Oswal Salt & Chemical Inds., Gandhidham V. The Dy. Commissioner of Income Tax, Central Circle-2(3), Ahmedabad

CO 109/AHD/2016

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3251 (ITAT-RAJKOT)
• Duration Of Justice: 6 year(s) 1 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-07-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 07-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 268A; 142(2A)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT Before: Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Th e DCIT, Central Circle-2(3), Ah medabad -3 80014 (Appellant) Vs Os wal Salt & Chemical s Industry, Maitri Bh avan, Plot No. 18, Sector No. 8, Gandhid ham-Kutch -3 70201 PAN: AACF K1 906F (Resp ondent) Os wal Salt & Chemicals In ds. , Maitri Bhavan, Plo t NO. 18, Sector No. 8, Gandhidh am- Kutch- 37020 1 PAN: AACF K190 6F (Appellant) Vs The DCIT, Central Circle-2(3), Ah med abad-3800 14 (Resp ondent) Asses see b y : Shri K. C. Thake r, A. R. Revenue by : Shri Aarsi Pra sad, CIT-D. R. Date of hearing : 05-07 -2 022 Date of pronouncement : 10-08 -2 022 IT(SS)A No. 164/Ahd/2016 Assessment Year 2012-13 C.O. No. 109/Ahd/2016 (in IT(SS)A No. 164/Ahd/2016) Assessment Year 2012-13 I.T(SS)A No. 164/Ahd/2016 & C.O. 109/Ahd/2016 A.Y. 2012-13 Page No. DCIT vs. Oswal Salt & Chemical Industry & Oswal Salt & Chemical Industry vs. DCIT 2 आदेश/ORDER PER BENCH:- The appeal filed by the Revenue and the cross objection filed by the assessee are against the order of the ld. Commissioner of Income Tax (Appeals)-12, Ahmedabad in Appeal No. CIT(A)-12/531-534/CC.2(3)/14- 15 vide order dated 22-02-2016 passed for the assessment year 2012-13. 2. The Revenue has raised the following Grounds of Appeal:-s “1. On the facts and in the circumstances of the case and in law, the Ld, CIT(A) has erred in law and/or on facts in deleting the disallowance of Rs.17,91,240/- being loss incurred on account of sale of salt to sister concerns. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting Rs.32,96,505/- on account of washing/handling loss. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs.54,23,861/- being interest payment though the assessee had made interest free advances out of interest bearing funds. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 5. It is, therefore, prayed that the order of the CIT (A) be set aside and that of the A.O. be restored to the above extent. 3. The assessee has raised the following Cross-Objection: I.T(SS)A No. 164/Ahd/2016 & C.O. 109/Ahd/2016 A.Y. 2012-13 Page No. DCIT vs. Oswal Salt & Chemical Industry & Oswal Salt & Chemical Industry vs. DCIT 3 “1. The learned CIT (A) has erred in law and on facts in refusing to expunge the AO's unwarranted observation in the assessment order imputing "non-cooperative attitude" on the part of the appellant holding that there is no positive evidence on record justifying expungement thereof and in holding that no prejudice is caused to the appellant on account of the same, disregarding the material placed on record in the appellate proceedings. 2. The learned CIT (A) has further erred in law and on facts in disregarding the material placed before him and holding that the action u/s. 142(2A) of the Act for assigning the case for, special audit at the fag end of limitation for completion of assessment was not to unlawfully extend the limitation and that the assessment was not barred by limitation due to illegal exercise of invoking S. 142(2A) of the Act.” 4. At the outset, Ld. Counsel for the assessee has submitted vide letter dated 07-06-2022 that he does not wish to press for the Cross-Objection (CO 109/Ahmedabad/2016) for the captioned year and requested that the same may be treated as withdrawn. Accordingly, the Cross-Objection filed by the assessee is dismissed as withdrawn. 5. Now coming to the Department’s appeal, the grievance of the Revenue is that the ld. CIT(A) has erred in deleting disallowance of Rs. 17,91,240/- in respect of loss incurred on sale of flats to sister concerns, deleting disallowance of Rs. 32,96,505/- being expenditure relating to washing / handling losses and deleting addition of Rs. 54,23,861/- being interest payment on loans since the assessee had made interest free advances out interest bearing funds. I.T(SS)A No. 164/Ahd/2016 & C.O. 109/Ahd/2016 A.Y. 2012-13 Page No. DCIT vs. Oswal Salt & Chemical Industry & Oswal Salt & Chemical Industry vs. DCIT 4 6. At the outset, after going through the grounds of appeal and the impugned orders of the Revenue authorities below, a query was raised by the Bench as to applicability and maintainability of the appeal filed by the Revenue in view of CBDT Circular No. 17/2019 dated 8.8.2019 restricting the filling of the appeal by the Revenue where the tax effect is below Rs.50 lakhs, the ld. DR did not dispute the same and submitted that the issue is left to the Tribunal to be decided in accordance with law. 7. It may be noted that on 8.8.2019 the CBDT had issued Instructions bearing No. 17 of 2019 prohibiting its subordinate authorities from filing of the appeal to the Tribunal against the order of the CIT(A) where the tax effect by virtue of the relief given by the CIT(A) is less than Rs.50 lakhs. Further, the CBDT has issued a Directive dated 20th August, 2019 in which it has clarified that the enhanced monetary limits stipulated in Circular No. 17/2019 dated 8th August, 2019 is applicable to all pending SLPs/ appeals/ cross objections/references. In the present case, we observe that the “tax effect” on the total income assessed minus the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issue against which appeal is filed, is less than Rs.50 lakhs. Further, the Revenue has not brought on record anything to demonstrate that the case falls within the ambit of exceptions provided in the Circular. Thus, keeping in view the above CBDT Circular and provisions of section 268A of the Income Tax Act, we are of the view that the present appeal of the Revenue deserves to be dismissed. It is accordingly dismissed. I.T(SS)A No. 164/Ahd/2016 & C.O. 109/Ahd/2016 A.Y. 2012-13 Page No. DCIT vs. Oswal Salt & Chemical Industry & Oswal Salt & Chemical Industry vs. DCIT 5 8. However, it is observed that in case on re-verification at the end of the AO it comes to the notice that the tax effect is more or Revenue’s case falls within the ambit of exceptions provided in the Circular, then the Department will be at liberty to approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed in the Act. In view of the above, the appeal of the Revenue is dismissed due to low tax effect. 9. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 10-08-2022 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 10/08/2022 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order, Assistant Registrar, Income Tax Appellate Tribunal, Rajkot