ACIT, Haldwani V. M/s. Krishna Stone Industries Pvt. Ltd., Haldwani

ITA 1270/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8067 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 25-04-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 06-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RICHA RASTOGI
• Keywords: Business expenditure; Retrospective amendment; Tax effect
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SH. H.S. SIDHU , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO. 1270 /DEL/ 2014 ASSESSMENT YEAR: 2005 - 06 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - HALDWANI. VS. SH. KRISHNA STONE INDUSTRIES PVT. LTD., BAREILLY ROAD, HALDWANI. GIR/PAN : AABCK4973E (APPELLANT) (RESPONDENT) APPELLANT BY MS. RICHA RASTOGI, SR.DR RESPONDENT BY SH. RAHUL KHARE, ADV. DATE OF HEARING 25.04.2016 DATE OF PRONOUNCEMENT 27.04.2016 ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DATED 09.12.2013 IN RELATION TO ASSESSMENT YEAR 2005 - 06, RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD.CIT(A) - II, DEHRADUN HAS ERRED IN LAW AND ON FACTS IN ALLOWING DEDUCTION AS BUSINESS EXPENDITURE OF AN AMOUNT OF RS. 26,41,271/ - IMPOSED BY THE D. M. NAINITAL U/S 21(1) & 21(5) OF THE MINES AND MINERALS REGULATION & DEVELOPMENT ACT OF 1957 FOR I LLEGAL TRANSPORTATION OF MINERALS MINED ILLEGALLY, BY HOLDING IT AS COMPENSATORY IN NATURE AND NOT AN INFRACTION OF LAW THEREBY COMPLETELY IGNORING THE FACTS THAT THE D. M. NAINITAL IN HIS ORDER DATED 19 - 03 - 2005 HAS GIVEN A FINDING THAT THE ILLEGAL ACTIVIT IES OF THE ASSESSEE FALL UNDER THE CATEGORY OF PENALTY U/S 21(1), 21(2) & 21(5) OF THE MINES AND MINERALS REGULATION & DEVELOPMENT ACT OF 1957 ALONGWITH RULE 57 OF UTTRANCHAL UPKHANIJ (PRIHAR) NIYAMAVALI 2001 AND THEREBY FURTHER IGNORING THAT AS PER THE EX PLANATION TO THE SECTION 37(1) OF THE I.T. ACT, ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY 2 ITA NO. 1270/DEL/2014 AY: 2005 - 06 PURPOSE WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND SO NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESPECT OF SUCH EXPENDITURE. 2. THAT THE ORDER OF THE LD.CIT(A) - II, DEHRADUN IS AGAINST THE SPIRIT OF LEGISLATURE AND THE ORDER OF THE AO IS LIABLE TO BE RESTORE. 3. THAT THE APPELLANT CRAVES, LEAVE TO ADD, ALTER, AMEND OR VARY FROM THE ABOVE GROUNDS O F APPEAL. 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD . IT IS NOTICED THAT THE CBDT HAS ISSUED CIRCULAR NO. 21 OF 2015 DATED 10.12.2015 WITH RETROSPECTIVE EFFECT, REVISING THE MONETARY LIMIT TO RS.10,00,000/ - FOR NOT FILI NG APPEALS BEFORE THE TRIBUNAL. THE LD. SR. DEPARTMENTAL REPRESENTATIVE, ALTHOUGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THE FACT THAT TAX EFFECT INVOLVED IN THE APPEAL IS LESS THAN RS.10,00,000/ - . 3. FROM PARA 10 OF THE AB OVE CIRCULAR, IT IS PALPABLE THAT THE INSTRUCTION IS APPLICABLE TO THE PENDING APPEALS ALSO WITH RETROSPECTIVE EFFECT AND THERE IS A CLEAR - CUT DIRECTION TO THE DEPARTMENT TO WITHDRAW OR NOT PRESS SUCH APPEALS FILED BEFORE THE ITAT, WHEREIN TAX EFFECT IS LE SS THAN RS.10,00,000/ - . GOING BY THE PRESCRIPTION OF THE AFORE - NOTED CIRCULAR, WE ARE OF THE VIEW THAT THE REVENUE SHOULD HAVE EITHER NOT FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL OR WITHDRAWN THE SAME AS THE TAX EFFECT IN THIS APPEAL IS ADMITTEDLY LESS THAN THE PRESCRIBED LIMIT I.E. RS. 10,00,000/ - FOR NOT FILING THE APPEAL. ACCORDINGLY , WE DISMISS THE INSTANT APPEAL W ITHOUT 3 ITA NO. 1270/DEL/2014 AY: 2005 - 06 GOING INTO MERITS OF THE CASE. HOWEVER, THE DEPARTMENT IS AT LIBERTY TO FILE THE MISCELLANEOUS APPLICATION, IF THE TAX EFFECT IS M ORE THAN THE PRESCRIBED LIMITED OF RS. 10 LACS OR OTHERWISE. 4. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 27 TH APRIL , 2016 . SD/ - SD/ - ( H.S. SIDHU ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 TH APRIL , 2016 . RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI