The ACIT, Kheda Circle, Nadiad V. M/s. Milan Associates, Nadiad

ITA 2035/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5976 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 07-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHETAN R SHAH
• Keywords: Business income; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI, MANISH BORAD, ACCOUNTANT MEMBER ./ I.T.A. NOS.2035 & 2036/AHD/2014 ( / ASSESSMENT YEARS : 2010-11 & 2011-12) THE ASSTT. COMMISSIONER OF INCOME-TAX, KHEDA CIRCLE, NADIAD V/S M/S. MILAN ASSOCIATES, 1 ST FLOOR, SARTHAK BUILDING, OPP. SANTOSH BUILDING, SANTRAM ROAD, NADIAD - 387001 (APPELLANT) (RESPONDENT) PAN: AAOFM 2436 L APPELLANT BY : SHRI PRASOON KABRA, SR. D .R. RESPONDENT BY : SHRI CHETAN R. SHAH, A.R. ( )/ ORDER DATE OF HEARING : 24/04/2017 DATE OF PRONOUNCEMENT : 24/04/2017 PER MAHAVIR PRASAD, JUDICIAL MEMBER: 1. THESE TWO APPEALS BY THE REVENUE ARE PREFERRED AGAI NST THE ORDER OF LD. CIT(A)-IV, BARODA DATED 09/04/2014 PERTAINING TO A. YS.2010-11 AND 2011-12. ITA NO. 2035 & 2036/AHD/2014 A.Y. 2010-11 & 2011-12 2 2. THE SUBSTANTIVE GRIEVANCE OF THE REVENUE READS AS U NDER:- I. ON THE FACTS OF THE CASE AND ON THE CIRCUMSTANCES A ND IN LAW, THE CIT(A)-IV, BARODA HAS ERRED IN DELETING THE ADDITIO N OF RS.17,63,898/-(FOR A.Y.2010 -11) & 18,58,900/-(FOR A.Y.2011-12) ON ACCOUNT OF EXCESS CLAIM OF REMUNERATION U/S. 40(B) AND HAS ERRED IN NOT APPRECIATING THAT FOR THE PURPOSE OF SECTION 40 (B)(III) AN EXCLUSIVE DEFINITION OF BOOK PROFIT HAS BEEN PROVID ED IN EXPLANATION 3 WHICH MANDATES THAT ONLY PROFIT COMPUTED AS PER C HAPTER IV-D AND NOT ANY OTHER PROFIT, CAN BE CONSIDERED FOR THE PURPOSE OF REMUNERATION. II. ON THE FACTS OF THE CASE AND ON THE CIRCUMSTANCES A ND IN LAW, THE LEARNED CIT(A)-IV, BARODA HAS ERRED IN IGNORING THE FACT THAT THE ASSESSING OFFICER HAS GIVEN A CATEGORICAL FINDING T HAT SUCH OTHER INCOME OF RS.28,64,812/-(FOR A.Y. 2010-11) & RS.30, 98,165/-(FOR A.Y.2011-12) IS NOT BUSINESS INCOME AND THE LEARNED CIT(A)-IV, BARODA HAS NOT RECORDED ANY ADVERSE FINDING ON THIS . III. THE LEARNED CIT(A)-IV, BARODA HAS ERRED IN RELYING ON THE CASE OF J.J. INDUSTRIES 35 TAXMANN.COM 103(GUJ) AS IN THAT CASE, INTEREST WAS ASSESSED AS BUSINESS INCOME, UNLIKE IN THE PRES ENT CASE WHERE INCOME HAS NOT BEEN ASSESSED AS BUSINESS INCOME. 3. THE LEARNED AR OF THE ASSESSEE POINTED OUT BY WAY O F WRITTEN SUBMISSIONS THAT THE APPEALS OF THE REVENUE ARE NOT MAINTAINABL E ON ACCOUNT OF LOW TAX EFFECT AND, THEREFORE, LIABLE TO BE DISMISSED. THE LD. SR. D.R. FAIRLY ADMITTED THAT THE TAX EFFECT ON THE IMPUGNED ADDITIONS IN AP PEALS IS LESS THAN THE LIMIT PRESCRIBED BY THE CBDT CIRCULAR OF 10/12/2015 BEARI NG NO. 21 OF 2015. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENU E, WE FIND THAT REVENUE IS AGGRIEVED BY THE ORDER OF LEARNED CIT(A) IN RESP ECT OF THE RELIEF GIVEN BY HIM. AS PER THE CIRCULAR OF CENTRAL BOARD OF DIRE CT TAXES (CBDT) DATED 10/12/2015 (CIRCULAR NO. 21 OF 2015), NO DEPARTMENT APPEALS ARE TO BE FILED ITA NO. 2035 & 2036/AHD/2014 A.Y. 2010-11 & 2011-12 3 AGAINST RELIEF GIVEN BY LEARNED CIT(A) BEFORE THE I NCOME TAX TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST EXCEEDS R S. 10 LACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTI VELY TO THE PENDING APPEALS ALSO. IN THE PRESENT CASE, SINCE IT IS AN UNDISPUTE D FACT THAT ON THE ADDITIONS WHICH ARE IN DISPUTE, THE TAX EFFECT IS LESS THAN R S. 10 LACS AND IN THE ABSENCE OF ANY MATERIAL ON RECORD POINTED OUT BY THE REVENU E TO DEMONSTRATE THAT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY EXEMPTION S SPECIFIED IN CLAUSE (8) OF THE AFORESAID CBDT CIRCULAR, WE ARE OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY THE INSTRUCTIONS OF THE AFORESAID CBD T CIRCULAR WOULD BE APPLICABLE TO THE PRESENT APPEALS OF THE DEPARTMENT AND THEREFORE THE PRESENT APPEALS ARE NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. IN SUCH CIRCUMSTANCES, WE DISMISS BOTH THE APPEALS OF REVEN UE WITHOUT EXPRESSING ANY OPINION ON MERITS OF THE CASE. HOWEVER, IN CA SE THERE IS ANY ERROR IN THE COMPUTATION OF THE TAX EFFECT INVOLVED OR IF FOR AN Y REASON, THE AFORESAID CBDT CIRCULAR IS NOT APPLICABLE, IT WOULD BE OPEN T O THE REVENUE TO SEEK REVIVAL OF THE APPEALS. 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED IN LIMINE. ORDER PRONOUNCED IN OPEN COURT ON 24/04/2017 SD/- SD/- (MANISH BORAD) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: 24/04/2017 PRITI ITA NO. 2035 & 2036/AHD/2014 A.Y. 2010-11 & 2011-12 4 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) IV, BARODA 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, AHMEDABAD TURE COPY