ITO, Faridabad V. Sh. B.K. Mukherjee, Prop., Faridabad

ITA 2110/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90871 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 29-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Depreciation; Business expenditure; Bad and doubtful debts; Tax effect
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A , NEW DELHI BEFORE SH. N. K. SAINI , AM AND SH. A. T. VARKEY , JM ITA NO. 2110/DEL/2011 : ASSTT. YEAR : 2004 - 05 INCOME TAX OFFICER , WARD - 1(2 ), CGO COMPLEX, NH - IV, FARIDABAD VS SH. B. K. MUKHARJEE PROP. M/S TECHNO THERMA INDUSTRIES, 406, SECTOR - 14, FARIDABAD (APPELLANT) (RESPONDENT) PAN NO. ABOPM2759B ASSESSEE BY : SH. RAKESH GUPTA , ADV. REVENUE BY : SH . B. R. R . KUMAR , SR. DR DATE OF HEARING : 20 . 04 .2015 DATE O F PRONOUNCEMENT : 20 .04 .2015 ORDER PER N.K . SAINI , A.M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER DATED 27.01.2011 OF THE LD. CIT(A) , FARIDABAD . 2. THE GROUNDS RAI SED IN THE APPEAL OF THE DEPARTMENT READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 2,54,902/ - OUT OF JOB WORK CHARGES PAID TO M/S BGM ENGINEERS (RS. 1,29,112/ - ) AND PAID TO M/S ECONOMY HEAT TREATMENT (RS. 1,25,970/ - ) MADE BY THE AO AS THE ASSESSEE COULD NOT FURNISH EVIDENCE OF THE JOB WORK GOT DONE FROM THE SISTER CONCERNS. ITA NO.2110 /DE L/2011 B. K. MUKHERJEE 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER O F INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 16,752/ - OUT OF TOTAL ELECTRICITY EXPENSES OF RS. 67,009/ - ON A/C OF USE OF ELECTRICITY FOR DOMESTIC PURPOSES WHICH CANNOT BE ALLOWED AS A BUSINESS EXPENDITURE. 3. ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 4,09,555/ - MADE Y AO ON ACCOUNT OF SALARY AND WAGES AS THE ASSESSEE DID NOT MAINTAIN SALARY REGISTER AND THE EXISTENCE OF THE EMPLOYEES COULD NOT BE VER IFIED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 40,000/ - MADE BY AO ON ACCOUNT OF BONUS AS THE ASSESSEE HAS FAILED TO FURNISH THE GENUINENESS OF EXPENSES AND D OCUMENTARY EVIDENCES OF ACTUAL PAYMENT OF BONUS. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 3,64,636/ - MADE BY AO ON ACCOUNT OF BAD DEBTS WRITTEN OFF SINCE THE A SSESSEE FAILED TO FURNISH ANY EVIDENCE REGARDING THE EFFORTS MADE FOR RECOVERY OF THESE DEBTORS. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 21,140/ - MADE BY AO 1 /5 TH OF VEHICLE EXPENSES AND DEPRECIATION OF RS. 1,05,703/ - BEING PERSONAL USE OF VEHICLE FOR OTHER THAN THE BUSINESS PURPOSES. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITI ON OF RS. 59,238/ - MADE BY AO ON ACCOUNT OF 7 SUPPLIERS SHOW BALANCES WERE APPEARING AS ON 31.03.2004 ITA NO.2110 /DE L/2011 B. K. MUKHERJEE 3 SINCE THESE CREDITORS COULD NOT CONFIRM AND THE CREDITORS CLAIMED WERE NOT FOUND TO BE GENUINE. 8 . THAT T HE APPELLANT CRAVES FOR THE PERMISSION TO ADD, D ELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF THE HEARING OF APPEAL . 3. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS.4 ,00,000/ - , THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED THIS APPEAL IN VIEW OF THE CIRCULAR ISSUED BY THE CBDT AND THE PROVISIONS CONTAINED IN SECTION 268A OF THE INCOME TAX ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT). 4. ON THE OTHER HAND, THE LD. D.R., ALTHOUGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THIS FACT THAT TAX EFFECT IN THIS APPEAL IS LESS THAN RS.4 ,00,000/ - . 5 . AFTER CONSIDERING THE SUBMISSIONS OF THE LD. D.R. AND THE MATERIAL ON RECORD, IT IS NOTICED THAT SECTION 268A HA S BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETRO SPECTIVE EFFECT FROM 01/04/99. THE PROVISIONS CONTAINED IN SECTION 268A READ AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME - TAX AUTHORITIES , FIXING SUCH MONETARY LIMITS AS IT MAY ITA NO.2110 /DE L/2011 B. K. MUKHERJEE 4 DEEM FIT, FOR THE PURPOSE OF REGULATING FILING OF APPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME - TAX AUTHORITY UNDER THE PROVISIONS OF THIS CHAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIO NS ISSUED UNDER SUB - SECTION (1), AN INCOME - TAX AUTHORITY HAS NOT FILED ANY APPEAL OR APPLICATION FOR REFERENCE ON ANY ISSUE IN THE CASE OF AN ASSESSEE FOR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORITY FROM FILING AN APPEAL OR APPLICATION FOR RE FERENCE ON THE SAME ISSUE IN THE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR; OR ( B ) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR. (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION FOR REFERENCE HAS BEEN FILED BY AN INCOME - TAX AUTHORITY PURSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1), IT SHALL NOT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME - TAX AUTHORITY HAS ACQUIESCED IN THE DECISION ON TH E DISPUTED ISSUE BY NOT FILING AN APPEAL OR APPLICATION FOR REFERENCE IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1) AND THE CIRC UMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NOT FILED IN RESPECT OF ANY CASE. ITA NO.2110 /DE L/2011 B. K. MUKHERJEE 5 (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH HAS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR FILING AN APPEAL OR APPLICATION FOR REFER ENCE SHALL BE DEEMED TO HAVE BEEN ISSUED UNDER SUB - SECTION (1) AND THE PROVISIONS OF SUB - SECTIONS (2), (3) AND (4) SHALL APPLY ACCORDINGLY. ] 6 . IT IS NOT IN DISPUTE THAT THE BOARD S INSTRUCTION OR DIRECTIONS ISSUED TO THE INCOME - TAX AUTHORITIES ARE BINDI NG ON THOSE AUTHORITIES , THEREFORE , THE DEPARTMENT OUGHT NOT TO HAVE FILED THE APPEAL IN VIEW OF THE ABOVE SAID PROVISIONS MENTIONED IN SECTION 268A OF THE ACT SINCE THE TAX EFFECT IN THE INSTANT CASE IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FILING THE A PPEAL. 7 . IT IS NOTICED THAT THE CBDT HAS ISSUED INSTRUCTION NO. 5 OF 2014 DATED 1 0.0 7.2014 , BY WHICH THE CBDT HAS REV ISED THE MONETARY LIMIT TO RS. 4 ,00,000/ - FOR FILING THE APPEAL BEFORE THE TRIBUNAL. 8 . KEEPING IN VIEW THE CBDT INSTRUCTION NO. 5 OF 20 1 4 DATED 10 .0 7 .201 4 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, WE ARE OF THE VIEW THAT THE REVENUE SHOULD NOT HAVE FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL. WHILE TAKING SUCH A VIEW, WE ARE FORTIFIED BY THE FOLLOWING DECISIONS O F HON'BLE PUNJAB & HARYANA HIGH COURT : - ITA NO.2110 /DE L/2011 B. K. MUKHERJEE 6 1. CIT V OSCAR LABORATORIES P. LTD (2010) 324 ITR 115 (P&H) 2. CIT V ABINASH GUPTA (2010) 327 ITR 619 (P&H) 3. CIT V VARINDERA CONSTRUCTION CO. (2011) 331 ITR 449 (P&H)(FB) 9 . SIMILARLY THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT V. DELHI RACE CLUB LTD. IN ITA NO.128/2008, ORDER DATED 03.03.2011 BY FOLLOWING THE EARLIER ORDER DATED 02.08.2010 IN ITA NO.179/1991 IN THE CASE OF CIT DELHI - III V. M/S. P.S. JAIN & CO. HELD THAT SUCH CIRCULAR WOULD ALSO BE APPLICABLE TO PENDI NG CASES. 10 . FROM THE RATIO LAID DOWN BY THE HON BLE DELHI HIGH COURT, IT IS CLEAR THAT THE INSTRUCTIONS ISSUED IN THE CIRCULARS BY CBDT ARE APPLICABLE FOR PENDING CASES ALSO. THEREFORE, BY KEEPING IN VIEW THE RATIO LAID DOWN IN THE AFORESAID REFERRED TO CASES, WE ARE OF THE CONSIDERED VIEW THAT INSTRUCTION NO. 5 /1 4 DATED 1 0.0 7 .201 4 ISSUED BY THE CBDT ARE APPLICABLE FOR THE PENDING CASES ALSO AND IN THE SAID INSTRUCTIONS, MONETARY TAX LIMIT FOR NOT FILING THE APPEAL BEFORE THE ITAT IS RS. 4 .00 LAKH S. 1 1 . IN VIEW OF THE ABOVE, WITHOUT GOING INTO MERITS OF THE CASE, WE DISMISS THE APPEAL FILED BY THE REVENUE. ITA NO.2110 /DE L/2011 B. K. MUKHERJEE 7 1 2 . IN THE RESULT, APPEAL OF THE REVENUE STAND DISMISSED . ( ORDER PRON OUNCED IN THE COURT ON 20 /04 / 2015) . SD/ - SD/ - (A. T. VARKEY ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 20 /04 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR