The ITO, Ward-4(4), Surat V. Valentine Cine Vision Ltd., Surat

ITA 231/AHD/2011

• Counselvise Citation: 23120514 RSA 2011
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 28-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Question of law; Block assessment; Tax effect; Set aside
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 231/ AHD/2011 (ASSESSMENT YEAR 2006-07) ITO, WARD 4(4), SURAT VS. VALENTINE CINE VISION LTD., VALENTINE CINEMA, DUMAS ROAD, SURAT PAN/GIR NO. : AAACV3889A (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI K MADHUSUDAN, SR. DR RESPONDENT BY: NONE DATE OF HEARING: 04.11.2011 DATE OF PRONOUNCEMENT: 04.11.2011 O R D E R PER SHRI A. K. GARODIA, AM:- THIS APPEAL BY THE REVENUE HAS BEEN PREFERRED AGAI NST THE ORDER OF LD. CIT(A) IV, SURAT DATED 29.10.2010 FOR THE ASSES SMENT YEAR 2006-07. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE AS END IN LAW, THE LD. CIT(A) IV, SURAT HAS ERRED IN DELETING THE ADDITION OF RS.1,33,966/- MADE U/S 69 OF THE ACT ON ACCOUNT OF DIFFERENCE IN COST OF CONSTRUCTION AS DETERMINED BY THE VALUATION OFFICER. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) IV, SURAT HAS ERRED IN DELETING THE ADDITION OF RS.5,18,000/- MADE ON ACCOUNT OF FALL IN G.P. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) IV, SURAT OUGHT TO HAVE UPHELD THE O RDER OF THE A.O. I.T.A.NO. 231 /AHD/20011 2 4) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L D. CIT(A) MAY BE SET ASIDE AND THAT OF THE A.O. RESTORED. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF THE NOTICE DULY SERVED UPON THE ASSESSEE AS IS CLEAR FROM THE LETTE R DATED 24.10.2011 OF THE ASSESSEE ITSELF PLACED ON RECORD, REQUESTING FO R ADJOURNMENT INDICATING THAT THE ASSESSEES CONSULTANT WILL BE OUT OF TOWN ON THE APPOINTED DATE OF HEARING I.E. ON 04.11.2011, WHICH REQUEST HAS BEEN REJECTED. THE BENCH PROCEEDED TO DECIDE THE APPEAL EX PARTE QUA THE ASS ESSEE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. D.R. 3. THE LD. D.R. SUPPORTED THE ASSESSMENT ORDER. 4 WE HAVE CONSIDERED THE MATERIAL ON RECORD AND SUB MISSION OF THE LD. D.R. THE TOTAL TAX EFFECT ON ABOVE ADDITION CO MES BELOW RS.2 LACS. AS PER C.B.D.T. INSTRUCTION NO. 5 DATED 16.7.2007, CLARIFYING THE MEANING OF TAX EFFECT AS GIVEN IN BOARDS INSTRUC TION NO.2/2005, DATED 24.10.2005, IT IS PROVIDED THAT TAX EFFECT MEANS TAX EXCLUDING INTEREST. THUS, ONLY THE EFFECT OF INCOME-TAX IS TO BE SEEN A ND NOT THE INTEREST THEREON. WHILE CONSIDERING THE EFFECT OF INSTRUCTIO N NO.2 DATED 24.10.2005, VARIOUS BENCHES OF ITAT ARE CONSISTENTL Y TAKING THE VIEW THAT REVENUE AUTHORITIES MUST GIVE RESPECT TO THE C .B.D.T. CIRCULARS AND SHOULD NOT FILE APPEAL IN SMALL AND PETTY CASES. TH E WHOLE IDEA OF THE CIRCULAR IS NOT TO WASTE ENERGY OF THE DEPARTMENT O N SMALL MATTERS AND SAVE IT TO CONSTRUCTIVE AND HIGH YIELDING CASES. HO NBLE DELHI HIGH COURT IN CASE OF CIT VS. MANISH BHAMBRI VIDE ORDER DATED 1.8.2007 IN I.T.A. NO.683/DEL/07, HAVE UPHELD THE ORDER OF THE ITAT VI DE WHICH THE APPEAL FILED BY THE REVENUE WAS REFUSED TO BE ENTERTAINED BECAUSE OF THE LOW INCOME-TAX. THE SAID ORDER OF HONBLE DELHI HIGH C OURT IS REPRODUCED BELOW FOR THE SAKE OF CONVENIENCE:- I.T.A.NO. 231 /AHD/20011 3 THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8TH AUGU ST, 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH 'D' IN IT(SS) NO. 513/DEL/2003 RELEVANT FOR THE BLOCK PERI OD 1ST APRIL, 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 T HE ASSESSEE AND SINCE THE AMOUNTS WERE NOT EXPLAINED, TAX WAS LEVIE D. IN APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE AND HELD THAT THE EX PLANATION GIVEN BY HIM WAS ACCEPTABLE AND, IN ANY CASE, THE ASSESSE E 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 T HE ASSESSMENT YEAR 2001-2002. IT MAY ALSO BE MENTIONED THAT FOR T HE ASSESSMENT YEAR 1999-2000, THE ASSESSING OFFICER HAS ALREADY A CCEPTED THE EXPLANATION WITH REGARD TO A GIFT OF RS.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 THE TAX EFFECT IS LESS THAN RS.L LAC, THE DEP ARTMENT 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. I.T.A.NO. 231 /AHD/20011 4 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 TRIBUNAL IS A FACT FINDING AUTHORITY AND SHOULD HAVE ADJUDIC ATED 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, CONSIDERING THAT THE CASE IS ONE OF A BLOCK ASSESSMENT. THERE IS NO JUSTIFICATION FOR THE INCOME TAX DEPART MENT TO GO ON BURDENING THE TRIBUNAL, THE COURT WITH EVERY CASE R IGHT UP TO THE END. APART FROM BURDENING THE TRIBUNAL AND COURTS, IT ALSO CAUSES AVOIDABLE EXPENSES TO THE ASSESSEE. IT IS COMMON KN OWLEDGE THAT THE ASSESSEE HAS TO PAY FOR LEGAL FEES AND MERELY B ECAUSE THE INCOME TAX 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 TO ENTERTAIN THE APPEAL BECAU SE OF THE INSIGNIFICANT AMOUNT INVOLVED IN THE MATTER. NO SUB STANTIAL QUESTION OF LAW ARISES. WE, THEREFORE, DISMISS THIS APPEAL. 5. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE DUE TO LOW TAX EFFECT. 6. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH NOV., 2011. SD./- SD./- (BHAVNESH SAINI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED : 04 TH NOV., 2011 SP I.T.A.NO. 231 /AHD/20011 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 4/11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER4/11.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.4/11 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 4/11 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 11/11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 11/11/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..