The ITO, Ward-1(1), Ahmedabad V. Agew Steel Manufacturers Pvt.Ltd., Ahmedabad

ITA 1399/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1022 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 26-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMAL I MEHTA
• Assessee Lawyers: JWALIN NANAVATI
• Keywords: Tax effect; Capital expenditure
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI N. K. BILLAIYA , ACCOUNTANT MEMBER. ITA. NO.1399/AHD/2012 (ASSESSMENT YEAR:2008-09) ITO, WARD-1(1), AHMEDABAD APPELLANT VS. AGEW STEEL MANUFACTURING PVT. LTD. 505, ANIKET BUILDING, NR. MUNICIPAL MARKET, C.G. ROAD, NAVRANGPURA, AHMEDABAD - 380009 RESPONDENT PAN: AABCA6055D /BY APPELLANT :SHRI VIMAL I. MEHTA, SR.D.R. /BY RESPONDENT :SHRI JWALIN NANAVATI, A.R. /DATE OF HEARING : 27.07.2016 /DATE OF PRONOUNCEMENT : 27.07.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME TAX (APPEALS)-6, AHMEDABA D, DATED 24.05.2012 FOR A.Y. 2008-09 ON FOLLOWING GROU NDS:- ITA NO.1399/AHD/12 A.Y. 08-09 [ITO VS. AGEW STEEL MANUFACUTRING PVT. LTD.] PAGE 2 5. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS.55,162/- U/S.14A DESPITE THE FACT THAT THE ASSESSEE HAD CLAIMED DIVIDEND INCOME AS EXEMPT IN THE RETURN OF INCOME. 6. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS.12,41,944/- U/S 40(A)(IA) DESPITE THE FACT THAT ANY SUM PAID TO A CONTRACTOR IS SUBJECT TO TDS U/S 194C OF THE ACT. MOREOVER, THE ASSESSEE HAD NOT MAINTAINED SEPARATE ACCOUNTS WITH CONCRETE EVIDENCES OF SUCH PAYMENT AS REIMBURSEMENT AND HAD NOT PROVIDED ANY DETAILS OF ENTITY TO WHOM THE ACTUAL PAYMENT HAD REACHED THOUGH THE AGENT SHRI JASVANT B. SHAH. 7. THE LD. CIT(A) HAS ERRED IN AGAIN PROVIDING THE ASSESSEE AN OPPORTUNITY TO PROVE THAT SUNDRY BALANCE WRITTEN OFF AMOUNTING TO RS.3,71,324/- WAS CONSIDERED AS INCOME DURING EARLIER YEARS. THE ASSESSEE HAD FAILED TO PROVE THE SAME DURING ASSESSMENT AND APPELLATE PROCEEDINGS. 8. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIO N OF RS.2,68,362/- WHICH WAS TREATED AS CAPITAL EXPENDITURE TOWARDS ERECTION CHARGES TREATING THE SAME AS SALES IN THE FORM OF FITTING CHARGES. THIS IS DESPITE THE FACT THAT THE ASSESSEE HAD CLAIMED THE SAME AS EXPENSES AND IT WAS FOUND THAT SUCH CHARGES WERE 7 TIMES MORE THAN EARLIER YEAR, WHEREAS THE SALES HAD HALVED COMPARED TO EARLIER YEAR (3.92 CRORES COMPARED TO 6.43 CRORES LAST YEAR). 2. BEFORE US, AT THE OUTSET, LD. AUTHORIZED REPRESENTA TIVE SUBMITTED THAT THE PRESENT APPEAL OF THE REVENUE NE EDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF T HE CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT TH E TAX EFFECT ITA NO.1399/AHD/12 A.Y. 08-09 [ITO VS. AGEW STEEL MANUFACUTRING PVT. LTD.] PAGE 3 IS LESS THAN THE LIMIT PRESCRIBED BY THE AFORESAID CBDT CIRCULAR. 2.1 WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATE RIAL ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENUE, WE PRIMA-FACIE FIND THAT THE TAX EFFECT IN THIS APPEAL IS BELOW RS.10 LACS. AS PER THE ANNOUNCEMEN T OF CENTRAL BOARD OF DIRECT TAXES (CBDT) DATED 10.12.20 15 (CIRCULAR NO. 21 OF 2015), NO DEPARTMENT APPEALS AR E TO BE FILED AGAINST RELIEF GIVEN BY LD. CIT(A) BEFORE THE INCOME TAX TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST EXCEEDS RS. 10 LACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDING APPEALS. IN THE PRES ENT CASE, SINCE IT IS AN UNDISPUTED FACT THAT ON THE ADDITION S WHICH ARE IN DISPUTE, THE TAX EFFECT IS LESS THAN RS. 10 LACS AND IN THE ABSENCE OF ANY MATERIAL ON RECORD BY THE REVENU E TO DEMONSTRATE THAT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY EXEMPTIONS SPECIFIED IN CLAUSE (8) OF THE AFORES AID CBDT CIRCULAR, WE ARE OF THE VIEW THAT THE MONETARY LIMI T PRESCRIBED BY THE INSTRUCTIONS OF THE AFORESAID CBD T CIRCULAR WOULD BE APPLICABLE TO THE PRESENT APPEAL OF THE DEPARTMENT AND THEREFORE THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. HOWEVER, IN CASE THERE IS ANY ERROR IN THE COMPUTATION OF THE TAX EF FECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT C IRCULAR IS NOT APPLICABLE, IT WOULD BE OPEN TO THE REVENUE TO SEEK REVIVAL OF THE APPEAL. IN SUCH CIRCUMSTANCES, WE D ISMISS ITA NO.1399/AHD/12 A.Y. 08-09 [ITO VS. AGEW STEEL MANUFACUTRING PVT. LTD.] PAGE 4 THE APPEAL OF REVENUE WITHOUT EXPRESSING ANY OPINIO N ON MERITS OF THE CASE. 3. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 27 TH DAY OF JULY, 2016. SD/- SD/- (N. K. BILLAIYA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD: DATED 27/07/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE $ %&%'( ) / CONCERNED CIT 4 )- / CIT (A) ,-./00'(1 '( 123& / DR, ITAT, AHMEDABAD 4/5678 / GUARD FILE. BY ORDER / 1 / 2% '( 123&