ITO, New Delhi V. M/s Oddette Builders & Constructions Pvt Ltd, New Delhi

ITA 1988/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3676 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 01-07-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 30-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRENDER KUMAR; BANITA DEVI NEORM
• Keywords: Tax effect

Judgement Text

I.T.A. NO.1988 /DEL/10 1/3 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.1988 /DEL/2010 ASSESSMENT YEAR : 2006-07 ITO, M/S ODDETTE BUILDERS & WARD-13 (4), CONSTRUCTION CO. PVT. LTD. NEW DELHI. V. 1-E, JHANDEWALAN, N. DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO.AAACO-8204-B APPELLANT BY : SHRI AMRENDER KUMAR, SR. DR & SMT. BANITA DEVI NEORM, SR. DR. RESPONDENT BY : NONE. ORDER PER A.K. GARODIA, AM: THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE C IT (A)-XVIII, NEW DELHI DATED 18.2.2010 FOR ASSESSMENT YEAR 2006-07. THE GR OUNDS RAISED BY THE REVENUE READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.5,96,907/- MADE BY THE ASSESSING OFFICER TREATING THE INTEREST EARNED ON I NVESTMENTS MADE IN DEBENTURES UNDER THE HEAD INCOME FROM OTHER SOU RCES. THE HON'BLE SUPREME COURT IN THE CASE OF M/S TUTICORN A LKALIS CHEMICALS AND FERTILIZERS LTD. HAS HELD THAT IF THE UNUTILIZED FUNDS ORIGINALLY ARRANGED FOR EFFECTING THE MAIN OBJECTS ARE INVESTED ELSEWHERE AND INTEREST IS EARNED THEREON, THE SAME CANNOT BE CATEGORIZED AS INCOME FROM BUSINESS AND PROFESSION BUT IS TO BE TAKEN AS INCOME FROM OTHER SOURCES. 2. AT THE VERY OUT SET, IT WAS SUBMITTED BY THE LD AR OF THE ASSESSEE THAT IN THE PRESENT CASE, THE TAX EFFECT OF THE DISPUTE IS BELOW RS. 2 LAKHS AND HENCE THIS . I.T.A. NO.1988/DEL/10 2/3 APPEAL OF THE REVENUE IS NOT MAINTAINABLE IN VIEW O F THE BOARDS CIRCULAR. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF THE HON 'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT V. ZOEB Y. TOPIWALA REP ORTED AS 284 ITR 379. 3. THE LD DR OF THE REVENUE HAD NOTHING TO SAY. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE TAX EFFECT IN THE PRESE NT CASE IS BELOW RS.2 LAKH SINCE THE TOTAL INCOME WAS ASSESSED AT RS. 5,96,907/- AGA INST NIL INCOMES DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. HENCE, THE RE LIEF ALLOWED BY LD CIT(A) IS OF RS.5,96,907/- ONLY FOR WHICH TAX LIABILITY @ 30% + SURCHARGE @ 10% OF TAX CANNOT BE MORE THAN RS.2 LAKHS. IT COMES TO RS.1,96 ,980/- ONLY. AS PER THE INSTRUCTION NO. 1979 OF THE CBDT DATED 27.3.2000, T HE DEPARTMENT SHOULD NOT RAISE THE DISPUTE BEFORE THE TRIBUNAL IF THE TAX EF FECT OF THE DISPUTE IS BELOW RS.2 LAKH. IT WAS HELD BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. ZOEB Y. TOPIWALA (SUPRA) THAT THE BOARDS CIRCULAR IS BINDI NG ON THE REVENUE. UNDER THESE CIRCUMSTANCES, WE HOLD THAT THIS APPEAL OF REVENUE IS NOT MAINTAINABLE IN VIEW OF THE BOARDS CIRCULAR AND THE JUDGMENT OF THE HON'BL E BOMBAY HIGH COURT. THEREFORE, WE DISMISS THIS APPEAL OF THE REVENUE AS NOT MAINTAINABLE. 5. IN THE RESULT, THIS APPEAL OF THE REVENUE STANDS DISMISSED. 6. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE O F HEARING I.E. IST JULY, 2010. SD/- SD/- (C.L. SETHI) (A.K. GA RODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 01.7.2010. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. (ITAT, NEW DELHI). . I.T.A. NO.1988/DEL/10 3/3