ITO-WARD-1(3), Nagpur V. SMT. BARKHA VIKAS PINCHA, Nagpur

ITA 220/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1700 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 15-04-2014
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: A C BAWANE
• Keywords: Business income; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 220/NAG./2014 ( ASSESSMENT YEAR : 200607 ) INCOME TAX OFFICER WARD1(3), MECL BUILDING AMBEDKAR BHAWAN SEMINARY HILLS, NAGPUR 440 006 APPELLANT V/S SMT. BARKHA VIKAS PINCHA D1/D2, RAJKAMAL COMPLEX WARDHA ROAD, NAGPUR 400 015 PAN ACGP3300C RESPONDENT ITA NO. 221/NAG./2014 ( ASSESSMENT YEAR : 200708 ) INCOME TAX OFFICER WARD1(3), MECL BUILDING AMBEDKAR BHAWAN SEMINARY HILLS, NAGPUR 440 006 APPELLANT V/S SMT. BARKHA VIKAS PINCHA D1/D2, RAJKAMAL COMPLEX WARDHA ROAD, NAGPUR 400 015 PAN ACGP3300C RESPONDENT SMT. BARKHA VIKAS PINCHA 2 ITA NO. 222/NAG./2014 ( ASSESSMENT YEAR : 200910 ) INCOME TAX OFFICER WARD1(3), MECL BUILDING AMBEDKAR BHAWAN SEMINARY HILLS, NAGPUR 440 006 APPELLANT V/S SMT. BARKHA VIKAS PINCHA D1/D2, RAJKAMAL COMPLEX WARDHA ROAD, NAGPUR 400 015 PAN ACGP3300C RESPONDENT ASSESSEE BY : SHRI A.C. BAWANE REVENUE BY : SHRI NARENDRA KANE DATE OF HEARING 20.08.2015 DATE OF ORDER 28.08 .2015 O R D E R PER BENCH THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE IMPUGNED ORDER DATED 5 TH DECEMBER 2013, PASSED BY THE LEARNED COMMISSIONER (APPEALS)I, NAGPUR, FOR THE ASSESSMENT YEARS 20060 7, 200708 AND 200910 RESPECTIVELY. SINCE ALL THESE APPEALS PERTAIN TO THE SAME ASSESSEE INVOLVING COMMON ISSUES ARISING OUT OF IDE NTICAL SET OF FACTS AND CIRCUMSTANCES, THEREFORE, AS A MATTER OF CONVENIENC E, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE, EX CEPT VARIATION IN FIGURES, WHICH ARE IDENTICALLY WORDED IN ALL THE YE ARS UNDER CONSIDERATION, READ AS FOLLOWS: SMT. BARKHA VIKAS PINCHA 3 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD, CIT (A) ERRED IN HOLDING THAT THE PROFIT DER IVED ON THE SALE AND PURCHASE OF THE SHARE WAS CHARGEABLE T O TAX AS SHORT TERM OR LONG TERM CAPITAL GAIN U/ S. 45 OF THE I.T. ACT, 1961 AND NOT AS BUSINESS INCOME. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD, CIT(A) ERRED IN NOT APPRECIATING THE FACT TH AT THE ASSESSEE ALONG WITH HER SPOUSE WERE REGULARLY AND SYSTEMATICALLY CARRYING ON THE ACTIVITIES OF PURCHA SE AND SALE OF SHARES IN AN ORGANIZED MANNER. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD, CIT(A) ERRED IN IGNORING THE PERTINENT FACT THAT THE ASSESSEE WAS DOING TRANSACTION OF PURCHASE AND SALE OF SHARE JOINTLY WITH HER SPOUSE WITH COMMON INVESTMEN T OF FUNDS AND WIT .. H. FIXED PROFIT SHARING RATIO OF 5 0% WHICH INDICATED THAT THE TRANSACTIONS WERE OF THE NATURE OF AN ADVENTURE OR CONCERN IN THE NATURE OF TRADE AND AS SUCH THE PROFIT DERIVED FROM SUCH TRANSACTIONS WAS CHARGEABL E TO TAX AS BUSINESS INCOME AND NOT AS CAPITAL GAINS. 2. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE R AISED PRELIMINARY OBJECTION. HE SUBMITTED AS UNDER:- 1) THE A.O. HAS MADE THE FOLLOWING ADDITIONS ON ACC OUNT OF PROFIT ARISING ON SALE OF SHARES AS BUSINESS INCOME AS AGA INST SHORT TERM/LONG TERMS CAPITAL GAINS CLAIMED BY ASSESSEE: SR.NO ITA NO. ASSTT. YEAR QUANTUM OF TAX EFFECT @ 30% ADDITION 1. 220/NAG/2014 2006-07 RS. 6,67,823/- RS. 2,00 ,347/- 2. 221/NAG/2014 2007-08 RS. 7,13,042/- RS. 2,13 ,913/- 3. 222/NAG/2014 2009-10 RS. 10A6,726/ RS.3,14,018/- THOUGH THE HON'BLE CIT(APPEALS) HAS PASSED A COMBIN ED ORDER FOR THE ASSESSMENT YEARS 2006-07, 2007-08 AND 2009- 10, THE TAX EFFECT INVOLVED IN EACH ASSESSMENT YEAR IS LESS THAN RS. 4 LAKHS. IN VIEW OF ABOVE THE APPEALS FILED BY REVENU E FOR THE AFORESAID ASSESSMENT YEARS ARE IN CONTRAVENTION OF CBOT CIRCULAR NO. 5/2014 DATED 10/07/2014 PRESCRIBING REVISED MON ETARY LIMIT OF RS. 4 LAKH FOR FILING APPEAL BY REVENUE BEFORE H ON'BLE ITAT. THE APPEALS OF REVENUE ARE LIABLE TO BE DISMISSED I N LIMINE. SMT. BARKHA VIKAS PINCHA 4 3. PER-CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBM ITTED THAT SINCE A COMMON ORDER HAS BEEN PASSED AND THE COMB INED EFFECT IS MORE THAN RS. 4 LAKH, THE APPEAL SHOULD BE DECIDED ON MERITS. 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. WE MA Y GAINFULLY REPRODUCE THE RELEVANT CBDT CIRCULAR F.NO.279/MISC. 142/2007ITJ(PT.) DATED 10 TH JULY 2014, IN THIS REGARD. REFERENCE IS INVITED TO BOARD'S INSTRUCTION NO 3/2 011 DATED 09/02/2011 WHEREIN MONETARY LIMITS AND OTHER CONDI TIONS FOR FILING DEPARTMENTAL APPEALS (IN INCOME-TAX MATTERS) BEFOR E APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT WERE SPECIF IED. 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HAS BEEN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT K EEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH APPEALS SHALL NOT BE FILED IN CASES W HERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HE REUNDER: - S.NO. APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 4,00,000/- 2. U/S 260 A BEFORE HIGH COURT 10,00,000/- 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 PR ESCRIBED ABOVE. FILING 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 CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST W HICH APPEALS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'D ISPUTED ISSUES'). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THERE ON, EXCEPT WHERE SMT. BARKHA VIKAS PINCHA 5 CHARGEABILITY 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 RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NO TIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE O RDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED IS SUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPE AL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS I N WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS T HE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RE SPECT 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 ASSESSMENT YEAR. HOWEVER, IN CASE OF A COM POSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INV OLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT O F ALL SUCH ASSESSMENT YEARS EVEN IF THE 'TAX EFFECT IS LESS TH AN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DEC IDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH 'TAX EFFECT' EXC EEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHAL L BE DEALT WITH SEPARATELY. WE FIND THAT PARA-5 OF THE ABOVE CBDT CIRCULAR IS REL EVANT HERE. FROM THE ABOVE, IT IS EVIDENT THAT THE CBDT HAS SPEC IFICALLY HELD THAT IN CASE OF A COMPOSITE ORDER, WHICH INVOLVES 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 MONETORY LIMIT IN ANY OF THE YEARS, IF IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR IN WHICH TAX EFFECT EXCEEDS THE MONETORY LIMIT PRESCRIBED. THUS, I T IS EVIDENT THAT UNLESS TAX LIMIT EXCEEDS IN ANY OF THE YEAR IN A COM POSITE ORDER, THE APPEAL CANNOT BE FILED. IN THE PRESENT CASE, AS EVIDEN T FROM THE ABOVE, NONE OF THE YEAR THE TAX EFFECT CROSSES THE LIMIT FIXED F OR FILING APPEALS SMT. BARKHA VIKAS PINCHA 6 BEFORE THE TRIBUNAL. ACCORDINGLY, WE ACCEPT THE PRE LIMINARY OBJECTION OF THE LEARNED COUNSEL FOR THE ASSESSEE AND HOLD THAT THIS APPEAL BY THE REVENUE IS NOT MAINTAINABLE AS TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED BY THE CBDT FOR FILING APPEALS BEFORE TH E TRIBUNAL. IT IS SETTLED LAW THAT THE CBDT CIRCULARS ARE BINDING ON THE REVENUE. ACCORDINGLY, THESE APPEALS ARE DISMISSED ON ACCOUNT OF LOW TAX EFFECT AS NON-MAINTAINABLE. 5. IN THE RESULT, REVENUES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.08.2015 SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER NAGPUR, DATED: 28.08.2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY A SSISTANT REGISTRAR ITAT, NAGPUR