ACIT, Panipat V. M/s. Jindal Fibers, Panipat

ITA 1838/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0075 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 28-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Proportionate interest; Deemed dividend; Tax effect
• Section: 2(22)(e); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA NO.1838/DEL/2017 (FOR ASSESSMENT YEAR : 2012-13) ACIT CIRCLE, PANIPAT PAN NO. AADFJ 7652 A VS. M/S. JINDAL FIBRES E-1, INDUSTRIAL AREA, PANIPAT (APPELLANT) (RESPONDENT) A SSESSEE BY -- NONE -- RE VENUE BY SHRI KUMAR PRANAV , SR. D.R. DATE OF HEARING: 22 / 0 7 /202 1 DATE OF PRONOUNCEMENT: 22 / 0 7 /202 1 ORDER PER SUCHITRA KAMBLE, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 16.01.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- KARNAL RELATING TO ASSESSMENT YEAR 2012-13. 2. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEALS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A), KARNAL HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.54,20,361/- MADE BY THE AO U/S 2(22)(E) ON ACCOUNT OF DEEMED DIVIDEND SINCE THERE ARE ONLY A FEW SALE PURCHASE TRANSACTIONS AND THE REST ARE ACTUALLY LOANS AND ADVANCES. 2. FURTHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A), KARNAL HAS ALSO ERRED IN LAW IN DELETING THE ADDITION OF ITA NO.1838/DEL/2017 ACIT VS. JINDAL FIBERS. A.Y. 2012-13 2 RS.54,09,565/- MADE BY THE AO U/S 2(22)(E) ON ACCOUNT OF DEEMED DIVIDEND AS PER THE INFORMATION SUBMITTED BY THE ASSESSEE AT TIME OF ASSESSMENT PROCEEDINGS. 3. FURTHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A), KARNAL HAS ALSO ERRED IN LAW IN DELETING THE DISALLOWANCE OF PROPORTIONATE INTEREST OF RS.5,48,592/- MADE BY THE AO ON ACCOUNT OF NEGATIVE PARTNER CAPITAL. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 3. AT THE TIME OF HEARING, WE INQUIRED FROM THE LD. DR AS TO WHETHER THE TAX EFFECT OF THE GROUNDS RAISED BY REVENUE IS LESS THAN THE MONETARY LIMIT PRESCRIBED BY CBDT FOR FILING THE APPEALS TO WHICH HE FAIRLY ADMITTED THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT PRESCRIBED BY CBDT FOR FILING THE APPEALS. 4. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIAL ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENUE, WE FIND THAT REVENUE IS AGGRIEVED BY THE ORDER OF LEARNED CIT(A) IN RESPECT OF THE RELIEF GIVEN BY HIM. WE FIND THAT CBDT VIDE CIRCULAR NO. 3/2018 DATED 11.07.2018 HAD INCREASED THE LIMIT FOR FILING APPEAL BEFORE ITAT AT RS. 20 LAKHS. THE LIMIT FOR FILING APPEALS BEFORE ITAT AND OTHER AUTHORITIES WERE ENHANCED BY CBDT VIDE CIRCULAR NO.17 OF 2019 DATED 08.08.2019. AS PER THE AFORESAID CBDT CIRCULAR DATED 08.08.2019, NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF GIVEN BY THE LEARNED CIT(A) BEFORE THE INCOME TAX APPELLATE TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST, EXCEEDS RS.50 LAKHS. WE FIND THAT IN THE PRESENT CASE, THE TAX EFFECT INVOLVED IS LESS THAN RS.50 LAKHS. IN THE ABSENCE OF ANY MATERIAL PLACED ON RECORD BY THE REVENUE TO DEMONSTRATE THAT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY ITA NO.1838/DEL/2017 ACIT VS. JINDAL FIBERS. A.Y. 2012-13 3 EXCEPTIONS PROVIDED IN PARA 10 OF THE AFORESAID CBDT CIRCULAR OF 11.07.2018, WE ARE OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY THE INSTRUCTIONS OF THE CDBT CIRCULAR DATED 08.08.2019 WOULD BE APPLICABLE TO THE PRESENT APPEAL OF THE DEPARTMENT. WE THEREFORE HOLD THE PRESENT APPEAL OF REVENUE TO BE NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. HOWEVER, IN CASE THERE IS ANY ERROR IN THE COMPUTATION OF THE TAX EFFECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT CIRCULAR IS NOT APPLICABLE, IT WOULD BE OPEN TO THE REVENUE TO SEEK REVIVAL OF THE APPEAL. THUS THE APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.07.2021, IMMEDIATELY AFTER CONCLUSION OF THE HEARING OF THE MATTER IN VIRTUAL MODE. SD/- SD/- (ANIL CHATURVEDI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:- 22.07.2021 PY* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI