DCIT, New Delhi V. M/s Fiem Industries Ltd., New Delhi

ITA 203/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3564 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 13-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Assessee Lawyers: V SACHDEV
• Keywords: Depreciation; Question of law; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B DELHI BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 203(DEL)/2011 ASSESSMENT YEAR: 2006-07 DEPUTY COMMISSIONER OF F IEM INDUSTRIES LIMITED, INCOME-TAX, CIRCLE 11(1), VS. D -34, DSIDC PACKAGING NEW DELHI. COMPLEX, KIRI NAGAR, NEW DELHI. PAN-AAACF1034E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KISHORE B, SR. DR RESPONDENT BY : S HRI V. SACHDEV, C.A. ORDER PER K.G. BANSAL : AM THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YE AR 2006-07 ARISES OUT OF THE ORDER OF LD. CIT(APPEALS)-XIII, NEW DE LHI. THE GROUNDS OF APPEAL RAISED ARE REPRODUCED AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 3,77,600/- ON ACCOUNT OF PROFESSIONAL FEES PAID TO M/S U.L. INDIA (P) LTD. TREATING IT AS REVENUE IN NATURE. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 3,13,461/- ON ACCOUNT OF DEPRECIATION ON WORK STATION. ITA NO. 203(DEL)/2011 2 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TAX EFFECT IN THIS CASE IS LESS THAN RS. 3.00 LAKH. THIS POSITION IS ADMITTED BY THE LD. D.R. THEREFORE, AS PER THE INSTRUCTION NO . 3/2011 DATED 09.02.2011 THE REVENUE IS NOT PERMITTED TO FILE APPEAL BEFOR E THE TRIBUNAL IF THE TAX EFFECT IS LESS THAN RS. 3.00 LAKH. HE PLACED REL IANCE ON THE DECISION OF HONBLE SUPREME COURT DATED 25.03.2011 IN ITA NO S. 3 TO 5/2010. ON THE OTHER HAND, LD. DR FOR THE REVENUE SUBMITTED THAT INSTRUCTION NO. 3/2011 IS NOT APPLICABLE FOR THE APPEALS FILED PRIOR TO ISSUE OF THE SAID INSTRUCTIONS. IT IS ALSO SUBMITTED THAT THE DE CISION OF FULL BENCH OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. VIR ENDRA CONSTRUCTION CO., 239 CTR 1, THAT REVISED MONETARY LIMITS ARE N OT APPLICABLE TO THE PENDING APPEALS, IS IN FAVOUR OF THE REVENUE. 3. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE MATERIAL AVAILABLE ON RECORD. INSTRUCTION NO. 3/2011 DATED 09.02.2011 HAS REVISED THE MONETARY LIMIT FOR FILING THE APPEAL BY THE D EPARTMENT BEFORE INCOME- TAX APPELLATE TRIBUNAL, HONBLE HIGH COURTS AND HONBLE SUPREME COURT. MONETARY LIMIT FOR FILING THE APPEAL BEFORE THE T RIBUNAL IS RS. 3.00 LAKH; BEFORE HONBLE HIGH COURT RS. 10.00 LAKH AND BEFOR E HONBLE SUPREME ITA NO. 203(DEL)/2011 3 COURT RS. 25.00 LAKH. HONBLE HIGH COURT IN TH EIR ORDER DATED 25.03.2011 REFERRED TO ABOVE HAS HELD AS UNDER:- IT IS STATED THAT THE TAX IMPACT IN THE PRESENT CASES IS LESS THAN RS. 10.00 LAKHS. THE DEPARTMENT HAS RECENT LY ISSUED AN INSTRUCTION BEARING NO. 3/2011 DATED 09.02.2011, WHICH IS IDENTICAL TO ITS EARLIER INSTRUCTION BEARING N O. 5/2008 DATED 15.05.2008 EXCEPT THAT IN SO FAR AS THE HIGH CO URT IS CONCERNED, THE MONETARY LIMIT IN RESPECT OF APPEA LS WHERE THE QUESTIONS OF LAW RAISED NEED NOT TO BE ANSWERE D, HAS BEEN RAISED FROM RS. 4.00 LAKHS TO RS. 10.00 LAKHS. T HE DIVISION BENCH OF THIS COURT IN ITA NO. 89/1999 DECIDED O N 28.01.2011 HAS ALREADY HELD THAT THE INSTRUCTIO N BEARING NO. 5/2008 DATED 15.05.2008 WOULD APPLY EVEN TO THE OLD PENDING REFERENCES AND APPEALS. THIS PRINCIPLE WOULD TH US NATURALLY EQUALLY APPLY TO THE INSTANT INSTRUCTION BEARING NO.3/2011 DATED 09.02.2011, AS WELL. THE TAX EFFECT BEING LESS THAN RS. 10.00 LAKHS, THE QUESTION OF LAW DOES NOT REQUIRE TO BE ANSWERED. THE APPEALS ARE DISPOSED OF ACCORDING LY. 3.1 LD. AR FOR THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DELHI RACE CLUB LTD. IN ITA NO. 128/2008 DATED 03.03.2011 WHEREIN IT HAS BEEN HELD AS UNDER:- THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS RS. 4,65,860/-. AS PER THE RECENT GUIDELINES OF THE CBDT, APPEA L IN THOSE CASES WHERE THE TAX EFFECT IS LESS THAN RS. 10.0 0 LAKHS, ARE NOT TO BE ENTERTAINED. THIS COURT IN THE CASE OF CIT, DELHI-III VS. M/S P .S. JAIN & CO., BEING ITA NO. 179/1991 DECIDED ON 2 ND AUGUST, 2010 HAS TAKEN A VIEW THAT SUCH CIRCULAR WOULD ALSO APPLY TO PENDING CASES. ITA NO. 203(DEL)/2011 4 3.2 IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT, WHICH IS THE JURISDICTIONAL HIGH COURT IN THIS CASE, IT IS HEL D THAT INSTRUCTION NO. 3/2011 DATED 09.02.2011 WILL APPLY TO ALL PENDING APPE ALS. RESPECTFULLY FOLLOWING THE PRECEDENT, IT IS HELD THAT THE AP PEAL IS NOT MAINTAINABLE IN THE INSTANT CASE AS THE TAX EFFECT IS LESS TH AN RS. 3.00 LAKHS. ACCORDINGLY, IT IS HELD THAT APPEAL FILED BY THE REVENUE IS NO T MAINTAINABLE. 4. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT IS DISMISSED IN LIMINE WITHOUT GOING INTO THE MERITS. 5. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 8.7.2011. SD/- SD/- (RAJPAL YADAV) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 8.7.2011. SP SATIA COPY OF THE ORDER FORWARDED TO:- FIEM INDUSTRIES LTD., NEW DELHI. DCIT, CIRCLE 11(1), NEW DELHI. CIT CIT(APPEALS) THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.