ACIT, Chandigarh V. M/s Inscol Healthcare Ltd., Chandigarh

ITA 160/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9217 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 27-07-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 01-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Unexplained expenditure; Depreciation; Tax effect
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI MAHARISHI PRASHANT KUMAR, ACCOUNTANT MEMBE R ITA NO. 160/CHD/2016 (ASSESSMENT YEAR : 2007-08) THE A.C.I.T., VS. M/S INSCOL HEALTHCARE LTD., CIRCLE 4(1), SCO 18-19, SECTOR 34-A, CHANDIGARH. CHANDIGARH. PAN: AAACI3572N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH, DR RESPONDENT BY : SHRI AJAY JAIN DATE OF HEARING : 02.08.2016 DATE OF PRONOUNCEMENT : 02.08.2016 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, CHANDIGARH DATED 14.12.2015 FOR ASSESSMENT YEAR 2007-08, CHALLENGING THE CANCELLATI ON OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TA X ACT, 1961 (IN SHORT THE ACT). 2. AFTER HEARING THE RIVAL CONTENTIONS, WE FIND AS PER GROUNDS OF APPEAL, REVENUE CHALLENGED THE ORDER OF CIT (APPEALS) IN DELETING THE PENALTY UNDER SECTION 2 271(1)(C) OF THE ACT ON DEPRECIATION AMOUNTING TO RS.83,973/- AND UNEXPLAINED EXPENDITURE OF RS.29,05,343/-. THE LEARNED CIT (APPEALS) ON PART OF THE ADDITION ON OTHER HEAD MAINTAINED THE LEVY OF PENAL TY. THEREFORE, THE ISSUE FOR CONSIDERATION REMAINED OF DEPRECIATION AND UNEXPLAINED EXPENDITURE. THE LEAR NED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AFTER THE O RDER OF THE TRIBUNAL IN QUANTUM APPEAL, THE ADDITION OF RS.83,973/- ON DEPRECIATION REMAINED THE SAME BUT T HE ADDITION OF RS.29,05,343/- ON ACCOUNT OF UNEXPLAINE D EXPENDITURE HAS BEEN REDUCED TO RS.6 LACS. THUS, T HE TOTAL ADDITION ON THE ABOVE PENALTY MATTER HAVE BEE N MAINTAINED IN A SUM OF RS.6,83,973/-, ON WHICH THE PENALTY LEVIED WOULD BE RS.2,30,225/-. THE COMPUTA TION IS PLACED ON RECORD. IT IS, THEREFORE, ADMITTED FA CT THAT THE TAX EFFECT IN THE DEPARTMENTAL APPEAL IS LESS T HAN THE PRESCRIBED LIMIT PROVIDED BY THE RECENT CBDT CIRCUL AR. 3. ACCORDING TO CIRCULAR NO.21/2015 DATED 10.12.2015, THE CBDT IN SUPERCESSION OF EARLIER INSTRUCTIONS HAS DIRECTED THAT DEPARTMENTS APPEALS BEFORE ITAT SHALL NOT BE FILED IN CASES WHERE THE TAX EFFE CT DOES NOT EXCEED THE MONETARY LIMIT OF RS.10 LACS. THE T AX WILL NOT INCLUDE ANY INTEREST THEREON. IT IS FURTHER CL ARIFIED THAT IF IN THE CASE OF AN ASSESSEE, DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH T HE TAX 3 EFFECT IN RESPECT OF DISPUTED ISSUES EXCEEDS THE MO NETARY LIMIT SO SPECIFIED. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO B E FILED HENCEFORTH BEFORE THE TRIBUNAL. THE PENDING APPEALS BELOW THE SPECIFIED TAX LIMIT MAY BE WITHDRAWN/NOT PRESSE D. 4. ADMITTEDLY, IN THE DEPARTMENTAL APPEAL, THE TAX EFFECT IS LESS THAN RS.10 LACS, THEREFORE, DEPARTME NTAL APPEAL IS NOT MAINTAINABLE. THE LEARNED CIT (APPEA LS) DECIDED THE ISSUE IN DEPARTMENTAL APPEAL ON FACTS A ND THE CASE OF THE REVENUE WOULD NOT FALL IN THE EXCEPTION S PROVIDED IN THE ABOVE CIRCULAR. 5. IN VIEW OF THE ABOVE, LEARNED D.R. STATED THAT SINCE DEPARTMENTAL APPEAL IS FILED AGAINST THE CBDT INSTRUCTIONS, THEREFORE, HE WOULD NOT BE PRESSING DEPARTMENTAL APPEAL. THEREFORE, THE ABOVE DEPARTME NTAL APPEAL IS DISMISSED BEING NOT PRESSED. 6. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (MAHARISHI PRASHANT KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 ND AUGUST, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH