The Dy.CIT, Circle-4(1)(1), Ahmedabad V. Schutz Dishman Biotech Limited, Ahmedabad

ITA 12/AHD/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3202 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 01-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ADITY SHETH
• Keywords: Tax effect
• Section: 92

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 12/AHD/2018 / ASSESSMENT YEAR: 2013-14 DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 4 (1)(1), AHMEDABAD VS. SCHUTZ DISHMAN BIOTECH LTD., 2 ND FLOOR, BHADRA RAJ CHAMBER, SWASTIKA CROSS ROAD, NAVRANGPURA, AHMEDABAD-09 / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI VINOD TANWANI, SR DR ASSESSEE BY : SHRI ADITY SHETH, AR ! / DATE OF HEARING : 25/10/2019 / DATE OF PRONOUNCEMENT: 14/11/2019 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINS T THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-8, AHM EDABAD DATED 27.10.2017 PASSED FOR ASSESSMENT YEAR 2013-14. 2. THE GROUNDS TAKEN BY THE REVENUE ARE AS FOLLOWS: - 1. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE ON ACCOUNT OF ADJUSTMENTS MADE IN INTERNATIONA L TRANSACTIONS U/S 92 OF THE INCOME-TAX ACT, 1961 AMOUNTING TO RS.71,92,5 50/-. 2. THAT HE LD. CIT(A) ERRED IN LAW AND ON FACTS I N REJECTING THE COMPARABLES SELECTED BY THE TPO SOLELY ON THE BASIS OF TURNOVER FILTER, WITHOUT DEMONSTRATING HOW THE TURNOVER ADVERSELY AFFECTED T HE MARGINS IN THOSE CASES SO AS TO REJECT THEM AS COMPARABLES. THIS IS ERRONEOUS MORE SO WHEN THE SAME ENTITIES WERE OTHERWISE CONSIDERED COMPARABLE BY HIM. 3. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DETERMINING THE TURNOVER FILTER AT 50% OF THE ASSESSEES TURNOVER W ITHOUT THERE BEING ANY LEGAL OR FACTUAL BASIS OF THE SAME. EVEN IF THE TU RNOVER FILTER IS TO BE ITA NO. 12/AHD/2018 DCIT VS. SCHUTZ DISHMAN BIOTECH LTD FOR AY: 2013-14 2 CONSIDERED, IT SHOULD BE AT LEAST 5 TIMES MORE/LESS THAN THE TURNOVER OF THE ASSESSEE. 3. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, LEA RNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT APPEAL OF THE R EVENUE NEEDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF T HE RECENT CBDT CIRCULAR NO. 17 OF 2019 DATED 08.08.2019 WHEREBY THE MONETAR Y LIMITS FOR FILING THE APPEAL BY THE REVENUE BEFORE THE TRIBUNAL WAS ENHAN CED FROM RS.20 LAKHS TO RS.50 LAKHS. THIS INSTRUCTION IS APPLICABLE TO THE PENDING CASES ALSO. THEREFORE, THE PRESENT APPEAL OF THE REVENUE IS LIA BLE TO BE DISMISSED AS NON-MAINTAINABLE AS HELD BY THIS TRIBUNAL IN THE CA SE OF ITO VS. DINESH MADHAVLAL PATEL IN ITA NO.1398/AHD/2004 FOR AY 1998 -99 VIDE A CONSOLIDATED ORDER DATED 14.08.2019. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE TAX EFFECT INVOLVED IN THE APPEAL IS LESS THAN THE LIMI T PRESCRIBED BY THE AFORESAID CBDT CIRCULAR. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITION. AS LEARNED COUNSEL RIGHTLY CONTENDS, THE PRESENT AP PEAL OF THE REVENUE IS NO LONGER MAINTAINABLE IN VIEW OF THE RECENT CBDT CIRC ULAR NO. 17 OF 2019 DATED 08.08.2019. THE MANDATORY LIMIT FOR CASES IN WHICH REVENUE CAN CHALLENGE THE RELIEF GRANTED BY THE CIT(A) NOW STAN DS ENHANCED TO RS.50 LAKHS. THIS CONCESSION GRANTED BY THE CENTRAL BOAR D OF DIRECT TAXES (CBDT) IS RETROSPECTIVE IN EFFECT INASMUCH AS IT APPLIES T O ALL PENDING APPEALS AS WELL. IN VIEW OF THE ABOVE POSITION, THE APPEAL FI LED BY THE REVENUE IS NO LONGER MAINTAINABLE AND IS DISMISSED AS SUCH. 6. IT IS, HOWEVER, MADE CLEAR THAT ON RE-VERIFICATI ON AT THE END OF THE ASSESSING OFFICER IT COMES OUT THAT THE TAX EFFECT OF MORE THAN RS.50 LAKHS IS BEING INVOLVED IN THE APPEAL OR THE APPEAL FALLS WI THIN THE EXEMPTION CLAUSE ITA NO. 12/AHD/2018 DCIT VS. SCHUTZ DISHMAN BIOTECH LTD FOR AY: 2013-14 3 OF THE CIRCULAR, THEN THE REVENUE WILL BE AT LIBERT Y TO FILE MISCELLANEOUS APPLICATION TO RECALL THE TRIBUNAL ORDER. THE APPLI CATION SHOULD BE FILED WITHIN TIME LIMIT PRESCRIBED IN THE ACT. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D DUE TO LOW TAX EFFECT. ORDER PRONOUNCED IN THE COURT ON 14 TH NOVEMBER 2019 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 14/11/2019 BIJU T., SR.PS ! &'( )( / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! # / CONCERNED CIT 4. # ( ) / THE CIT(A) 5. & ! , ! , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION- 14.11.2019.. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE D ICTATING MEMBER .14.11.2019.. OTHER MEMBER 14.11.2019. 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S ./P.S. - 14.11.2019. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DI CTATING MEMBER FOR PRONOUNCEMENT 14.11.2019 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK14.1 1.2019 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER 8. DATE OF DESPATCH OF THE ORDER