The ACIT, Gandhidham Circle, V. Sh. Bhikha P. Agrawal,

ITA 207/RJT/2006

• Counselvise Citation: 20724914 RSA 2006
• Duration Of Justice: 5 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-05-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 18-05-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI RAJ KUMAR
• Assessee Lawyers: J C RANPURA
• Keywords: Gift; Rectification of order; Tax effect
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.207/RJT/2006 (ASSESSMENT YEAR 2002-03) ACIT, GANDHIDHAM CIRCLE VS SHRI BHIKHA P AGRAWAL GANDHIDHAM-KUTCH PLOT NO.24, SECTOR-1 GANDHIDHAM-KUTCH PAN :ABKPA8898P (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI JAI RAJ KUMAR RESPONDENT BY : SHRI JC RANPURA O R D E R PER AL GEHLOT, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-IV, AHMEDABAD DATED 02-02-2006 FOR THE ASSESSMENT YEAR 2002-03. THE FOLLOWING EFFECTIVE GROUND IS RAISED IN THE APPEAL: 1. THE LEARNED CIT(A) HAS ERRED IN LAW & ON FACTS IN FURTHER DELETING THE ADDITION MADE ON ACCOUNT OF NRE GIFT OF RS.5,00 ,000/- VIDE RECTIFICATION ORDER U/S 154 OF THE IT ACT, 1961 PAS SED ON 02.02.2006 REVISING THE ORIGINAL APPELLATE ORDER NO.CIT(A)-IV/ 46.R/CC2/05-06 DATED 18.10.05 WHEREIN THE ADDITION OF RS.5,00,000/- OUT OF TOTAL NRE GIFT OF RS.10,00,000/- RECEIVED FROM SHRI PREMJI VAGHJI VAS ANI WAS UPHELD BY HER. 2. THE LD.AR POINTED OUT THAT TAX EFFECT IN THIS CA SE IS RS.1,84,391 WHICH HAS NOT BEEN DISPUTED BY THE LD.DR. WE FIND THAT UNDER SUC H CIRCUMSTANCES THE ITAT, RAJKOT HAS DISMISSED REVENUES APPEAL IN LIMINE IN ITA NO. 647/RJT/2010 DATED 18-03-2011. THE RELEVANT FINDING IS REPRODUCED AS UNDER: 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF TH E PARTIES AND PERUSED THE RECORD. THE LD.AR OF THE ASSESSEE PLAC ED BEFORE US A COPIES OF BOARDS INSTRUCTIONS NO.5/2008 DATED 15-5-2008 A ND NO.3/2011 (F.NO.279/MISC.142/2007-ITJ) DATED 9-2-2011 AND POI NTED OUT THAT THE BOARD HAS EXPRESSLY PROHIBITED THE DEPARTMENT FROM FILING THE APPEAL BEFORE THE TRIBUNAL IN A CASE WHERE THE TAX EFFECT IS LESS THAN RS.3 LAKHS. THE LD.DR POINTED OUT THAT IN INSTRUCTION NO. 3/2 011 (.NO.279/MISC. 142/2007-ITJ) DATED 09-02-2011 IT HAS BEEN CLEARLY STATED AT PARAGRAPH ITA NO.207/RJT/2006 2 11 THAT THESE INSTRUCTIONS WILL APPLY ONLY IN RESPE CT OF APPEALS FILED ON OR AFTER 15-05-2008 AND THIS APPEAL IS FILED BEFORE TH E INSTRUCTION IS ISSUED. THE SAID CLAUSE READS AS FOLLOWS: 11. THIS INSTRUCTION WILL APPLY TO APPEALS FILED O N OR AFTER 15 TH OF MAY 2008. HOWEVER, THE CASES WHERE APPEALS HAVE BEEN F ILED BEFORE 15 TH OF MAY 2008 WILL BE GOVERNED BY THE INSTRUCTIONS ON TH IS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 3. ON THE OTHER, THE LD.AR FILED A COMPARATIVE CHAR T OF BOTH THE INSTRUCTIONS, I.E. INSTRUCTIONS INSTRUCTIONS NO.5/2 008 DATED 15-5-2008 AND NO.3/2011 (F.NO.279/MISC.142/2007-ITJ) DATED 9-2-20 11. HE SUBMITTED THAT IN INSTRUCTION DATED 15-05-2008 SIMILAR CLAUSE WAS ALREADY THERE. APART FROM THIS, THE BOMBAY HIGH COURT IN THE CASE OF CIT VS PITHWA ENGG WORKS 276 ITR 519 (BOM) HELD THAT THE CENTR AL BOARD OF DIRECT TAXES BY ITS CIRCULAR DATED MARCH 27,2000, HAS TAKE N A POLICY DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT IS LESS TH AN RS.2 LAKHS. THE CIRCULAR IS APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMENT CANNOT CONTEND THAT CIRCULAR IS BINDING ONLY WITH RESPECT TO THE NEW CASES AND NOT WITH RESPECT TO THE OLD REFER RED CASES EVEN IF THE TAX IS LESS THAN RS.2 LAKHS. THE SAME POLICY FOR O LD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN THE LIGHT OF THE JU DGMENT OF THE BOMBAY HIGH COURT WE FIND THAT THE INSTRUCTION DATED 09-02 -2011 IS APPLICABLE TO APPEALS FILED BEFORE ISSUANCE OF INSTRUCTION DATED 09-02-2011. 4. IN THIS VIEW OF THE MATTER, AND IN THE LIGHT OF THE JUDGMENT OF THE BOMBAY HIGH COURT CITED SUPRA, WE DISMISS THE APPEA L FILED BY THE REVENUE AS NOT MAINTAINABLE SINCE THE TAX EFFECTIVE INVOLVED IN THE APPEAL IS BELOW RS.3 LAKHS. 3. WE FOLLOW THE ABOVE ORDER OF ITAT AND IN THE LIG HT OF THAT THE APPEAL FILED BY THE REVENUE IS DISMISSED IN LIMINE. ORDER PRONOUNCED IN THE OPEN COURT ON 27-05-2011. SD/- SD/- (N.R.S. GANESAN) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT, DT : 27 TH MAY, 2011 PK/- ITA NO.207/RJT/2006 3 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT(A)-IV, AHMEDABAD 4. THE CIT 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT