REVA PROPERTIES LIMITED, MUMBAI V. DCIT CC-5(1), MUMBAI

CO 183/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4776 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 28-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAUDHURY ARUN KR SINGH
• Assessee Lawyers: J PRABHAKAR
• Keywords: Tax effect; Set aside; Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 2587/MUM/2018 ASSESSMENT YEAR: 2013-14 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(3)(2), ROOM NO.609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400005. VS. SYNERGY PROPERTIES & INVESTMENT INDIA P. LTD, C/O. SAKSHI GALLERY, 6/19, II FLOOR, GRANTS BLDG, ARTHUR BUNDER ROAD, COLABA, MUMBAI- 400005. PAN NO. AAA CS5222P APPELLANT RESPON DENT CO. NO. 183/MUM/2018 [ARISING OUT OF ITA NO. 2587/MUM/2018] ASSESSMENT YEAR: 2014-15 SYNERGY PROPERTIES & INVESTMENT INDIA P. LTD, C/O. SAKSHI GALLERY, 6/19, II FLOOR, GRANTS BLDG, ARTHUR BUNDER ROAD, COLABA, MUMBAI-400005. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(3)(2), ROOM NO.609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400005. PAN NO. AAACS5222P APPELLANT RESPOND ENT REVENUE BY : SHRI CHAUDHURY ARUN KR. SINGH, SR. DR ASSESSEE BY : MR. J. PRABHAKAR, AR DATE OF HEARING : 08/08/2019 DATE OF PRONOUNCEMENT : 05/11/2019 ITA 2857/MUM/2018 & CO. 183/M UM/2018 SYNERGY PROPERTIES & INVESTMENT INDIA PVT. LTD. 2 ORDER PER N.K. PRADHAN, AM THE CAPTIONED APPEAL FILED BY THE REVENUE IS DIREC TED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APP EALS)-8, MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT U /S.143(3) OF THE INCOME TAX ACT, 1961 [HEREINAFTER THE ACT]. ON THE OTHER HAND, CROSS OBJECTION FILED BY THE ASSESSEE SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 2. WE NOTICE THAT THERE ARE TWO PRIMARY ISSUES IN T HE INSTANT CASE. THE FIRST ONE RAISED BY THE REVENUE PERTAINS TO THE ORD ER DATED 28.11.2016 OF THE LD. CIT(A) WHICH HAS BEEN SET ASIDE BY THE ITAT VIDE ORDER DATED 21.04.2017 WITH A DIRECTION THAT THIS IS A CASE OF NON-DEPRECIABLE ASSET WHICH DOES NOT ATTRACT THE PROVISIONS OF SECTION 5 0 OF THE ACT AND THE CONSEQUENTIAL ORDER PASSED BY THE LD. CIT(A) DATED 05.02.2018. THE SECOND ISSUE IS THE SUBMISSION BY THE ASSESSEE THAT THE TAX EFFECT IN THIS CASE IS BELOW THE MONETARY LIMIT FIXED BY THE CIRCU LAR ISSUED BY CBDT FOR NOT FILING APPEAL BEFORE THE TRIBUNAL. LET US FIRST DISCUSS THE APPLICABILITY OF THE SAID CIRCULAR. ITA NO. 2587/MUM/2018 ASSESSMENT YEAR: 2013-14 3. CENTRAL BOARD OF DIRECT TAXES (CBDT) VIDE CIRCULAR NO. 17/2019 DATED 08.08.2019 HAS AMENDED CIRCULAR NO. 3/2018 DA TED 11.07.2018 FOR FURTHER ENHANCEMENT OF MONETARY LIMIT FOR FILING OF APPEALS BY THE ITA 2857/MUM/2018 & CO. 183/M UM/2018 SYNERGY PROPERTIES & INVESTMENT INDIA PVT. LTD. 3 DEPARTMENT BEFORE THE ITAT, HIGH COURTS AND SLPS/AP PEALS BEFORE SUPREME COURT AS MEASURES FOR REDUCING LITIGATION. 4. CBDT VIDE CIRCULAR NO. 3/2018 DATED 11.07.2018 HAS SPECIFIED THAT APPEALS SHALL NOT BE FILED BEFORE THE INCOME TAX AP PELLATE TRIBUNAL (ITAT) IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE M ONETARY LIMIT OF RS.20,00,000/-. FOR THIS PURCHASE, TAX EFFECT MEA NS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED. FURTHER, TAX EFFECT SHALL BE TAXES INCLUDING APPL ICABLE SURCHARGE AND CESS. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THER EON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED A DDITIONS. IN CASE OF PENALTY ORDER, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. AT PARA 13 OF THE ABOVE CIRCULAR, IT HAS BEEN MENTI ONED THAT: 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTION/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL AL SO APPLY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES. P ENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRA WN/NOT PRESSED. ITA 2857/MUM/2018 & CO. 183/M UM/2018 SYNERGY PROPERTIES & INVESTMENT INDIA PVT. LTD. 4 5. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGAT ION, CBDT VIDE CIRCULAR NO. 17/2019 HAS FIXED THE MONETARY LIMIT F OR FILING OF APPEALS BEFORE ITAT AT RS.50,00,000/-. 6. IN THE INSTANT APPEAL FILED BY THE REVENUE, THE TAX EFFECT ON THE AMOUNT IN DISPUTE IS RS.12,00,636/-, AS PER THE FOL LOWING CALCULATION: TAX EFFECT WORKINGS; RS. ''ADDITIONS MADE ON CAPITAL GAINS- AS SHORT TERM AS SET 7,80,20,322 LESS ; GAINS ADMITTED AS LONG TERM ASSET 6,60,13,970 BALANCE IN DISPUTE 1,20,06,352 TAX ON ADDITIONS MADE (INCOME ASSESSED) @ 30 % 36, 01,06 LESS TAX ON DISPUTED ISSUE BEING @ 20% 24,01,270 TAX EFFECT (DIFFERENCE) 12,00,636 THEREFORE, THE LD. COUNSEL FOR THE ASSESSEE SUBMIT S THAT THE APPEAL FILED BY THE REVENUE BE DISMISSED. THE LD. DR FAIRLY AGREES WITH THE ABOVE CALCULATION OF TAX EFFECT 7. IN VIEW OF THE CBDT CIRCULAR NO. 17/2019, THIS APPEAL INVOLVING TAX EFFECT OF LESS THAN RS.50,00,000/- IS DISMISSED AS WITHDRAWN. 8. IN THE CROSS OBJECTION, THE ASSESSEE SUPPORTS TH E ORDER PASSED BY THE LD. CIT(A). AS THE APPEAL FILED BY THE REVENUE HAS BEEN DISMISSED AS DISCUSSED HEREINABOVE, THE CROSS OBJECTION BECOMES ACADEMIC IN NATURE. ITA 2857/MUM/2018 & CO. 183/M UM/2018 SYNERGY PROPERTIES & INVESTMENT INDIA PVT. LTD. 5 9. TO SUM UP, THE APPEAL FILED BY THE REVENUE AND T HE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.11.2019 SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 05/11/2019 S. SAMANTA, P.S (ON TOUR) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (ASSISTANT REGISTRAR) ITAT, MUMBAI