THE DEPUTY COMMISSIONER OF INCOME TAX, KORBA(CG) V. M/S KRISHNA AUTO RIDERS PVT LTD, KORBA(CG)

ITA 139/BIL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6585 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 08-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K LASKAR
• Assessee Lawyers: R D DOSHI
• Keywords: Unexplained investment; Tax effect; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI PARTHA SARATHI CHAUDHU RY , JM . / I TA NO . 139 /RPR /20 1 6 / ASSESSMENT YEAR : 20 1 1 - 12 DY. COMMISSIONER OF INCOME TAX, CIRCLE KORBA, (C.G.) ....... / APPELLANT / V/S. M/S. KRISHNA AUTO RIDERS PVT. LTD., MAIN ROAD, KORGA, (C.G.) PAN : AADCK1452E / RESPONDENT A SSESSEE BY : SHRI R.D. DOSHI REVENUE BY : S HRI A.K. LASKAR / DATE OF HEARING : 1 8 .01.2019 / DATE OF PRONOUNCEMENT : 18 .01.2019 2 ITA NO .139 /RPR /20 1 6 / ORDER PER ANIL CHATURVEDI, AM : TH IS APPEAL FILED BY REVENUE EMANATE OUT OF THE ORDER OF COMMISSIONER OF INCOME - TAX (A) , BILASPUR DATED 08 - 02 - 2016 FOR A.Y. 201 1 - 12. 2 . THE GROUNDS RAISED BY THE REVENUE READS AS UNDER : 1) THE CIT(A) HAS ERRED IN DELETING ADDITION OF RS. 5,87,511/ - MADE BY THE AO ON ACCOUNT OF TREATING THE SAME AS CAPITAL EXPENDITURE INCURRED IN THE NEW BRANCHES OPENED AT RAIGARH AN JANJGIR, WHEN PARTICULARY, THE EXPENDITURES GIVE ENDURING BENEFIT TO THE ASSESSEE AND THRE WERE NO EVIDANCES SUGGESTING THAT THESE WERE INCURRED AFTER STARING OF NEW BRANCHES. 2) T HE CIT(A) HAS ERRED IN DELETING ADDITION OF RS.34,99,315/ - REPRESENTS RECEIPTS ON ACCOUNT OF CORPORATE DISCOUNT, EXCHANGE BONUS, MISCELLANEOUS RECEIPTS ON THE GROUND OF OVERRIDING CLUSE, WHEN PARTICULARY, THE ASSESSEE HAD RECORDED ALL SALES OF VEHICLES MADE IN THE FINANCIAL YEAR TAKEN/ PURCHASED FROM THE PRINCIPLE AND HENCE, AS PER MERCANTILE SYSTEM OF ACCOUNTING ALL THESE RECEIPTS ARE REVNUE NATURE FOR THE ASSESSEE. 3) THE CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF UNEXPLAINED INVESTMENT AT RS.3,60,615/ - AS AGAINST RS.7,21,230/ - MADE BY THE AD ON THE BASIS OF OVO'S REPORT, WITHOUT ANY BASIS AND EVIDENCE. 3 . BEFORE US, AT THE OUTSET, LD. A.R. SUBMITTED THAT THE APPEAL OF THE REVENUE NEEDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT . LD. D.R. DID NOT OBJECT TO THE AFORESAID CONTENTION MADE BY THE LD. A.R. 3 ITA NO .139 /RPR /20 1 6 4 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENUE, WE FIND THAT REVENUE IS AGGRIEVED BY THE ORDER OF LD. CIT(A) IN RESPECT OF THE RELIEF GIVEN BY HIM. AS P ER THE RECENT ANNOUNCEMENT OF CENTRAL BOARD OF DIRECT TAXES (CBDT) DATED 11.07.2018 (CIRCULAR NO. 3 OF 2018), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF GIVEN BY LD. CIT(A) BEFORE THE INCOME TAX APPELLATE TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST, EXCEEDS RS.20 LAKHS . THE CIRCULAR FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDING APPEALS ALSO. IN THE PRESENT CASE, IT IS AN UNDISPUTED FACT THAT ON THE ADDITIONS WHICH ARE IN DISPUTE, THE TAX EFFECT IS LESS THAN RS.20 LAKHS . IN THE ABSENCE OF ANY MATERIAL PLACED ON RECORD BY THE REVENUE TO DEMONSTRATE THAT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY EXCEPTIONS PROVIDED IN PARA 10 OF THE AFORESAID CBDT CIRCULAR, WE ARE OF THE VIEW THAT THE MONETARY LIMIT PRESCR IBED BY THE INSTRUCTIONS OF THE AFORESAID CBDT CIRCULAR WOULD BE APPLICABLE TO THE PRESENT APPEAL OF THE DEPARTMENT. WE THEREFORE HOLD THE PRESENT APPEAL OF REVENUE TO BE NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT AND ACCORDINGLY DISMISS THE APPEAL OF R EVENUE WITHOUT EXPRESSING ANY OPINION ON MERITS OF THE CASE. HOWEVER, IN CASE THERE IS ANY ERROR IN THE COMPUTATION OF THE TAX EFFECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT CIRCULAR IS NOT APPLICABLE, IT WOULD BE OPEN TO THE REVENUE TO SEEK REVI VAL OF THE APPEAL. THUS, THE GROUNDS OF THE REVENUE ARE DISMISSED. 4 ITA NO .139 /RPR /20 1 6 5 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON 18 TH DAY OF JANUARY, 2019. SD/ - SD/ - PARTHA SARATHI CHAUDHURY ANIL CHATURVEDI JUDICIAL MEMBER ACCOUNTANT MEMBER / RAIPUR ; / DATED : 18 TH JANUARY, 2019 . RK / COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, I.T.A.T., RAIPUR //TRUE COPY// //TRUE COPY// / BY ORDER, / PRIVATE SECRETARY , / ITAT, RAIPUR . 5 ITA NO .139 /RPR /20 1 6 DATE 1 DRAFT DICTATED ON 1 8 .01.2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 1 8 .01 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER