A.C.I.T., Circle-12(2), Kolkata, Kolkata V. M/s Stable Trading Company Limited, Kolkata

ITA 2122/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1522 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 03-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL SURANA CA LD
• Keywords: Audit objection; Tax effect
• Section: 14A

Judgement Text

1 ITA NO. 2122/KOL/2016-T.E IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA BEFORE: SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 2122/KOL/2016 A.Y 2010-11 ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-12(2) KOLKATA. APPELLANT VS M/S. STABLE TRADING COMPANY LTD PAN: AADCS 8594D RESPONDENT FOR THE APPELLANT : SHRI ARINDAM BHATTACHARJEE, A DDL.CIT, LD.SR.DR FOR THE RESPONDENT : SHRI SUNIL SURANA, CA, LD.AR DATE OF HEARING : 15-02-2018 DATE OF PRONOUNCEMENT : 15-02-2018 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER DATE D 30-08- 2016 OF CIT(A), 15, KOLKATA FOR THE ASSESSMENT YEA R 2010-11. 2. AT THE OUTSET, THE LD.AR OF THE ASSESSEE HAS FIL ED A STATEMENT REGARDING DETAILS OF COMPUTATION OF INCOME AND SU BMITTED TAX EFFECT IS BELOW THE MONETARY LIMIT AS PRESCRIBED AND THE R ELEVANT DETAILS ARE HEREUNDER:- INCOME COMPUTATION OF AO AFTER GIVING RELIEF OF INC OME FROM HOUSE PROPERTY WHICH HAS NOT BEEN DISPUTED BY THE DEPARTMENT BEFORE ITAT HOUSE PROPERTY RS.4,53,600/- LOSS FROM BUSINESS RS.(-) 20,58,153 ADD: 14A DISALLOWANCE RS.36,41`,968/- RS.15,83,815/ - SHORT TERM CAPITAL GAIN 9,37,49,029/- TOTAL INCOME RS.9,57,86,444/- TAX ON ABOVE ON RS. 20,37,415/- @33.99% RS.6,92,517 /- ON RS.9,37,49,029/- RS.1,59,32,647/- TOTAL TAX RS.1,66,25,164/- INCOME AS COMPUTED AFTER CIT(A) EFFECT OF SECTI ON 14A. HOUSE PROPERTY RS.4,53,600/- LOSS FROM BUSINESS (-)RS.20,58,153/- SHORT TERM CAPITAL GAIN RS.9,37,49,029/- TOTAL INCOME 9,21,44,476/- 2 ITA NO. 2122/KOL/2016-T.E TAX ON ABOVE ON RS.9,21,44,476/- @16.995% RS.1,56,5 9,953/- DIFFERENCE IN TAX = RS. 9,65,211 3. THE LD.DR DID NOT CONTROVERT THE SAME. 4. IT IS SEEN FROM THE ABOVE THAT THE TOTAL TAX EFF ECT CHALLENGED BY THE REVENUE BEFORE US IS ADMITTEDLY BELOW THE TAX E FFECT LIMIT PRESCRIBED BY CBDT VIDE CIRCULAR NO. 21 / 2015 DATE D 10.12.2015 FOR PREFERRING APPEAL(S) BEFORE TRIBUNAL BY THE REVENU E. IT WILL BE PERTINENT TO REPRODUCE THE RELEVANT PORTION OF THE SAID CIRCULAR NO. 21 / 2015 DATED 10.12.2015 :- 3. HENCEFORTH, APPEALS / SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER:- S.NO. APPEALS IN INCOME TAX MATTERS MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILI NG OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CH ARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS D ISPUTED ISSUES). HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHAR GEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE R ETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX O N DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM O F PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ON E ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS I N WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIE D IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS , HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT AS SESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTH ORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), I F IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MO NETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDGEMENT INVOLVES MORE THAN ON E ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 8. ADVERSE JUDGEMENTS RELATING TO THE FOLLOWING ISS UES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LES S THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR C IRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN A SSETS / BANK ACCOUNTS. 3 ITA NO. 2122/KOL/2016-T.E 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPE ALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN / NOT PRESSED. APPEA LS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OP ERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 5. IN VIEW OF THE ABOVE CIRCULAR, WE FIND THAT THE ISSUE CHALLENGED BY THE REVENUE IN THIS APPEAL IS BELOW THE TAX EFFE CT, WHICH IS PRESCRIBED BY THE BOARD UNDER CIRCULAR DT. 10-12-20 15. THEREFORE, THE APPEAL IS DISMISSED BEING LOW TAX EFFECT. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-02-2018 SD/- SD/- P.M. JAGTAP S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15-02-2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT THE ACIT, CIR- 12(2),KOLKATA AAYKAR BHAWAN, 6 TH FLOOR, P-7 CHOWRINGHEE SQUARE, KOLKATA-69. 2 RESPONDENT M/S. STABLE TRADING COMPANY LIMITED 8A, SUKH SAGAR, 2/5, SARAT BOSE ROAD, KOLKATA-20. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR.PS/H.O.O ITAT, KOLKATA