The Dy. Commissioner of Income Tax, Circle-1(1)(1), Ahmedabad V. M/s. Atul Ltd., Ahmedabad

ITA 1109/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4130 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 05-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILABRA DAS GUPTA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Transfer pricing; International transaction; Retrospective amendment; Tax effect
• Section: 92B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER IT(TP)A NO.1109/AHD/2017 (ASSESSMENT YEAR : 2011-12) THE DCIT CIRCLE-1(1)(1) AHMEDABAD VS. ATUL LTD. ATUL HOUSE, MITHILA SOCIETY, GI PATEL MARG, NAVRANG CROSS ROAD AHMEDABAD-380 014 [PAN NO. AABCA 2390 M] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI NILABRA DAS GUPTA, SR.DR RESPONDENT BY : SHRI S.N. SOPARKAR & SHRI PARIN SHAH, AR DATE OF HEARING 26/07/2018 DATE OF PRONOUNCEMENT 08 / 0 8 /201 8 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL HAS BEEN FILED BY THE REVENUE BEFORE US AGAINST THE ORDER DATED 28.02.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, AHMEDABAD [LD.CIT(A) IN SHORT] FOR ASSESSMENT YEAR (AY) 2011-12. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REA D AS UNDER:- (A) THAT THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS.3,16,000/- U/S.92CA(3) OF THE ACT ON ACCOUNT OF TRANSFER PRIC ING. (B) THAT THE LD.CIT(A) HAS ERRED IN LAW AND FACTS WHILE HOLDING THAT THE CORPORATE GUARANTEE IS NOT AN INTERNATIONAL TRANSACTION WITHIN THE MEAN ING OF SECTION 92B OF THE IT ACT. (C) THAT THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.1,83,000/- MADE ON ACCOUNT OF DISALLOWANCE OF PRIOR PERIOD EX PENSES AND INCOME. - 2 - IT(TP)A NO.1109/AHD/2017 DCIT VS. ATUL LTD. ASST.YEAR 2011-12 (D) THAT THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.34,05,804/- MADE U/S.14A R.W.R.8D OF THE ACT. 3. AT THE OUTSET, AFTER GOING THROUGH THE GROUNDS O F APPEAL AND THE IMPUGNED ORDERS OF THE REVENUE AUTHORITIES BELOW, A QUERY WAS RAISED B Y THE BENCH AS TO APPLICABILITY AND MAINTAINABILITY OF THE APPEAL FILED BY THE REVENUE IN VIEW OF RECENT CBDT CIRCULAR NO.3/2018 DATED 11.7.2018 RESTRICTING THE FILLING O F THE APPEAL BY THE REVENUE WHERE THE TAX EFFECT IS BELOW RS.20 LAKHS, THE LD.DR DID NOT DISP UTE THE SAME AND SUBMITTED THAT THE ISSUE IS LEFT TO THE TRIBUNAL TO BE DECIDED IN ACCORDANCE W ITH LAW. 4. WE FIND THAT THE APPEAL OF THE REVENUE IS PRESEN TED ON 05.05.2017. ON 11.7.2018 THE CBDT HAS ISSUED INSTRUCTIONS BEARING NO. 3 OF 2018 UNDER FILE NO.F.NO.279/MISC.142/2007- ITJ(PT) PROHIBITING ITS SUBORDINATE AUTHORITIES FRO M FILING OF THE APPEAL TO THE TRIBUNAL AGAINST THE ORDER OF THE CIT(A) WHERE THE TAX EFFECT BY VIR TUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.20 LAKHS. THE INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RETROSPECTIVE EFFECT, MEANING THEREBY, THESE INSTRUCTIONS ARE APPLICABLE ON PENDING APPEALS ALSO. IN THE PRESENT CASE, TAX EFFECT ON THE TOTAL INCOME ASSESSED MIN US 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.20 LAKHS. FU RTHER, THE CASE OF THE REVENUE DOES NOT FALL WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRC ULAR. 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. HOWEVER, IT IS OBSERVED THAT IN CASE ON RE-VERIFICA TION AT THE END OF THE AO IT COMES TO THE NOTICE THAT THE TAX EFFECT IS MORE OR REVENUES 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 B E FILED WITHIN THE TIME PERIOD PRESCRIBED IN - 3 - IT(TP)A NO.1109/AHD/2017 DCIT VS. ATUL LTD. ASST.YEAR 2011-12 THE ACT. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED DUE TO LOW TAX EFFECT. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 08 / 08/2018 SD/- SD/- ( PRAMOD KUMAR ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 08/ 08/2018 .., . ../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-1, AHMEDABAD 5. !'# , $ , / DR, ITAT, AHMEDABAD 6. #() *+ / GUARD FILE. / BY ORDER, ! //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 26.7.2018 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26.7.2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.8.8.18 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8.8.18 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER