COMMISSIONER OF INCOME TAX Vs. VISHALAM SESHADRI

JUDGEMENT

(1.) THE Revenue has preferred this appeal challenging the order dated 15.09.2005 in ITA No. 766/Bang/2005 passed by the Income -tax Appellate Tribunal, which has dismissed the appeal of the revenue and affirmed the order passed by the Appellate Commissioner, up -held the claim of the assessee under Section 54 of the Income -tax Act and set aside the order of the Assessing Authority which had declined to grant the deduction. The assessee filed return for the Assessment Year 1996 -97 declaring total income of Rs. 4,49,375/ - and claimed exemption from payment of income -tax under Section 54 of the Act. The same was declined and a sum of Rs. 89,375/ - was levied as tax and a sum of Rs. 2,55,302 was levied as interest and admission was Rs. 3,45,177/ -. The appellate Commissioner in appeal held that the assessee was entitled to the benefit of deduction under Section 54 of the Act, which finding has been up -held by the Tribunal. It is against the said order, the Revenue has preferred an appeal.

(2.) FROM the facts it is clear that the tax effect involved in this appeal Rs. 89,875/ -. The appeal is filed on 07.03.2006.

(3.) INSTRUCTION No. 2/2005 dated 24.10.2005 was issued by the Department to the effect that the appeals are to be only in cases where the tax effect exceeds the mandatory limit of Rs. 4,00,000/ - under Section 260A of the Income -tax Act to the High Court. In fact, the further Instruction No. 5/2007 dated 16.07 2007 is issued clarifying the meaning of the words "Tax Effect". According to the said circular, "Tax Effect" means, 'Tax Excluding Interest'. In this view of the matter, this appeal filed is not maintainable, Accordingly, the appeal is dismissed, in the light of the aforesaid circulars.