The ACIT, Circle-5, RAJKOT-GUJARAT V. M/s. Jayshree Vyapar Ltd., RAJKOT-GUJARAT

ITA 171/RJT/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2776 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 10-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Audit objection; Tax effect
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 171/RJT/2014 ASSESSMENT YEAR : 2006-07 ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-5, RAJKOT VS M/S. JAYSHREE VYAPAR LTD., AJAY MANSION, MALAVIYA ROAD, OPP. SAURASHTRA COLD STORAGE, RAJKOT-360 002 PAN : AAACJ 7173 J / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI PRAVEEN VERMA, SR DR ASSESSEE BY : WRITTEN SUBMISSION / DATE OF HEARING : 28/08/2018 / DATE OF PRONOUNCEMENT: 28/08/2018 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER :- 1. THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE O F THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A)-IV, RAJKOT DATED 20.12. 2013 PASSED FOR ASSESSMENT YEAR 2006-07. 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEA L:- 1. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE OF RS 46,57,1 41/-MADE BY THE AO U/S 14A R.W.S. 8D TO RS 5,38,407/- @ 10% OF THE TOTAL INTER EST PAID OF RS 53,84,078/-, IN VIEW OF THE DECISION OF KARNATAKA HIGH COURT IN THE CASE OF CCL LTD. VS. JCIT(250 CTR 291) WHICH OVERRIDES THE DECISION OF T HE SPECIAL BENCH MUMBAI TRIBUNAL IN THE CASE OF M/S DAGA CAPITAL MANAGEMENT (P) LTD. 2. THE LD. CIT(A) HAS HELD THAT THE RATIO OF JUDG MENT OF THE HON'BLE SPECIAL BENCH, ITAT MUMBAI IN THE CASE OF M/S DAGA CAPITAL MANAGEMENT (P) LTD.(117 ITD169) IS NO MORE APPLICABLE IN VIEW OF T HE JUDGMENT OF HON'BLE ITA NO. 171/RJT/2014 ACIT VS.JAYSHREE VYAPAR LTD AYS : 2006-07 2 KARNATAKA HIGH COURT IN THE CASE OF CCL LTD VS. JCI T (250CTR 291) AND HENCE RULE 8D WOULD APPLY W.E.F. AY 2008-09 IGNORED THAT THE COMMISSION AND JOB WORK EXPENSES WERE PAID BEFORE MARCH 2006 BUT N OT DEPOSITED INTO GOVERNMENT ACCOUNT BEFORE 31.03.2006. THE LD. CIT OUGHT TO HAVE UPHELD THE DISALLOWANCE U/S 14A R.W.S. 8D IN VIEW OF DECISION OF BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MANUFACTURING CO. 328 ITR 81 AND DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE DHANUKA & SONS AND DH SECURITIES (P) LTD VS. DOT. 3. NONE APPEARED BEFORE US ON BEHALF OF THE ASSESSE E AT THE TIME OF HEARING; HOWEVER, LEARNED COUNSEL FOR THE ASSESSEE FILED WRI TTEN SUBMISSIONS ON 27.08.2018 WHEREBY HE POINTED OUT THAT THE APPEAL O F THE REVENUE NEEDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF T HE CBDT CIRCULAR NO.3 OF 2018 DATED 11.07.2018. LEARNED COUNSEL FOR THE ASS ESSEE ALSO SUBMITTED THAT IN THE PRESENT CASE THE TAX EFFECT IS RS.13,59,182/-, WHICH IS BELOW THE PRESCRIBED LIMIT OF RS.20 LACS. THE LEARNED DEPARTMENTAL REPR ESENTATIVE FAIRLY ADMITTED THAT THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIB ED BY THE AFORESAID CBDT CIRCULAR. 4. HAVING HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THAT PRIMA- FACIE THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE IN VIEW OF THE RECENT C BDT CIRCULAR NO. 3/2018 IN F.NO.279/MISC. 142/2007-ITJ (PT) DATED 11TH JULY, 2 018, VIDE WHICH IT HAS BEEN DECIDED BY THE BOARD THAT NO DEPARTMENTAL APPEALS S HOULD BE FILED BEFORE THE TRIBUNAL IF THE TAX EFFECT BY VIRTUE OF THE COMMISS IONER OF INCOME-TAX (APPEALS)S ORDER IS BELOW RS. 20 LACS. THE BOARD HAS PROVIDED EXEMPTIONS AT CLAUSE (10) OF THE INSTRUCTIONS WHEREIN IT HAS BEEN PROVIDED THAT THESE INSTRUCTIONS WILL NOT BE APPLICABLE, WHERE THE CONS TITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT/RULE IS UNDER CHALLENGE OR WHE RE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPT ED BY THE DEPARTMENT OR WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN A SSETS/BANK ACCOUNTS ETC. WE ITA NO. 171/RJT/2014 ACIT VS.JAYSHREE VYAPAR LTD AYS : 2006-07 3 FIND THAT THE PRESENT CASE DOES NOT FALL WITHIN THE EXEMPTION CLAUSE AND THE TAX EFFECT IS LESS THAN RS.20 LACS. THEREFORE, THE PR ESENT APPEAL IS NOT MAINTAINABLE AND HENCE DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS THUS DISMISSED IN LIMINE . ORDER PRONOUNCED IN THE COURT ON 28 TH AUGUST, 2018 AT AHMEDABAD. SD/- SD/- ( WASEEM AHMED ) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED 28/08/2018 *BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. , / DR, ITAT, RAJKOT 6. & / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) ' #, / ITAT, RAJKOT 1. DATE OF DICTATION- 28.08.2018 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.08.2018 OTHER MEMBER 28.08.2018. 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - 28.08.2018 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 28.08.2018.. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK28. 08.2018 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER 8. DATE OF DESPATCH OF THE ORDER