The ACIT, Circld-4, Ahmedabad V. Ideal Sheet Metal Stamping & Pressing Pvt.Ltd., Ahmedabad

ITA 2224/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9157 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 05-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Earning of tax free income; Tax effect
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, A HMEDABAD , (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M.) ( , !' # , ! $% ) ITA NO. 2224/AHD/2012 & C.O. NO. 220/AHD/2012 (ASSESSM ENT YEAR: 2008-09) THE ASST. COMMISSIONER OF INCOME TAX, CIRCL-4, AHMEDABAD IDEAL SHEET METAL STAMPING & PRESSING PVT. LTD., KALIDAS MILL COMPOUND, GOMTIPUR, AHMEDABAD VS. VS. IDEAL SHEET METAL STAMPING & PRESSING PVT. LTD., KALIDAS MILL COMPOUND, GOMTIPUR, AHMEDABAD THE ASST. COMMISSIONER OF INCOME TAX, CIRCL-4, AHMEDABAD PAN NO. AAACI3670D (APPELLANT) (RESPONDENT) / BY REVENUE : SMT. SONIA KUMAR, SR. D. R. / BY ASSESSEE : SHRI SANJAY R. SHAH, C. A. DATE OF HEARING : 21 -03- 2016 DATE OF PRONOUNCEMENT : 22 -03-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THESE TWO APPEALS OF WHICH ONE IS FILED BY REVENUE AND THE OTHER I.E. CROSS OBJECTION BY ASSESSEE ARE AGAINST THE ORDER OF CIT( A)-VIII, AHMEDABAD, DATED 20.07.2012 FOR THE ASSESSMENT YEAR 2008-09. ITA NO.2224/AHD/12 & C.O. NO.220/A/12 A.Y. 2008-09 (ACIT VS. IDEAL SHEET METAL STAMPING & PRESSING PVT. LTD.) 2 2. THE GROUND RAISED BY THE REVENUE IN THE PRESENT APPEAL READS AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS.16,62,736/- U/S.14A WITHOUT APPRECIATING THE FACTS THAT THE ASS ESSEE FAILED TO PRODUCE THE DAY- TO-TO-DAY MOVEMENT OF FUNDS TO ENABLE THE AO TO ASC ERTAIN THE SEGREGATION OF NATURE OF FUND. 2.1 ON THE OTHER HAND, THE GROUNDS RAISED BY THE AS SESSEE IN C.O. READS AS UNDER: 1. THE AO AS WELL AS THE CIT(A) ERRED IN NOT APPRE CIATING THE FACT THAT NO NEW EXEMPTED INVESTMENT HAS BEEN MADE DURING THE YEAR, THEREFORE AMOUNT OF RS. 25,000 DISALLOWED BY ASSESSEE IS REASONABLE WHICH I S ALSO CONFIRMED BY THE APPELLATE AUTHORITY IN AN EARLIER YEAR. IT BE SO HE LD NOW. 2. THE LEARNED AO AS WELL AS THE LD. CIT(A) ERRED IN INVOKING RULE 8D WITHOUT PROVING THE EXPENDITURE OF RS.25,000 DISALLOWED BY THE ASSE SSEE AS UNREASONABLE OR WITHOUT ESTABLISHING DIRECT NEXUS OF ANY EXPENDITURE INCURR ED WITH EXEMPT INCOME. IT BE SO HELD NOW. 3. THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE U/S 14A TO THE EXTENT OF RS. 3,77,832 TOWARD OTHER EXPENSES BY INVOKING RULE 8D OF THE I.T. RULES. THE LEARNED AO HAS WRONGLY MENTIONED THE FIGURE OF RS.16,62,736 IN HIS APPEAL WHEN THE CORRECT FIGURE UNDER DISPUTE FOR DEPARTMENT WOULD B E RS.12,84,904 (I.E. RS. 16,62,736 - RS. 3,77,832). IT BE SO HELD NOW. 3. BEFORE US, AT THE OUTSET, LD. A.R. SUBMITTED THA T THE PRESENT APPEAL OF THE REVENUE NEEDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF THE CBDT CIRCULAR NO. 21 OF 2015 DATED 10.12.2015 AND WHEN T HE APPEAL OF REVENUE IS DISMISSED, ITS C.O. MAY BE TREATED AS WITHDRAWN. T HE LD. D.R. FAIRLY ADMITTED THAT THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED BY THE AFORESAID CBDT CIRCULAR. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENU E, WE FIND THAT REVENUE IS AGGRIEVED BY THE DELETION OF ADDITION OF RS.16,62, 736/-. AS PER THE ANNOUNCEMENT OF CENTRAL BOARD OF DIRECT TAXES (CBDT) DATED 10.12.2015 ( CIRCULAR NO. 21 OF 2015), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINS T RELIEF GIVEN BY LD. CIT(A) BEFORE THE INCOME TAX TRIBUNAL UNLESS THE TAX EFFEC T, EXCLUDING INTEREST EXCEEDS RS. 10 LACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDING APPEALS. IN THE PRESENT CASE, SINCE IT IS A N UNDISPUTED FACT THAT ON THE ITA NO.2224/AHD/12 & C.O. NO.220/A/12 A.Y. 2008-09 (ACIT VS. IDEAL SHEET METAL STAMPING & PRESSING PVT. LTD.) 3 DEMAND WHICH IS IN DISPUTE, THE TAX EFFECT IS LESS THAN RS.10 LACS AND IN THE ABSENCE OF ANY MATERIAL ON RECORD BY THE REVENUE TO DEMONST RATE THAT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY EXEMPTIONS SPECIFIED IN CLAUSE (8) OF THE CBDT CIRCULAR, WE ARE OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBE D BY THE INSTRUCTIONS OF THE AFORESAID CBDT CIRCULAR WOULD BE APPLICABLE T O THE PRESENT APPEAL OF THE DEPARTMENT AND THEREFORE THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. IN SUCH CIRCUMSTANCES, WE DISMISS T HE APPEAL OF REVENUE WITHOUT EXPRESSING ANY OPINION ON MERITS OF THE CASE. 5. SINCE, THE REVENUES APPEAL IS DISMISSED AND IN VIEW OF LD. A.R.S SUBMISSIONS, WE DISMISS THE C.O. OF ASSESSEE AS BEI NG WITHDRAWN AND HENCE, THE C.O. RAISED BY ASSESSEE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF REVENUE AND ASSESSE ES C.O. ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 22 - 03 - 2016. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 22 /03/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, AHMEDABAD