Income Tax Officer International taxation Ward-1(1), Bangalore V. Shri Vinay Kumar Bagare , Bangalore

ITA 1546/BANG/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3195 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 12-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SASHIDHAR
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Tax effect
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER IT(IT)A NO.1546/BANG/2017 (ASST. YEAR 2013-14) THE INCOME-TAX OFFICER, INTL. TAXN. WAR-1(1) BENGALURU . APPELLANT VS. SHRI VINAY KUMAR BAGARE, SRIHARI MULE, FLAT NO.B-312, SJR LUXURIA, IIM POST, ARAKERE, BANGALURU. . RESPONDENT PAN ADVPB7643L. APPELLANT BY : SHRI SASHIDHAR, JCIT RESPONDENT BY : SHRI S.V RAVISHANKAR, ADVOCATE DATE OF HEARING : 20-8-2018 DATE OF PRONOUNCEMENT : 21-8-2018 O R D E R PER SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A), INTER ALIA , ON FOLLOWING GROUNDS: ITA NO.1546/B/17 2 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX( APPEALS)-12, BENGALURU IS CONTRARY TO THE LAW AND FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX( APPEALS)-12, BENGALURU OUGHT TO HAVE CONSIDERED THE FACT THAT IN VIEW OF THE STATUTORY PROVISIONS OF SE CTION 54, THE RESIDENTIAL HOUSE MUST BE IN INDIA. 3. THE LEARNED COMMISSIONER OF INCOME TAX( APPEALS)-12, BENGALURU FAILED TO APPRECIATE THE FAC T THAT IN VIEW OF SETTLED RULING OF INTERPRETATION OF TAX STATUTE, THE RESIDENTIAL HOUSE PURCHASED/ CONSTRUCTED MUST B E IN INDIA AND NOT OUTSIDE INDIA. 4. THE LEARNED COMMISSIONER OF INCOME TAX( APPEALS)-12, BENGALURU FAILED TO CONSIDER THE MEMORANDUM EXPLAINING PROVISIONS IN THE FINANCE BIL L 1982 THAT THE EXEMPTION IN SECTION 54 G RANTED WITH A VIEW TO ENCOURAGING HOUSE CONSTRUCTION. THIS WOULD NATURATI5 MEAN THAT HOUSE CONSTRUCTION/ PURCHASE WOULD BE ENCOURAGED BY PROVISIONS OF THIS SECTION I N INDIA AND NOT OUTSIDE INDIA. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-12, BENGALURU MAY BE CANCELLED AND THA T OF THE AO MAY BE RESTORED. ITA NO.1546/B/17 3 2. AT THE OUTSET, IT IS OBSERVED THAT THE TAX EFFE CT INVOLVED IN THIS APPEAL IS BELOW RS.20 LAKHS. THE CBDT, WITH A VIEW TO REDUCE UNNECESSARY LITIGATION ON THEIR PART, HAS IS SUED A CIRCULAR NO. 3/2018 DATED 11 TH JULY, 2018, WHEREIN THEY HAVE REVISED THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPART MENT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, HIGH COURTS AND SUPR EME COURT. INSOFAR AS THE TRIBUNAL IS CONCERNED, THE MONETARY LIMIT SPECIFIED THEREIN IS RS.20 LAKHS AND THE CONCERNED AUTHORITY HAS TO WITHDRAW ITS APPEAL OR IT NEED NOT PRESS THE SAME I F TAX EFFECT IS LESS THAN RS.20 LAKHS. IT IS FURTHER SPECIFIED THA T THE TAX EFFECT INDICATED THEREIN IS APPLICABLE TO ALL PENDING APPE ALS, THOUGH THEY ARE FILED BY THE REVENUE PRIOR TO THE ISSUANCE OF T HE SAID CIRCULAR. IT WAS ALSO CLARIFIED THAT THE ASSESSING OFFICER HA S TO CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUE/S IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUE ARISES IN M ORE THAN ONE YEAR(S), APPEAL(S) CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR(S) IN WHICH TAX EFFECT IN RESPECT OF THE DISPU TED ISSUE EXCEEDS THE MONETARY LIMIT SPECIFIED. IN OTHER WOR DS, IF THERE ARE A NUMBER OF YEARS, IF THE TAX EFFECT IS LESS THAN T HE SPECIFIED LIMIT IN ONE YEAR, APPEAL CANNOT BE FILED OR THE SAME HAS TO BE WITHDRAWN FOR THAT YEAR, FOR WANT OF TAX EFFECT. H OWEVER, AN EXCEPTION IS MADE TO THIS DIRECTION WITH REGARD TO A COMBINED ORDER PASSED BY THE FIRST APPELLATE AUTHORITY. IF IN ONE OF THE YEARS THE TAX EFFECT IS MORE THAN RS.20 LAKHS AND T HE REVENUE ITA NO.1546/B/17 4 DECIDES TO FILE AN APPEAL, IN RESPECT OF OTHER YEAR S COVERED BY THE SAID ORDER ALSO, REVENUE IS ELIGIBLE TO FILE APPEAL , EVEN THOUGH THE TAX EFFECT IN EACH OF THOSE YEARS IS LESS THAN RS.20 LAKHS. IT WAS ALSO CLARIFIED THAT MERELY BECAUSE THE APPEAL I S DISMISSED FOR WANT OF TAX EFFECT, IT DOES NOT COME IN THE WAY OF THE DEPARTMENT IN FILING APPEAL FOR OTHER YEARS(S), AND IT DOES NOT MEAN THAT THE DEPARTMENT HAS ACQUIESCED THE ISSUE. 3. THE ABOVE CIRCULAR WAS SPECIFICALLY MADE APPLICA BLE TO ALL PENDING APPEALS. IN THE PRESENT CASE, THE TAX EFFE CT ON THE ADDITION IN DISPUTE, WHICH WAS DELETED BY THE CIT(A ) BY THE IMPUGNED ORDER IS INDISPUTABLY BELOW 20LAKHS. 4. THE LEGISLATURE IN ITS WISDOM HAS INTRODUCED SEC TION 268A OF THE INCOME TAX ACT, 1961, WHEREBY THE BOARD IS E MPOWERED TO ISSUE ORDERS/INSTRUCTIONS/DIRECTIONS TO THE INCO ME-TAX AUTHORITIES, FIXING THE MONETARY LIMITS FOR THE PUR POSE OF REGULATING THE FILING OF APPEALS. IN THE LIGHT OF THE CIRCULAR DATED 11.07.2018, ISSUED BY THE CBDT IN EXERCISE OF THE P OWERS CONFERRED IN IT BY SUBSECTION (1) OF SECTION 268A, WE ARE OF THE VIEW THAT THE APPEAL FILED HEREIN SHOULD NOT HAVE B EEN PRESSED BY THE REVENUE. THE LEARNED DEPARTMENTAL REPRESENT ATIVE FAIRLY ADMITTED THAT THE REVENUE EFFECT IN THIS APP EAL IS LESS THAN THE PRESCRIBED LIMIT IN PARA-3 OF THE ABOVE CIRCULA R ISSUED BY THE ITA NO.1546/B/17 5 CBDT. HAVING REGARD TO THE CIRCUMSTANCES OF THE CA SE, WE DISMISS THE APPEAL OF THE REVENUE. 5. HOWEVER, THE REVENUE IS AT LIBERTY TO MOVE APPRO PRIATE APPLICATION/PETITION IN CASE IT IS FOUND THAT THE C ASE IS COVERED BY ONE OF THE EXCEPTION(S) CARVED OUT IN THE SAID CIRC ULAR. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21ST AUGUST, 2018 . SD/- SD/- (JASON P BOAZ) ( SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED : 21/08/2018 VMS COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER SR. PRIVA TE SECRETARY, ITAT, BANGALORE. ITA NO.1546/B/17 6 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR. P. S ... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. + 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADIN G THE ORDER ON WE BSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT.. 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPAT CH OF ORDER. ..