ACIT 25(3), MUMBAI V. MACOMA HARDWARE, MUMBAI

ITA 1377/MUM/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6315 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2006-2007
• Appeal Filed On: 18-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMMET KUMAR
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J: MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1377/MUM/2010 (ASSESSMENT YEAR 2006-2007) ACIT 25(3) C-11, ROOM NO. 308 PRATYAKSH KAR BHAVAN BANDRA KURLA COMPLEX BANDRA EAST MUMBAI-400 051. VS. M/S. MACOMA HARDWARE 71/C, GOVERNMENT INDUSTRIAL ESTATE GANESH NAGAR PETROL PUMP KANDIVALI WEST MUMBAI-400 067. PAN AAAFM1385L (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI SUMMET KUMAR FOR RESPONDENT : -NONE- ORDER PER D. MANMOHAN, V.P . : THIS APPEAL, FILED AT THE INSTANCE OF THE REVENUE, IS DIRECTED AGAINST THE ORDER DATED 24.11.2009 OF LEARNED CIT(A )-31, MUMBAI AND IT PERTAINS TO A.Y. 2006-07. 2. THE ONLY GROUND URGED, IN THE APPEAL FILED BY TH E REVENUE, READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN DELETED THE ADDITION MA DE BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACT THA T THE PREMIUM PAID ON KEYMAN INSURANCE POLICY TAKEN BY TH E ASSESSEE FIRM IN THE NAME OF ONE OF ITS PARTNERS BY STATING THAT THERE WAS NO EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE FIRM AND ITS PARTNERS AND THAT THE CONCEPT OF KEY MAN DOES NOT ARISE IN THE CASE OF THE PARTNERSHIP FIRM COMPRISIN G ONLY TWO PARTNERS AS THE RETIREMENT OF ONE OF THE PARTNERS W OULD RESULT IN THE DISSOLUTION OF THE FIRM. M/S. MACOMA HARDWARE 2 3. ON BEHALF OF THE ASSESSEE, SHRI ISHWER RATHI, CA FILED A PETITION STATING THAT THE TAX EFFECT IN THIS CASE IS LESS TH AN RS. 2 LAKHS AND HENCE, IN THE LIGHT OF THE CIRCULAR ISSUED FROM TIM E TO TIME BY CBDT, REVENUES APPEAL CANNOT BE ENTERTAINED. IT MAY NOT BE OUT OF PLACE TO MENTION THAT HONOURABLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. CAMCO COLOUR CO., 254 ITR 565 AND CIT VS. PITHWA EN GINEERING WORKS, 276 ITR 519, HELD THAT WHERE THE REVENUE EFF ECT IS LESS THAN THE SPECIFIED LIMIT, THE REVENUE SHOULD NOT PREFER AN APPEAL UNLESS IT IS SHOWN THAT THE CASE FALLS WITHIN THE EXCEPTION P ROVIDED THEREIN. 4. THOUGH, LEARNED DR OBJECTED TO THE DISMISSAL OF THE APPEAL ON THIS TECHNICAL GROUND, HE FAIRLY ADMITTED THAT THE ISSUE STANDS SQUARELY COVERED BY THE DECISION OF HONBLE JURISDI CTIONAL HIGH COURT IN THE CASE OF B.N. EXPORTS, 323 ITR 178 WHEREIN IT WAS HELD THAT THE PREMIUM PAID ON KEYMAN INSURANCE POLICY TAKEN BY TH E ASSESSEE FIRM IS ALLOWABLE AS A DEDUCTION. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED DR AND CAREFULLY PERUSED THE RECORD. ADMITTEDLY THE REVENU E EFFECT IS LESS THAN THE LIMIT PRESCRIBED BY THE CIRCULAR ISSUED BY CBDT AND HENCE, IN THE LIGHT OF THE DECISION OF HONBLE BOMBAY HIGH COURT (SUPRA), APPEAL IS NOT MAINTAINABLE. EVEN ON MERITS, THE ORDER PASSED BY LEARNED CIT(A) IS IN CONSONANCE WITH THE VIEW TAKEN BY HONBLE BOM BAY HIGH COURT IN THE CASE OF B.N. EXPORTS (SUPRA). UNDER THE CIRC UMSTANCES, WE DO NOT FIND ANY MERIT IN THE APPEAL FILED BY THE REVEN UE. THEREFORE, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BEEN PRONOUNCED IN THIS 24 TH DAY OF NOVEMBER, 2010. SD/- SD/- (B. RAMAKOTAIAH) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 24 TH NOVEMBER, 2010 PS/- M/S. MACOMA HARDWARE 3 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT, CONCERNED. 5. THE DR CONCERNED, MUMBAI 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, MUMBAI.