The ACIT, Circle-4, Surat V. M/s. R. Wadiwala Securities Pvt.Ltd., Surat

ITA 2174/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0242 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 01-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Assessee Lawyers: M J SHAH
• Keywords: Business expenditure; Tax effect

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , .!.'#$%, !& ! ' BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ./ I.T.A. NO.2174/AHD/2012 ( ( ) *) / ASSESSMENT YEAR : 2008-09 ) ACIT CIRCLE-4 SURAT ( / VS. M/S.R.WADIWALA SECURITIES PVT.LTD. 9/2003-04, LIMDA CHOWK SURAT-395 001 ./ ./ PAN/GIR NO. : AACCR 7642 A ( / APPELLANT ) .. ( / RESPONDENT ) AND CO NO.219/AHD/2012 A.Y. 2008-09 (IN ITA NO.2174/AHD/2012) M/S.R.WADIWALA SECURITIES ACIT,CIRCLE-4 PVT.LTD. SURAT VS. SURAT (CROSS OBJECTOR) .. (RESPONDEN T) REVENUE BY : SHRI D.K.SINGH, SR.D.R. ASSESSEE BY : SHRI M.J. SHAH / DATE OF HEARING : 20/02/2013 !' / DATE OF PRONOUNCEMENT : 20/2/13 #$ / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FRO M THE ORDER OF THE LEARNED CIT(APPEALS)-IVI, SURAT DATED 25.06.201 2 PASSED FOR ASSESSMENT YEAR 2008-09. THE RESPONDENT ASSESSEE I S IN CROSS OBJECTION. ITA NO.2174/AHD/2012 (BY REVENUE) AND CO NO.219/AHD/2012 (BY ASSESSEE) ACIT VS. M/S.R.WADIWALA SECURITIES PVT.LTD. ASST.YEAR - 2008-09 - 2 - 2. REVENUES APPEAL, ITA NO.2174/AHD/2012 FOR A.Y. 2 008-09 IN THIS APPEAL, THE REVENUE HAS RAISED FOLLOWING GR OUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW,THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITIO N OF RS.3,85,000/- MADE ON ACCOUNT OR INADMISSIBLE BROKE RAGE REFUND. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITI ON MADE ON ACCOUNT OF DEBITING THE BROKERAGE REFUND. 2.1. ASSESSEES CROSS OBJECTION NO.219/AHD/2012 FOR A.Y. 2008-09. IN THIS CROSS-OBJECTION, THE ASSESSEE HAS RAISED FO LLOWING GROUND:- 1. THE LD.ASST.COMMISSIONER OF INCOME TAX GROSSLY ERRE D IN FILING APPEAL WITHOUT CONSIDERING BOARDS INSTRUCTION NO.3 /2011 (F.NO.279/MISC.142/2007-ITJ) DATED 09/02/2011 WHERE IN MONETARY LIMITS FOR FILING DEPARTMENTS APPEALS (IN INCOME TAX MATTERS) BEFORE APPELLATE TRIBUNAL FIXED. 2. THE LD. ASST.COMMISSIONER OF INCOME TAX HAS NOT FOL LOWED THE ABOVE MENTIONED INSTRUCTION WHERE THE TAX EFFECT DO ES NOT EXCEED THE MONETARY LIMITS OF RS.3 LACS TO FILE APP EAL BEFORE APPELLATE TRIBUNAL. 3. THE LD.ASST.COMMISSIONER OF INCOME TAX FILED APPEAL ON ACCOUNT OF BROKERAGE REFUND OF RS.3,85,500/- AND NO T CONSIDER AS BUSINESS EXPENDITURE THOUGH THE LD.CIT(APPEALS) GO THROUGH ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALL OWED APPEAL OF THE ASSESSEE. 4. THE ASST.COMMISSIONER OF INCOME TAX DID VERIFY ALL THE FACTS DURING THE COURSE OF HEARING AS WELL LD.CIT(APPEALS ) HAS ALSO CONFIRMED ALL THE FACTS AND OBSERVED FROM THE FINDI NG OF THE CASE THAT THE APPELLANT HAS BEEN ABLE TO SHOW THAT HIS POLICY OF NOT CHARGING LOWER BROKERAGE UPFRONT ACROSS THE BOARD BUT ITA NO.2174/AHD/2012 (BY REVENUE) AND CO NO.219/AHD/2012 (BY ASSESSEE) ACIT VS. M/S.R.WADIWALA SECURITIES PVT.LTD. ASST.YEAR - 2008-09 - 3 - TO ALLOW DISCOUNTS BY WAY OF REFUND ONCE THE CLIENT GIVES HUGE VOLUMES IS SOUND BUSINESS PRACTICE. THE EXPENDITUR E HAS TO BE THEREFORE HELD AS INCURRED FOR THE PURPOSE OF BUSIN ESS AND THEN PASSED THE ORDER. BUT THE LD.ACIT DID NOT BEL IEVE THE BROKERAGE REFUND AS BUSINESS EXPENDITURE AND FILED APPEAL AGAINST THE ORDER PASSED BY THE LD.CIT(APPEALS). 5. IT IS THEREFORE ALL THESE AND OTHER GROUNDS WHICH M AY BE PRODUCED THE APPEAL MAY PLEASE UPHELD THE ORDER OF THE LD.CIT(APPEALS) AND ALLOW THE APPEAL IN FAVOUR OF T HE ASSESSEE. 3. FROM THE SIDE OF THE RESPONDENT-ASSESSEE, LD.AR MR.M.J.SHAH APPEARED. FROM THE SIDE OF THE REVENUE, LD.SR.DR M R.D.K.SINGH APPEARED. AT THE OUTSET, WE HAVE NOTICED THAT THE ONLY ADDITION IN DISPUTE AMOUNTED TO RS.3,85,000/- ONLY. NATURALLY, THE TAX EFFECT THEREON IS LESS THAN THE PRESCRIBED LIMIT OF TAX FOR THE PURPOSE OF FILING OF APPEAL BY THE REVENUE DEPARTMENT. 4. AFTER HAVING HEARD BOTH THE SIDES, CONSIDERING T HE MATERIAL AVAILABLE ON RECORD AND THE CBDT CIRCULARS ON THIS ISSUE, WE FIND THAT THE TAX EFFECT IN THIS CASE IS LESS THAN RS.3 LACS. SO, AFTER CONSIDERING THE SUBMISSIONS OF LD.DR AND GOING THROUGH THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE DEPARTMENT OUGHT NOT HAVE FILE D THE APPEAL. OUR VIEW IS SUPPORTED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MANGLAM RICINUS LTD. (2008) 174 TAX MAN 186 (DEL) AND INSTRUCTION NO.3/2011 [F.NO.279/MISC.142/2007-ITJ] DATED 9-2-2011 . AS THE APPEAL SO FILED IS AGAINST THE EXECUTIVE INS TRUCTIONS WHICH ARE BINDING ON THE DEPARTMENT, WE DISMISS THE APPEAL IN LIMINE . 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ITA NO.2174/AHD/2012 (BY REVENUE) AND CO NO.219/AHD/2012 (BY ASSESSEE) ACIT VS. M/S.R.WADIWALA SECURITIES PVT.LTD. ASST.YEAR - 2008-09 - 4 - ASSESSEES CROSS OBJECTION NO.219/AHD/2012 6. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES AND IN THE LIGHT OF THE STATEMENT MADE BY LD.AR IN THE COURT ASKING PER MISSION FOR THE WITHDRAWAL OF THE CROSS OBJECTION UNDER CONSIDERATI ON, WE HEREBY GRANT THE PERMISSION AND DISMISS THIS CROSS-OBJECTION BEI NG WITHDRAWN. 7. IN THE RESULT, REVENUES APPEAL AS WELL AS CROSS-OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. SD/- SD/- ( %..& '( ) ( ) ) * ) # +, # ( A. K. GARODIA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20/ 2 /2013 -.., .,../ T.C. NAIR, SR. PS !, - ./0 1!0* / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / 01 2 / CONCERNED CIT 4. 2 () / THE CIT(A)-IV, SURAT 5. 56& ,,01, 01', 7)#/# / DR, ITAT, AHMEDABAD 6. &(8 9 / GUARD FILE. !,( / BY ORDER, 5 , //TRUE COPY// 2/ 3 ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD