The ITO, Ward-3(1), JAMNAGAR V. Shri Chandrakant Kalidas Thakker, JAMNAGAR

ITA 162/RJT/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94039 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Keywords: Business income; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ./ ITA NO.162 AND 163/RJT/2014 / ASSTT. YEAR: 2008-09 ITO, WARD - 3(1) JAMNAGAR. VS SHRI CHANDRAKANT KALIDAS THAKKER 502, SHREDHAN PALACE OPP: TOWNHALL, JAMNAGAR. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI AVINASH KUMAR, AR / DATE OF HEARING : 25/05/2015 / DATE OF PRONOUNCEMENT: 25/05/2015 / O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST ORDERS OF THE CIT(A), JAMNAGAR BOTH DATED 12.12.2013 FOR ASSTT.YEAR 2008-09. BOTH THE APPEAL S ARE DISPOSED OF BY THIS CONSOLIDATED ORDER. ITA NO.162/RJT/2009 2. BRIEF FACTS OF THE CASE ARE THAT THE AO TREATED INCOME FROM SALE AND PURCHASE OF SHARES OF RS.7,36,883/- SHOWN BY TH E ASSESSEE AS LONG TERM CAPITAL GAIN, AS BUSINESS INCOME. 3. ON APPEAL, THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE AND HELD THAT THE GAIN FROM PURCHASE AND SALE OF SHARES WAS TO BE TREATED AS LONG TERM CAPITAL. 4. BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. ITA NO.162/RJT/2014 (2 APPEALS) 2 5. THE DR, IN THE COURSE OF HEARING, ADMITTED THAT TAX EFFECT IN THIS APPEAL IS LESS THAN RS.3 LAKHS, AND THEREFORE, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE, IN VIEW OF INSTRUCTION NO. 3/2011 DATED 09.02.2011 ISSUED BY THE CENTRAL BOARD OF DIRECT TA XES (CBDT). THE DR COULD NOT POINT OUT ANY EXCEPTIONS PROVIDED IN T HE ABOVE CBDT INSTRUCTIONS. THEREFORE, WE DISMISS THE APPEAL OF THE REVENUE, BEING TAX EFFECT LESS THAN RS.3 LAKHS, AS NOT MAINTAINABL E. ITA NO.163/RJT/2009 6. BRIEF FACTS OF THE CASE ARE THAT THE AO LEVIED P ENALTY OF RS.1,82,620/- UNDER SECTION 271(1)(C) OF THE ACT, A FTER TREATING LONG TERM CAPITAL GAIN OF RS.7,36,883/- AS BUSINESS INCO ME OF THE ASSESSEE. 7. ON APPEAL, THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE AND HELD THAT THE GAIN FROM PURCHASE AND SALE OF SHARES WAS TO BE TREATED AS LONG TERM CAPITAL. 8. BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 9. THE DR BEFORE US AGREED THAT THE TAX EFFECT IN T HE PRESENT APPEAL IS BELOW RS.3 LAKHS, AND THEREFORE, THE APPEAL FILE D BY THE REVENUE IS NOT MAINTAINABLE, IN VIEW OF THE CBDT INSTRUCTION N O.3/2011 DATED 9.2.2011. THE DR COULD NOT POINT THAT THE APPEAL O F THE REVENUE WAS COVERED BY THE EXCEPTIONS PROVIDED IN THE ABOVE CBD T INSTRUCTION. WE FIND THAT THE ABOVE CBDT INSTRUCTION NO.5 OF 10.7.2 014, WHILE RESTRICTING THE FILING OF THE APPEAL BY THE REVENUE , INTER ALIA , PROVIDES AS UNDER: 4. FOR THIS PURPOSE, 'TAX EFFECT' MEANS THE DIFFER ENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX TH AT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST W HICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'D ISPUTED ISSUES'). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THERE ON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUT E. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUT E, THE AMOUNT OF ITA NO.162/RJT/2014 (2 APPEALS) 3 INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RE TURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS AS INCOME, THE T AX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. IN VIEW OF THE ABOVE RESTRICTION CONTAINED IN THE C BDT CIRCULAR FOR FILING OF THE APPEAL BY THE REVENUE, THE APPEAL OF FILED B Y THE REVENUE IS NOT MAINTAINABLE, AS THE TAX EFFECT IS LESS THAN RS.3 L AKHS, AND WE DISMISS THE APPEAL OF THE REVENUE ACCORDINGLY. 10. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED IN LIMINE . ORDER PRONOUNCED IN THE COURT ON MONDAY THE 25 TH MAY, 2015 AT RAJKOT. SD/- SD/- ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 25/5/2015