M/s Nahar Exports Ltd., Ludhiana V. DCIT, Ludhiana

CO 36/CHANDI/2011

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8907 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 4 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-06-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 19-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAI KARAN SINGH
• Assessee Lawyers: J S NAGAR
• Keywords: Audit objection; Tax effect
• Section: 115JB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACOCUNTANT MEMBER ITA NO. 312/CHD/2011 ASSESSMENT YEAR 2007-08 THE DCIT, VS M/S NAHAR EXPORTS LTD, CIRCLE-VII, LUDHIANA LUDHIANA & C.O. NO. 36/CHD/2011 (IN ITA NO. 312/CHD/2011) ASSESSMENT YEAR 2007-08 M/S NAHAR EXPORTS LTD, VS THE DCIT, CIRCLE VII, LUDHIANA LUDHIANA PAN NO. AAACN5708K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI J.S.NAGAR RESPONDENT BY : SHRI JAI KARAN SINGH DATE OF HEARING : 11.09.2013 DATE OF PRONOUNCEMENT : 13.09.2013 ORDER PER BHAVNESH SAINI, JM THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-II LUDHIAN A DATED 21.1.2011 FOR ASSESSMENT YEAR 2007-08. 2. THE REVENUE IN DEPARTMENTAL APPEAL HAS CHALLENGE D THE DELETION OF ADDITION OF RS. 10,48,390/- OUT OF ADDITION OF RS. 31,45,172/- MADE ON ACCOUNT 2 OF DISALLOWANCE OUT OF EXPENSES. THE ASSESSEE IN T HE CROSS OBJECTION CHALLENGED THE PART ADDITION MAINTAINED BY THE LD. CIT(A). 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUT SET SUBMITTED THAT AS PER ASSESSMENT ORDER, AFTER MAKING THE DISALLOWANCE OF EXPENSES, THE TOTAL TAXABLE INCOME OF THE ASSESSEE WAS COMPUTED AT RS. 1,01,42, 797/- ON WHICH TOTAL TAX PAYABLE WAS RS. 21,32,691/-. HE HAS FURTHER SUBMIT TED THAT ASSESSEE IS A COMPANY AND ACCORDING TO COMPUTATION U/S 115JB, TH E BOOK PROFIT WAS TAKEN AT RS. 7,24,07,057/- AND TAX WAS PAYABLE AT RS. 81,24, 073/-, THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER AS WAS PARTLY RESTRIC TED BY THE LD. CIT(A) HAS BECOME MEANINGLESS. HE HAS SUBMITTED THAT ASSESSE E HAS ALREADY PAID MORE TAX ON MORE TAXABLE INCOME ACCORDING TO SECTION 115JB O F THE INCOME TAX ACT HE HAS ALSO FILED COPY OF THE DEMAND NOTICE U/S 156 OF THE INCOME TAX ACT FOR ASSESSMENT YEAR UNDER APPEAL IN WHICH THE ASSESSING OFFICER HAS RAISED NIL DEMAND. THE LD. COUNSEL FOR THE ASSESSEE, THEREFOR E, SUBMITTED THAT THE TAX EFFECT IN THE DEPARTMENTAL APPEAL IS LESS THAN RS. 3 LAKHS, THEREFORE, DEPARTMENTAL APPEAL IS LIABLE TO BE DISMISSED AS IS FILED AGAINST CBDT INSTRUCTION NO. 3 OF DATED 9.2.2011. 4. ON THE OTHER HAND, THE LD. DR DID NOT DISPUTE T HAT TAX EFFECT IN THIS APPEAL IS BELOW RS. 3 LAKHS BUT SUBMITTED THAT AS P ER PARA 8 OF THE ABOVE CIRCULAR, THE DEPARTMENTAL APPEAL COULD BE FILED BU T HE WAS NOT ABLE TO SATISFY AS TO WHICH OF THE CLAUSE OF THE CIRCULAR ARE APPLI CABLE IN THIS CASE. 5. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT IN CASE DEPARTMENT APPEAL IS DISMISSED, HE WOULD BE WITHDRAWING THE CR OSS OBJECTION. 6. ON CONSIDERATION OF THE ABOVE FACTS, WE ARE OF T HE VIEW THAT DEPARTMENTAL APPEAL IS NOT MAINTAINABLE IN THE PRESENT FORM. ACC ORDING TO CBDT INSTRUCTION 3 NO.3 DATED 9.2.2011, THE DEPARTMENTAL APPEAL SHALL NOT BE BEFORE TRIBUNAL IN THE CASE WHERE THE TAX EFFECT DOES NOT EXCEED THE MONET ARY LIMIT OF RS. 3 LAKHS. THE DEPARTMENTAL APPEAL IS FILED IN THE OFFICE OF THE T RIBUNAL ON 23.3.2011, THEREFORE, THIS CIRCULAR IS APPLICABLE TO THE DEPAR TMENTAL APPEAL. IT IS NOT IN DISPUTE THAT THE TAX EFFECT IN THE DEPARTMENTAL APP EAL IS LESS THAN RS. 3 LAKHS, THEREFORE, AS IS EXPLAINED BY THE LD. COUNSEL FOR T HE ASSESSEE, THE APPEAL OF THE REVENUE IS FILED IN CONTRAVENTION OF THE ABOVE CBDT CIRCULAR AND IS THUS NOT MAINTAINABLE. THE LD. DR REFERRED TO THE PARA 8 OF THE ABOVE INSTRUCTION, WHERE DEPARTMENTAL APPEAL COULD HAVE BEEN FILED IF THE TA X EFFECT IS BELOW RS. 3 LAKHS BUT THE CONDITIONS OF PARA 8 ARE NOT SATISFIED IN T HIS CASE BECAUSE THE SAME RELATES TO THE FILING OF THE DEPARTMENTAL APPEAL EV EN IF THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT IF THE CONSTITUTIONAL VALIDITY O F ANY PROVISION OF THE ACT OR RULE ARE UNDER CHALLENGE OR WHERE ANY BOARD CIRCUL AR ARE HELD TO BE ILLEGAL OR ULTRA VIRES OR WHERE REVENUE AUDIT OBJECTION IN TH E CASE HAS BEEN ACCEPTED BY THE DEPARTMENT. NONE OF THE ABOVE CONTENTIONS ARE SATISFIED IN THIS CASE, THEREFORE, DEPARTMENTAL APPEAL IS NOT MAINTAINABLE AND THE SAME IS ACCORDINGLY DISMISSED. THE LD. COUNSEL FOR THE ASSESSEE ALSO WI THDREW THE CROSS OBJECTION ACCORDINGLY. THE SAME IS THEREFORE, DISMISSED AS W ITHDRAWN. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT ON 13/09/2013 SD/- SD/- (T.R. SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH SEPTEMBER, 2013 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 4