ACIT, Circle-2(2), Hyd, Hyderabad V. The Andhra Bank Employees Co-operative Bank Ltd. Hyd, Hyderabad

ITA 1081/HYD/2015

• Counselvise Citation: 108122514 RSA 2015
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Tax effect
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1081/HYD/2015 ASSESSMENT YEAR: 2009-10 ASST. COMMISSIONER OF INCOME- TAX, CIRCLE 2(2), HYDERABAD. VS. THE ANDHRA BANK EMPLOYEES COOP. BANK LTD., HYDERABAD PAN AABCT 6347B (APPELLANT) (RESPONDENT) REVENUE BY : SHRI B. KURMI NAIDU ASSESSEE BY : SHRI P. MURALI MOHAN RAO DATE OF HEARING 05-11-2015 DATE OF PRONOUNCEMENT 13-11-2015 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS)-2, HYDERABAD DATED 15.06.2015, WHEREBY HE ALLOWED THE DISALLOWA NCE OF RS. 10,70,774/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF CONTRIBUTION TO UNAPPROVED GRATUITY FUND. 2. AT THE OUTSET OF HEARING, THE LEARNED AR POINTED OUT THAT THE TAX EFFECT OF THE GROUNDS RAISED IN THE APPEAL PREF ERRED BY THE REVENUE IS BELOW RS.4 LACS, HENCE, AS PER THE LATES T CBDT INSTRUCTION NO. 5/2014 DATED 10.07.2014, THE PRESEN T APPEAL IS NOT MAINTAINABLE. 3. THE LEARNED DR, HOWEVER, OBJECTED TO THE ABOVE SUBMISSIONS OF THE LEARNED AR ABOUT THE TAX EFFECT HAVING BELOW RS.4 LACS ON THE 2 ITA NO. 1081 /HYD/2015 THE ANDHRA BANK EMPLOYEES COOP BANK LTD. GROUND THAT THE INSTRUCTION IS NOT APPLICABLE WHERE SUCH AN ISSUE HAS A CASCADING EFFECT. 4. IN THE PRESENT APPEAL, THE REVENUE HAS QUESTIONE D DELETION OF ADDITION OF RS.10,77,774 MADE BY THE LEARNED CIT(AP PEALS). THE TAX EFFECT THEREOF IS BELOW RS.4 LACS. AS PER THE LATES T CBDT INSTRUCTION NO. 5/2014 DATED 10.7.2014, THE REVENUE IS NOT SUPP OSED TO PREFER APPEAL HAVING TAX EFFECT BELOW RS. 4 LACS AGAINST T HE FIRST APPELLATE ORDER BEFORE THE ITAT. THIS INSTRUCTION REGARDING T HE PECUNIARY LIMIT FOR PREFERRING THE APPEAL BEFORE THE ITAT BY THE RE VENUE HAS NOW STATUTORY FORCE UNDER SEC. 268A OF THE INCOME-TAX A CT, 1961. THUS, PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENUE IN VIOLATION OF THE SAID INSTRUCTION AS THE PRESENT APPEAL HAS BEEN FIL ED ON 14/08/2015 I.E. AFTER THE ISSUANCE OF THE INSTRUCTION. FURTHER , WE DO NOT FIND THAT BY DISMISSING THE REVENUE APPEAL, ON LOW TAX EFFECT , IT IS GOING TO AFFECT THE SUBSEQUENT ASSESSMENT YEARS. THEREFORE, IN OUR OPINION, THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT O F LOW TAX EFFECT AND IT IS DISMISSED AS SUCH. 5. MOREOVER, THE ISSUE IN DISPUTE IS ALSO COVERED I N FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH O F THIS TRIBUNAL IN CASE OF CAPITAL IQ INFORMATION SYSTEM (INDIA) P. LT D., IN ITA NO. 84/HYD/2013 DATED 31/05/2013 WHEREIN THE COORDINATE BENCH FOLLOWING THE DECISION OF THE ANOTHER COORDINATE BE NCH IN CASE OF M/S SRI KRISHNA DRUGS LTD., VS. DIT IN ITA NO. 2126/HYD /2011 DATED 11/04/2013, ALLOWED THE APPEAL OF THE ASSESSEE BY H OLDING THAT EVEN IF ANY PAYMENT IS MADE TO AN UNAPPROVED GRATUITY FU ND, IT HAS TO BE ALLOWED U/S 37 OF THE ACT. FURTHER, LD. COUNSEL FOR THE ASSESSEE HAS BROUGHT TO OUR NOTICE THAT THE SAID FUND WAS SUBSEQ UENTLY APPROVED BY THE INCOME-TAX DEPARTMENT, WHICH WAS RECORDED IN THE ORDER OF THE CIT(A). 3 ITA NO. 1081 /HYD/2015 THE ANDHRA BANK EMPLOYEES COOP BANK LTD. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 13 TH NOVEMBER, 2015. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 13 TH NOVEMBER, 2015 KV COPY TO:- 1) ACIT, CIRCLE 2(2) 8 TH FLOOR, B BLOCK, ROOM NO. 824, IT TOWERS, AC GUARDS, HYDERABAD 500 004 2) THE ANDHRA BANK EMPLOYEES COOP BANK LTD., 4-4-29 6/297, MITHILA COMPLEX, BANK STREET, HYDERABAD. 3 CIT(A)-2, HYDERABAD 4) PR. CIT-2, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.