effect Circular is retrospective & dept Must Show \u201cCascading Effect\u201d
\n<\/strong><\/p>\n

The department filed an appeal in the year 2010 where the tax effect was Rs. Rs.6,69 lakhs. The issue raised was whether deduction of interest payment on funds introduced in the firm, (in the form of loan), could be allowed against remuneration received from the firm. In response to the point whether Instruction No.3 of 2011 dated 9.2.2011<\/a><\/strong> issued by the CBDT which states that appeals should not be filed where the tax effect was less that Rs. 10 lakhs, the department argued that (i) as the appeal had been filed prior to the issuance of the circular, the circular did not apply and (ii) as the appeal had a \u201ccascading effect<\/em>\u201d involved a \u201ccommon principle\u201d, the appeal could not be dismissed in view of the Supreme Court\u2019s verdict in Surya Herbals<\/a><\/strong>. HELD dismissing the appeal:<\/p>\n

In CIT vs. Polycott Corp<\/strong> 138 ITR 144 (Bom) & CIT vs. Vijaya V. Kavekar<\/strong>, it was held that Circular No.3 of 2011 has retrospective operation and applies even to pending cases<\/strong>. As regards Surya Herbals<\/strong>, the appeal does not involve any \u201ccascading effect<\/em>\u201d as the department has not shown whether there are other appeals which raise the same point.<\/p><\/blockquote>\n

\nSee also: CBDT’s lettr dated 2.9.2011<\/a> & Virgo Marketing<\/a><\/strong> (SC)\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

In CIT vs. Polycott Corp<\/strong> 138 ITR 144 (Bom) & CIT vs. Vijaya V. Kavekar<\/strong>, it was held that Circular No.3 of 2011 has retrospective operation and applies even to pending cases<\/strong>. As regards Surya Herbals<\/strong>, the appeal does not involve any \u201ccascading effect<\/em>\u201d as the department has not shown whether there are other appeals which raise the same point.<\/p>\n

Read more ›<\/a><\/div>\n

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