ACIT Range-2, V. Muzaffarnagar District Cooperative Development Federation Ltd,

ITA 2145/DEL/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2209 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-12-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 02-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY
• Assessee Lawyers: M P SHARMA
• Keywords: Gift; Question of law; Block assessment; Tax effect
• Section: 260A

Judgement Text

I.T.A. NO.2145/DEL./2008 (A.Y. : 2004-05) 1 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : C NEW DELHI) BEFORE SHRI RAJPAL YADAV, J UDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER I.T.A. NO.2145/DEL./2008 (ASSESSMENT YEAR : 2004-05) ADDL.CIT, RANGE 2, VS. MUZAFFARNAGAR DISTRICT COO P. DEV. NEW DELHI. FEDERATION LTD., ZILA PARISHAD MARKET, DISTT. MUZAFFARNAGAR. (PAN N.A.) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.P. SHARMA REVENUE BY : SMT. MONA MOHANTY, DR ORDER PER K.D. RANJAN, AM THIS APPEAL BY THE REVNEUE FOR ASSESSMENT YEAR 2004 -05 ARISES OUT OF ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), MUZAFFARN AGAR. THE ONLY ISSUE FOR CONSIDERATION RELATES TO DELETING THE ADDITION ON A CCOUNT OF PAYMENT OF BONUS OF RS.2,43,523/- ON THE GROUND THAT THE BONUS HAD BEEN PAID WITHIN REASONABLE LIMIT. 2. AT THE OUTSET, IT HAS BEEN CONTENDED BY THE LD.A R OF THE ASSESSEE THAT TAX EFFECT IN THE CASE IS LESS THAN RS.2 LAKH AND, THEREFORE, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. 3. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE HAS REVENUE HAS APPEALED AGAINST THE D ELETION OF ADDITION OF RS.2,43,523/- IN RESPECT OF WHICH TAX PAYABLE WILL BE MUCH LESS THAN RS.2 LAKH. DURING THE COURSE OF THE HEARING, LD.DR COULD NOT POINT OUT THAT THE CASE IS COVERED BY ANY EXCEPTION PROVIDED IN CIRCULARS ISSUED BY CBDT ON THE ISSUE. IT IS ALSO SEEN THAT RECENTLY THE HONBLE JURISDICTIONAL HIGH COURT VIDE THEIR ORDER DATED 1. 8.2007 IN ITA NO. 683/2007 IN THE CASE OF CIT V. MANISH BHAMBRI HAVE UPHELD THE ORDER OF T RIBUNAL WHEREIN THE APPEAL FILED BY THE REVENUE WAS REFUSED TO BE ENTERTAINED BECAUSE O F LOW TAX EFFECT. THE SAID ORDER OF HONBLE JURISDICTIONAL HIGH COURT IS REPRODUCED BE LOW FOR THE SAKE OF CONVENIENCE:- I.T.A. NO.2145/DEL./2008 (A.Y. : 2004-05) 2 THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8TH AUG UST, 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH 'D' IN IT(SS) NO. 513/DEL/2003 RELEVANT FOR THE BLOCK PERIOD 1ST APRI L, 1990 TO 14TH FEBRUARY, 2001. THE QUESTION THAT AROSE BEFORE THE ASSESSING OFFICE R WAS WITH REGARD TO CERTAIN DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSE E AND SINCE THE AMOUNTS WERE NOT EXPLAINED, TAX WAS LEVIED. IN APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE AND HELD THAT THE EXPLANA TION GIVEN BY HIM WAS ACCEPTABLE AND, IN ANY CASE, THE ASSESSEE CANNOT BE EXPECTED TO RECOLLECT EACH AND EVERY ENTRY MADE IN THE BANK. IT MAY BE MENTIONED THAT THE AMOUNT IN DISPUTE IS R S.30,000/- FOR THE ASSESSMENT YEAR 1999-2000 AND RS.83,000/- FOR THE A SSESSMENT YEAR 2001- 2002. IT MAY ALSO BE MENTIONED THAT FOR THE ASSESSM ENT YEAR 1999-2000, THE ASSESSING OFFICER HAS ALREADY ACCEPTED THE EXPLANAT ION WITH REGARD TO A GIFTOFRS.60,000/-. AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), AN APPEAL WAS FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL. THE TRIBUNAL FOUND THAT IN VIEW OF INSTRUCTIONS ISSUED BY THE CBDT WHERE TH E TAX EFFECT IS LESS THAN RS.L LAC, THE DEPARTMENT SHOULD NOT FILE AN APPEAL BEFORE THE TRIBUNAL. IN THE PRESENT CASE, THE TAX EFFECT IS LESS THAN RS.L LAC. UNDER THE CIRCUMSTANCES, THE TRIBUNAL DID NOT ENTERTAIN THE APPEAL. THE REVENUE, FEELING AGGRIEVED BY THE DECISION OF T HE TRIBUNAL, HAS COME UP BEFORE US UNDER SECTION 260A OF THE INCOME TAX ACT, 1961. IT IS CONTENDED BY LEARNED COUNSEL FOR THE REVENUE THAT THE TRIBUNA L IS A FACT FINDING AUTHORITY AND SHOULD HAVE ADJUDICATED THE MATTER ON MERITS. WE ARE OF THE VIEW THAT THE ISSUE RAISED BY THE REVENUE IS NOT AT ALL SUBSTANTIAL AND THE AMOUNT IN DISPUTE IS QUITE INSIGNIFICANT, CONSIDERI NG THAT THE CASE IS ONE OF A BLOCK ASSESSMENT. THERE IS NO JUSTIFICATION FOR THE INCOME TAX DEPARTMENT TO GO ON BURDENING THE TRIBUNAL, THE COURT WITH EVERY CASE RIGHT UP TO THE END. APART FROM BURDENING THE TRIBUNAL AND COURTS, IT AL SO CAUSES AVOIDABLE EXPENSES TO THE ASSESSEE. IT IS COMMON KNOWLEDGE TH AT THE ASSESSEE HAS TO PAY FOR LEGAL FEES AND MERELY BECAUSE THE INCOME TA X DEPARTMENT HAS GOT UNLIMITED RESOURCES, THERE IS NO JUSTIFICATION THAT EVERY CASE SHOULD BE DRAGGED ON. UNDER THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT TH E TRIBUNAL WAS JUSTIFIED IN REFUSING T O ENTERTAIN THE APPEAL BECAUSE OF THE INSIGNIFICANT AMOUNT INVOLVED IN THE MATTER. NO SUBSTANTIAL QUESTION OF LAW ARISES. WE, THEREFORE, DISMISS THIS APPEAL. 5. SINCE THE TAX EFFECT IS LESS THAN RS.2 LAKH, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE AND HENCE THE REVENUES APPEAL IS DISM ISSED AS NOT MAINTAINABLE. I.T.A. NO.2145/DEL./2008 (A.Y. : 2004-05) 3 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON 16.12.2009 IMMEDI ATELY AFTER CONCLUSION OF HEARING OF THE APPEAL. SD/- SD/- (RAJPAL YADAV) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, DEC. 16, 2009. SKB COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MUZAFFARNAGAR, 5.CIT(ITAT), NEW DELHI. AR/ITAT