DCIT, Cir 23(1), V. Wimco Greens,

ITA 1306/DEL/2007

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7757 (ITAT-DELHI)
• Duration Of Justice: 9 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 25-05-2016
• Assessment Year: 1998-1999
• Appeal Filed On: 16-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: ROHIT JAIN
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO. 1306/DEL/07 ASSESSMENT YEAR: 1998-99 DY. CIT, CIRCLE 23(1), VS. M/S WIMCO GREENS, ROOM NO. 190, CR BLDG., C-14, LAJPAT NAGAR, IP ESTATE, NEW DELHI PHASE-II, NEW DELHI (PAN: AAACW020F) ( APPELLANT) (RESPONDENT) APPELLANT BY : SH. T. VASANTHAN, SR. DR RESPONDENT BY : SH. ROHIT JAIN, ADV. & SH. ROHIT GARG, CA DATE OF HEARING : 25-05-2016 DATE OF ORDER : 01-06-2016 ORDER PER H.S. SIDHU, J.M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST T HE ORDER DATED 22.12.2006 OF LD. CIT(A)-XVI, NEW DELHI PERTAINING TO ASSESSMENT YEAR 1998-99 ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE IN RESPECT OF MANAGEMENT FEES AND LICENCE FEE ON RECEI PT BASIS BY THE AO TO THE INCOME OF THE ASSESSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT( A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO R ECOM,PUTED THE INCOME OF THE ASSESSEE FROM MANAGEMENT FEES AND LICENCE FEES ON ACCRUAL BASIS OF 1/8 TH OF THE TOTAL AS CLAIMED BY THE ASSESSEE. ITA NO.1306/DEL/07 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT( A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS CLAIMED BUSINESS PROMOTION EXPENDITURE ON ACTUAL AND NOT ON ACCRUAL BASIS WHILE SHOWING RECEIPT ON SALE OF ETP, LICENCE FEE A ND MANAGEMENT CHARGES OF 1/8 TH ON ACCRUAL BASIS. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT( A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO AL LOW EXPENSES OF RS. 12,00,000/- PAID TOWARDS PROFESSION AL FEES TO M/S TALENT MARKETING PVT. LTD. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT( A) HAS ERRED IN LAW AND ON FACTS IN IGNORING THE FACT THAT THE ASSESEE FAILED TO PROVE THE GENUINENESS OF THE PAYMENTS MAD E TO TML. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HE ARING OF THE APPEAL. 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. FROM THE ABOVE, WE FIND THAT THE TAX EFFEC T IN THE REVENUES APPEAL IS LESS THAN RS.10,00,000/-, THEREFORE, THE DEPARTMENTS APPEAL IS NOT MAINTAINABLE, IN VIEW OF THE CIRCULAR NO. 2 1/2015 DATED 10 TH DECEMBER, 2015 ISSUED VIDE F.NO. 279/MISC. 142/2007 -ITJ (PT.) BY THE CBDT. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PA RA NOS. 3 & 10 OF THE AFORESAID CBDTS CIRCULAR ARE REPRODUCED AS UNDER:- 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY L IMITS GIVEN HEREUNDER: S NO APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT ITA NO.1306/DEL/07 3 (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETA RY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTI ONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEA L WAS FILED. 3. IT IS NOT IN DISPUTE THAT THE BOARDS INSTRUCTIO N OR DIRECTIONS ISSUED TO THE INCOME-TAX AUTHORITIES ARE BINDING ON THOSE AUTHORI TIES, THEREFORE, THE DEPARTMENT SHOULD HAVE WITHDRAWN/ NOT PRESSED THE P RESENT APPEAL, IN VIEW OF THE AFORESAID INSTRUCTIONS SINCE THE TAX EFFECT IN THE INSTANT APPEAL IS LESS THAN THE AMOUNT OF RS. 10 LACS, PRESCRIBED IN THE ABOVE SAID CBDTS INSTRUCTIONS. 4. KEEPING IN VIEW THE CBDT INSTRUCTION NO. 21/2015 DATED 10 TH DECEMBER, 2015, WE ARE OF THE VIEW THAT THE REVENUE SHOULD HA VE WITHDRAWN/ NOT PRESSED THE INSTANT APPEAL BEFORE THE TRIBUNAL. WE ARE ALS O OF THE VIEW THAT THE SAID ITA NO.1306/DEL/07 4 INSTRUCTIONS ARE APPLICABLE FOR THE PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN TRIBUNAL. ACCORDINGLY, THE REVENUES APPEAL IS DISMISSED. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE STAN DS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/06/2016. SD/- SD/- (O.P. KANT) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED: 01/06/2016 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR