DCIT, Cir.4(2), Ahmedabad V. Dr. Chaitanya B. Nagori, Ahmedabad

ITA 1964/AHD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3886 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-03-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 31-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P B PARMAR
• Keywords: Tax effect
• Section: 268A

Judgement Text

- , - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.1964/AHD/2017 [ / ASSTT.YEAR : 2013-14] DCIT, CIR.4(2) AHMEDABAD. VS. DR.CHAITANYA B. NAGORI KEDAR OPP: PETROL PUMP NR. PARIMAL GARDEN ELLIS BRIDGE, AHMEDABAD 380 006. PAN : AAVPN 7145 C ( APPLICANT ) ( RESPONENT ) REVENUE BY : SHRI VINOD TANWANI, SR.DR ASSESSEE BY : SHRI P.B. PARMAR, AR / DATE OF HEARING : 02/03/2020 ! / DATE OF PRONOUNCEMENT: 03/03/2020 !/ O R D E R PER RAJPAL YADAV, VICE-PRESIDENT: PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE R EVENUE AGAINST ORDER OF LD.CIT(A)-4, AHMEDABAD DATED 20.6.2017 PASSED FO R THE ASSTT.YEARS 2013- 14. 2. REVENUE HAS RAISED AS MANY AS FOUR GROUNDS IN AP PEAL MEMO, WHICH IN FACT RAISE ONLY ONE ISSUE I.E. THE LD.CIT(A) HAS ER RED IN DELETING THE ADDITION OF RS.3,19,00,000/- MADE BY THE AO UNDER THE HEAD LON G TERM CAPITAL GAIN IN PLACE OF INCOME FROM OTHER SOURCES. 3. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTS ET SUBMITTED THAT TAX EFFECT INVOLVED IN THE PRESENT APPEAL BY VIRTUE OF RELIEF GIVEN BY THE LD.CIT(A) IS LESS THAN RS.50 LAKHS. HE POINTED OUT THAT THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN ON WHICH TAX EFFECT WAS APPLICABL E AT 20%. THE AO DID NOT ACCEPT THIS STAND OF THE ASSESSEE, AND TREATED SUCH GAIN UNDER THE HEAD INCOME FROM OTHER SOURCES. RATE OF TAX ON SUCH T REATMENT IS 30%. THUS, NET TAX DISPUTE RELATES TO 10% OF TAX ON THIS ADDIT ION OF RS.3.19 CRORES. IF WE LOOK INTO THIS NET EFFECTIVE TAX RATE, THEN THE TAX WOULD COME AROUND RS.31 ITA NO.1964/AHD/2017 2 LAKHS, WHICH IS LESS THAN RS.50 LAKHS AS STIPULATED BY THE CBDT IN THE ABOVE CIRCULAR. IN VIEW OF THIS, HE SUBMITTED THAT BY VIRTUE OF REC ENT CBDT CIRCULAR NO.17 OF 2019 DATED 8.8.2019, DEPARTMENT H AS BEEN INSTRUCTED NOT TO FILE APPEAL BEFORE THE TRIBUNAL WHERE TAX EF FECT IS BELOW RS.50 LAKHS. THIS INSTRUCTION IS APPLICABLE TO THE PENDI NG CASES ALSO. THEREFORE, THE PRESENT APPEALS OF THE REVENUE ARE L IABLE TO BE DISMISSED AT THE THRESHOLD. PER CONTRA, THE LD.DR DID NOT D ISPUTE APPLICABILITY OF THE RECENT CBDT CIRCULAR AND HE, HOWEVER, LEFT THE ISSUE TO THE TRIBUNAL TO PASS APPROPRIATE ORDER IN THE MATTER. 4. AFTER HEARING BOTH THE SIDES AND AFTER PERUSAL O F THE ABOVE CBDT INSTRUCTION, WE ARE OF THE VIEW THAT THE PRESENT AP PEAL OF THE REVENUE FALLS WITHIN THE PURVIEW OF THE CBDT INSTRUCTION CI TED (SUPRA). 5. IT IS NOT DISPUTED BY THE REVENUE THAT TAX EFFEC T ON THE DISPUTED ADDITION IS MORE THAN RS.50 LAKHS, AND THEREFORE, K EEPING IN VIEW THE ABOVE CBDT CIRCULAR AND PROVISIONS OF SECTION 268A OF THE INCOME TAX ACT, WE ARE OF THE VIEW THAT THE PRESENT APPEALS OF THE REVENUE DESERVE TO BE DISMISSED. BOTH ARE DISMISSED. HOWEVER, IT IS OBSERVED THAT IN CASE ON RE-VERIFICA TION AT THE END OF THE AO IT CAN BE DEMONSTRATED THAT THE TAX EFFECT I S MORE, OR REVENUES CASE FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRCULAR, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE T RIBUNAL FOR RECALL OF THIS ORDER. SUCH APPLICATION SHOULD BE FILED WITHI N THE TIME PERIOD PRESCRIBED IN THE ACT. IN VIEW OF THE ABOVE, THE A PPEALS OF THE REVENUE ARE DISMISSED DUE TO LOW TAX EFFECT. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D DUE TO LOW TAX EFFECT. ORDER PRONOUNCED IN THE COURT ON 3 RD MARCH, 2020 AT AHMEDABAD. S D / - (T.S. KAPOOR) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED 03/03/2020