DCIT (OSD) 8(1), MUMBAI V. LOK HOLDING & CONSTRUCTIONS LTD, MUMBAI

ITA 140/MUM/2014

• Counselvise Citation: 14019914 RSA 2014
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P K PANDA
• Assessee Lawyers: MEHWALA
• Keywords: Right to appeal; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA NO.140/MUM/2014 (ASSESSMENT YEAR :2003-04) DY. COMMISSIONER OF INCOME TAX, RANGE(OSD)- 8(1) ROOM NO.204, 2 ND FLOOR AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020 M/S. LOK HOLDING & CONSTRUCTIONS LTD. LOK BHAVAN, LOK BHARTI COMPLEX, MAROL MAROSHI ROAD ANDHERI (E) MUMBAI-400059. PAN:AAACL 6900 F APPELLANT VS RESPONDENT DATE OF HEARING : 11.03.2014 DATE OF PRONOUNCEMENT : 11.03.2014 APPELLANT BY : SHRI B.P.K. PANDA RESPONDENT BY: SHRI MEHWALA O R D E R THIS APPEAL IS FILED AT THE INSTANCE OF THE REVENUE A ND IT PERTAINS TO ASSESSMENT YEAR 2003-04. INCLUSION OF PAYMENTS TO M/ S. SUNNY GOODS TRANSPORT, KALYAN FOR THE PURPOSE OF COMPUTING TH E WIP WAS THE SUBJECT MATTER OF DISPUTE BEFORE THE TAX AUTHORITIES; ACCORDING TO THE AO IT WAS ONLY AN ACCOMMODATION ENTRY AND HENCE THE A MOUNT DEBITED TO THE P&L ACCOUNT AND TREATED AS PART OF WIP IS NOT AS PER LAW WHEREAS ACCORDING TO THE ASSESSEE EXPENDITURE INCURR ED WAS GENUINE. HOWEVER THE ULTIMATE EFFECT OF REJECTION OF THE CLAIM WAS THAT THE ASSESSMENT WAS COMPLETED ON TOTAL INCOME OF RS.24,910/ - AS AGAINST DECLARED INCOME OF RS.1,27,836/-. IN OTHER WORDS THE RE IS NO TAX EFFECT IN THE YEAR UNDER CONSIDERATION. 2. THE LEARNED COUNSEL APPEARING ON BEHALF OF THE ASSES SEE PLACED RELIANCE UPON THE INSTRUCTIONS ISSUED BY CBDT INSTRUC TION NO.3/2011 DATED 09/02/2011, TO SUBMIT THAT THE REVENUE IS NOT AUT HORISED TO PREFER AN APPEAL IN THE INSTANT CASE SINCE TAX EFFECT I S LESS THAN RS.3.00 LACS. HE HAS ALSO RELIED UPON THE DECISION OF HONBL E GUJARAT HIGH ITA NO.5727/MUM/2011 (ASSESSMENT YEAR :2004-05) 2 COURT IN THE CASE OF CIT VS. MANEKBAUG CO-OPERATIVE H OUSING SOCIETY LTD. (2012) 22 TAXMANN.COM 220 TO SUBMIT THAT THE REVENUE IS DEBARRED FROM FILING APPEAL WHERE TAX EFFECT IS LESS THAN STIPULATED AMOUNT. ON THE OTHER HAND THE LEARNED D.R. SUBMITTED THAT THE DISPUTED AMOUNT IS RS.2.38 CRORES WHICH WAS TREATED AS BOGUS EXPENDITURE WHICH WILL HAVE RECURRING EFFECT IN SUBS EQUENT YEARS. HE HOWEVER ADMITTED THAT AS PER CIRCULAR ISSUED BY CBDT TH E EXPRESSION TAX EFFECT REFERS TO THE TAX PAYABLE FOR THE YEAR UND ER CONSIDERATION AND NOT FOR SUBSEQUENT YEARS. AT THIS JUNCTURE THE LEAR NED COUNSEL FOR THE ASSESSEE ALSO ADVERTED OUR ATTENTION TO PARA 1.3.14 OF THE CIT(A)S ORDER TO SUBMIT THAT THOUGH DISALLOWANCE WAS MADE FOR A .Y. 2003-04 THE AO DID NOT CHOOSE TO RE-OPEN ASSESSMENTS FOR ASSES SMENT YEARS 2002-03 AND 2005-06 AND EVEN ON THAT COUNT IT CAN BE SA ID THAT THE REVENUE HAS ACCEPTED THE COMPUTATION OF WORK-IN-PROGRE SS AS SHOWN BY THE ASSESSEE. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NO T IN DISPUTE THAT THE TAX EFFECT INVOLVED IN THIS APPEAL IS LESS THAN S TIPULATED AMOUNT AND THEREFORE THE INSTRUCTIONS ISSUED BY CBDT ARE BINDING UPON THE REVENUE IN WHICH EVENT THERE IS NO RIGHT OF APPEAL AGA INST ORDER PASSED BY CIT(A). UNDER THESE CIRCUMSTANCES I DISMISS THE D EPARTMENTAL APPEAL ON THIS PRELIMINARY GROUND AS PRONOUNCED IN THE OPEN COURT. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH, 2014. SD/- (D.MANMOHAN) VICE-PRESID ENT (MZ) MUMBAI, DATED 11 TH MARCH, 2014. JV. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI BENCHES, MUMBAI