The ITO, Ward-4(1), Baroda V. Soham Securities Ltd., Vadodara

ITA 2433/AHD/2015

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5515 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 14-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Keywords: Business income; Depreciation; Opportunity of being heard; Earning of tax free income; Wrong claim; Bad and doubtful debts; Tax effect; Set aside
• Section: 143(3); 14A; 143(1); 32; 147

Judgement Text

, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 2208/AHD/2015 / ASSESSMENT YEAR : 2011-12 SOHAM SECURITIES LTD., VASU NIWAS, BEHIND B. N. CHAMBERS, ALKAPURI CLUB ROAD, ALKAPURI, VADODARA-390 007. (PAN NO: AAHCS 9744 F) VS. ITO, WARD-4(1), BARODA. ./ ITA NO. 2433/AHD/2015 / ASSESSMENT YEAR : 2011-12 ACIT, CIR 2(1)(1), BARODA. VS. SOHAM SECURITIES LTD., ASSESSEE BY : SHRI SAKAR SHARMA, A.R. REVENUE BY : SHRI S. K. DEV, SR. D.R. / DATE OF HEARING : 05.09.2018 / DATE OF PRONOUNCEMENT : 02.11.2018 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THESE ARE CROSS APPEALS AGAINST EACH OTHER HAVE BEEN FIL ED AT THE INSTANCE OF THE ASSESSEE AND REVENUE AGAINST THE APPELLATE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-2, VADODARA [CIT(A) IN SHORT] DATED 22.05.2015 RELEVANT TO ASSESSMENT YEAR 2011-12. 2. FIRST WE TAKE UP ASSESSEES APPEAL IN ITA NO.2208/AHD/2015 FOR ASST. YEAR 2011-12. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- / (APPELLANT) / (RESPONDENT) 2 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 1. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN CONFIRMING ACTION OF ASSESSING OFFICER IN HOLDING THAT THE APPELLANT HAS N OT CARRIED OUT ANY BUSINESS OPERATIONS DURING THE YEAR. 2. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN NOT GRANT ING SET OFF OF BUSINESS LOSS AGAINST INCOMES ASSESSED UNDER THE HEAD 'I NCOME FROM OTHER SOURCES. 3. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN NOT GRANT ING DEDUCTION OF BAD DEBTS WRITTEN OFF OF RS. 3,87,793/-; PROFESSIONAL FEES OF RS. 8,94,140/- AND DEPRECIATION OF RS. 3,39,668/- EITHER UNDER THE HEAD 'IN COME FROM BUSINESS' OR UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. 4. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN MAKING DISA LLOWANCE U/S 4A AT RS. 1,08,559/- AND NOT RESTRICTING THE SAME AT RS. 133/- YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER AND/OR AMEN D ALL OR ANY OF GROUNDS BEFORE THE FINAL HEARING OF APPEAL. 3. THE ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LD . CIT(A) ERRED IN HOLDING THAT THE ASSESSEE HAS NOT CARRIED OUT ANY BUSINE SS OPERATIONS DURING THE YEAR. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN THE PR ESENT CASE IS A LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF TRADING IN SHARES , STOCKS, DEBENTURES, BONDS, FIXED AND OTHER DEPOSITS INCLUDING FINANCE OF S HORT AND LONG TERM DEPOSITS ETC. 4.1 THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS SHOW N INCOME FROM OTHER SOURCES AMOUNTING TO RS. 70,42,709/- AS DETAILED UNDER: SR. NO. PARTICULARS AMOUNT 1. BANK INTEREST 3,10,188/- 2. OTHER INTEREST 66,17,003/- 3. DIVIDEND INCOME 3,597/- 4. INTEREST ON INCOME TAX REFUND 1,11,921/- 3 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 TOTAL 70,42,709/- (-) EXEMPTED DIVIDEND INCOME (-) 3,597/- TAXABLE INCOME 70,39,112/- 4.2 THE ASSESSEE HAS NOT SHOWN ANY SALES/INCOME FROM OPE RATIONS IN THE YEAR UNDER CONSIDERATION BUT HAS CLAIMED EXPENSES IN ITS PROFI T AND LOSS ACCOUNT AMOUNTING TO RS. 68,34,897/- ONLY. THESE EXPENSES INCLUDED THE FOLL OWING: SR NO. PARTICULARS AMOUNT 1. SALARY, WAGES & OTHER BENEFITS 26,14,916/- 2. ADMINISTRATIVE & GENERAL EXPENSES 35,24,952/- 3. INTEREST & FINANCIAL EXPENSES 3,39,668/- 4. DEPRECIATION 3,35,361/- TOTAL 68,34,897/- 4.3 AS A RESULT, THE ASSESSEE HAS SHOWN LOSS OF RS. 60,51,522/- AF TER MAKING THE SUITABLE ADJUSTMENT ON ACCOUNT OF DEPRECIATION CLAI MED UNDER THE COMPANIES ACT VIS--VIS UNDER THE INCOME TAX ACT. 4.4 THE ASSESSEE SET OFF THE BUSINESS LOSS AGAINST THE INCOME FROM OTHER SOURCES AND AFTER SUCH ADJUSTMENT, THE ASSESSEE HAS DECL ARED AN INCOME OF RS. 9,87,590/- IN ITS INCOME TAX RETURN. HOWEVER, THE AO DURING THE ASSESSMENT PROCEEDINGS OBS ERVED THAT THE ASSESSEE HAS NOT CARRIED OUT ANY BUSINESS ACTIVITY THERE FORE IT IS NOT ELIGIBLE FOR CLAIMING THE DEDUCTION ON ACCOUNT OF LOSSES UNDER THE HEAD BUSINESS AND PROFESSION ARISING FROM THE CLAIM OF EXPENSES AS DISCU SSED ABOVE. ACCORDINGLY, THE AO VIDE LETTER DATED 28.02.2014 ISSUED SHOW-CAUSE NOTICE TO THE ASS ESSEE. 4 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 4.5 THE ASSESSEE IN COMPLIANCE TO IT VIDE LETTER DATED 0 7.03.2014 SUBMITTED THAT ALL THE EXPENSES CLAIMED IN THE PROFIT AND LOSS ACC OUNT WERE EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. IT WAS ALSO CLAIMED THAT ON THE ADVICE OF THE FINANCIAL EXPERTS THE INCOME FROM INTEREST WAS SHOWN IN THE HEAD INCOME FROM OTHER SOURCES. 4.6 ALL THE EXPENSES CLAIMED IN THE PROFIT AND LOSS ACCO UNT WERE HAVING DIRECT NEXUS TO THE INTEREST INCOME. THEREFORE, THE S AME IS ELIGIBLE FOR DEDUCTION. AS FAR AS BAD DEBTS OF RS.3,87,793/- IS CONCERNED, THE ASSESSEE HAS OFFERED THE IMPUGNED AMOUNT AS INCOME IN THE EARLIER Y EARS. THE ASSESSEE ALSO CLAIMED THAT THE DEPRECIATION WAS CLAIMED AS PER THE PR OVISION OF SECTION 32 OF THE ACT THEREFORE THE SAME IS ELIGIBLE FOR DEDUCTION AGAINST THE INTEREST INCOME. 4.7 THE ASSESSEE ALSO SUBMITTED THAT THE PROFESSIONAL CHAR GES WERE INCURRED BY IT IN CONNECTION WITH THE RECOVERY OF THE PRINCIPLE AMOU NT FROM THE PARTIES TO WHOM THE ADVANCE WAS GIVEN ON INTEREST BASIS. 4.8 THE ASSESSEE ALSO SUBMITTED THAT THERE IS NO PROHIB ITION FOR SETTING OFF THE BUSINESS LOSS AGAINST THE INCOME FROM OTHER SOURCES FOR THE YEAR UNDER CONSIDERATION AS PER THE PROVISION OF SECTION 71 OF THE ACT. HOWEVER, THE AO DISAGREED WITH THE SUBMISSION OF THE ASSESSEE BY OBSERVING THAT THERE WAS NO OPERATION CARRIED OUT DURING THE YEAR. THEREFORE, IN THE ABSENCE OF ANY BUSINESS ACTIVITY THERE CANNOT BE ANY CL AIM OF EXPENSES IN THE PROFIT AND LOSS ACCOUNT. ACCORDINGLY, THE AO HELD THAT T HE ASSESSEE ADOPTED A COLORABLE DEVICE TO ESCAPE FROM THE INCOME TAX LIABILI TY ON THE INTEREST INCOME. 5 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 ACCORDINGLY, THE AO DISALLOWED THE SUM OF RS. 60,51,522/- AN D ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD CIT(A). T HE ASSESSEE BEFORE THE LD CIT(A) SUBMITTED THAT IT WAS INCORPORATED ON 3 RD JULY, 1995 FOR THE PURPOSE OF STOCK BROKING ACTIVITIES AS WELL AS GIVING LOANS AND ADVANCES FOR THE PURPOSE OF INTEREST INCOME. BOTH THE ACTIVITIES OF TH E ASSESSEE WERE DULY MENTIONED IN THE MAIN OBJECT OF ITS MEMORANDUM OF ASSOCIATION. 5.1 THE ASSESSEE UP TO THE A.Y. 2006-07 HAS BEEN OFFERING IN TEREST INCOME UNDER THE HEAD BUSINESS AND PROFESSION WHICH WAS ALSO D ULY ACCEPTED BY THE REVENUE EITHER U/S 143(1) OR 143(3) OF THE ACT. 5.2 THERE WERE SCRUTINY ASSESSMENTS U/S 143(3) OF THE ACT PERTAINING TO THE A.YS. 2003-04 & 2006-07 WHEREIN, THE INTEREST INCOME WAS ACCEP TED FROM THE SOURCE OF BUSINESS AND PROFESSION. 5.3 SUBSEQUENT TO THE A.Y. 2006-07 THE AUDITOR OF THE COMPAN Y ADVISED TO SHOW THE INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AS THE ASSESSEE CANNOT CARRY OUT MONEY LENDING BUSINESS WITHO UT GETTING IT-SELF REGISTERED WITH RBI AS NBFC. THEREFORE, THE ASSESSEE O N THE ADVICE OF THE AUDITOR STARTED OFFERING INTEREST INCOME UNDER THE HE AD INCOME FROM OTHER SOURCES. SIMILARLY, THE ASSESSEE WAS CLAIMING EXPENSES INCURRED IN RELATION TO SUCH INTEREST INCOME UNDER THE HEAD BUSINESS AND PROFESSI ON. AS SUCH, THERE WAS NO INCOME UNDER THE HEAD BUSINESS AND PROFESSION BUT THE EXPENSES WERE CLAIMED 6 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 UNDER THE SAME HEAD. SIMULTANEOUSLY, NO EXPENSES WERE C LAIMED BY THE ASSESSEE AGAINST THE INTEREST INCOME CLASSIFIED UNDER THE HEAD INCOME FROM OTHER SOURCES. SECONDLY, THERE WAS LOSS UNDER THE BUSINESS HEAD AND IN COME UNDER THE HEAD INCOME FROM OTHER SOURCES WHICH WAS SET OFF AGAINST E ACH OTHER. THIS PRACTICE WAS FOLLOWED BY THE ASSESSEE CONSISTENTLY WHICH WAS ALS O ACCEPTED BY THE REVENUE U/S 143(1) OF THE ACT. THERE WAS ALSO NO REOPENIN G ON ACCOUNT OF INCOME ESCAPING ASSESSMENT U/S 147 OF THE ACT. IN VIEW OF ABOVE, THE ASSESSEE SUBMITTED THAT THE INTER EST INCOME SHOWN BY IT SHOULD BE ACCEPTED AS BUSINESS INCOME AND ACCORDINGLY , THE LOSS ON ACCOUNT OF EXPENSES CLAIMED BY IT UNDER THE HEAD BUSINESS AND PR OFESSION SHOULD BE ADJUSTED AGAINST SUCH BUSINESS INCOME. 5.4 WITHOUT PREJUDICE TO THE ABOVE, THE ASSESSEE ALSO SUBM ITTED THAT SETTING OFF LOSSES UNDER THE HEAD BUSINESS AND PROFESSION AGAI NST THE INCOME COMPUTED UNDER THE HEAD INCOME FROM OTHER SOURCES WAS NOT INCO NSISTENT WITH THE PROVISION OF SECTION 71 OF THE ACT. 5.5 THE ASSESSEE ALSO SUBMITTED THAT THE BUSINESS ACTIVIT Y OF IT WAS VERY MUCH IN EXISTENCE AS IT HAS SHOWN PURCHASES OF GOLD AND SIL VER BULLION WORTH RS.83,00,000/- WHICH WAS LYING IN STOCKING TRADE IN ITS BALANCE SHEET AS ON 31.03.2011. THIS ACTIVITY OF PURCHASING GOLD/SILVER BULLION AND SHOWING AS STOCKING TRADE WAS NOT DISTURBED BY THE AO IN THE ASSESSMENT PR OCEEDINGS. 7 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 5.6 THE ASSESSEE ALSO CLAIMED THAT IF THE MISTAKE HAS BEEN COMMITTED BY IT IN THE INCOME TAX RETURN, THEN IT WAS THE DUTY OF THE ASSE SSING OFFICER TO SET RIGHT THE MISTAKE COMMITTED BY IT. IN THIS REGARD, THE ASSESS EE RELIED ON THE CIRCULAR ISSUED BY CBDT NO. 14(XL-35), DATED 11-4-1955 AND THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF S.R. KOSHTI VS. CIT REPORTED IN 276 ITR 165. 5.7 THE ASSESSEE ALSO CLAIMED THAT MERELY CLASSIFYING THE INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES WOULD NOT C HANGE THE CHARACTER OF THE INTEREST INCOME WHICH IS CARRIED OUT IN A SYSTEMAT IC MANNER THEREFORE THE INTEREST INCOME SHOULD BE TREATED AS BUSINESS AND PROF ESSION. THERE IS DIRECT NEXUS BETWEEN THE EXPENDITURE CLAIMED BY THE ASSESSE E AGAINST SUCH INTEREST INCOME THEREFORE THE SAME SHOULD BE ALLOWED DEDUCTION AGAIN ST SUCH INCOME. 5.8 ONCE, THE INCOME OF THE ASSESSEE HAS BEEN TREATED AS B USINESS INCOME THEN THE ASSESSEE IS ALSO ELIGIBLE FOR DEDUCTION ON AC COUNT OF BAD DEBTS AMOUNTING TO RS.3,87,793/- OUT OF WHICH A SUM OF RS.3,05,642/- WAS OF FERED TO TAX IN THE EARLIER YEARS. THE BALANCE AMOUNT OF RS.82,151/- ( 3,87,793 3,05,642) WILL BE ALLOWED AS DEDUCTION ARISING IN THE COURSE OF THE BUSIN ESS. HOWEVER, THE LD CIT(A) DISREGARDED THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY HOL DING THAT IT HAS NOT CARRIED OUT ANY BUSINESS ACTIVITY. THE RELEVANT EXTRACT OF THE ORDER IS R EPRODUCED BELOW: 4.3. I HAVE CONSIDERED THE FACTS OF THE CASE, THE SUBMISSIONS OF THE APPELLANT AND THE AO'S OBSERVATION. FROM THE SUBMISSIONS MADE BY THE APPELLANT, IT IS AN ADMITTED FACT THAT THE APPELLANT HAD ITSELF SHOWN THE INCOME EARNED BY WAY OF INTEREST UNDER THE HEAD 'INCOME FROM OTHER SOURC ES'. THE REASON BEHIND THIS HAS ALSO BEEN EXPLAINED BY THE APPELLANT ITSE LF BY STATING THAT SINCE IT HAD BEEN NOT REGISTERED AS NBFC WITH RBI, HENCE , THE INTEREST 8 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 INCOME EARNED BY IT COULD NOT BE ASSESSED AS BUSINESS I NCOME AND WERE TO BE ASSESSED AS INCOME FROM OTHER SOURCES ONLY. THE APPEL LANT HAS RELIED UPON THE DECISIONS OF THE ITAT AHMEDABAD IN THE CASE OF NATIONAL HOUSING FINANCE CORPORATION LTD. (SUPRA) TO THE EFFECT THAT INTEREST INCOME SHOULD STILL BE TAXED AS BUSINESS INCOME. BUT, IT IS NOT ACCEPTABLE IN VIEW OF THE FACT THAT IN THIS CASE, THE ASSESSEE HAD IT SELF OFFERED THE INCOME UNDER THE HEAD 'INCOME FROM BUSINESS', BUT THE A O HAD ASSESSED THE INTEREST INCOME AS INCOME FROM OTHER SOURCES. IN T HE PRESENT CASE, THE APPELLANT HAD ITSELF SHOWN THE INTEREST INCOME UNDER THE HEAD INCO ME FROM OTHER SOURCES AND HENCE, THE ABOVE MENTIONED DECISION IS NOT APPLICABLE TO THE FACTS OF THIS CASE. 4.3.1. THE APPELLANT'S OTHER CONTENTION THAT SINCE IT HAD PURC HASED GOLD AND SILVER BULLION WORTH RS.83,00,000/- DURING THE YEAR AND HAS SHOWN IT AS STOCK IN TRADE, HENCE IT SHOULD BE PRESUMED TO BE CARRYI NG ON THE BUSINESS, IS ALSO NOT ACCEPTABLE IN VIEW OF THE FACT THAT THIS IS A SOLITARY TRANSACTION REPORTED BY THE APPELLANT DURING THIS YEAR. UNTIL AND UN LESS THE APPELLANT DOES DEALING IN GOLD AND SILVER BULLION ON SUSTAINED BASI S, IT CANNOT BE SAID TO CARRYING OUT BUSINESS IN THESE COMMODITIES, THU S, IT IS HELD THAT THE APPELLANT HAS NOT CARRIED OUT ANY BUSINESS ACTIVITY C LUING THE FY 2010-11. BEING AGGRIEVED BY THE ORDER OF LD CIT(A) ASSESSEE IS IN APPEAL B EFORE US. 6. THE LD AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1-83 AND REITERATED THE SUBMISSION AS MADE BEFORE THE LD CIT(A). 7. ON THE OTHER HAND, LD DR SUBMITTED THAT THERE WAS NO BUSINESS ACTIVITY CARRIED OUT BY THE ASSESSEE DURING THE YEAR UNDER CONS IDERATION. THE LD DR ALSO ARGUED THAT THE ASSESSEE ITSELF HAS CLASSIFIED INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THEREFORE, THE SAME CANNOT B E TREATED AS INCOME UNDER THE HEAD BUSINESS AND PROFESSION. THE LD DR VEHE MENTLY SUPPORTED THE ORDER OF AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD. THE ASSESSEE IN THE INSTANT CASE HAS SHOWN IN TEREST INCOME UNDER THE 9 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 HEAD INCOME FROM OTHER SOURCES ON THE ADVICE OF THE C ONSULTANT. AS SUCH, IT WAS ADVISED TO THE ASSESSEE THAT IT CANNOT CARRY OUT MONEY LENDING BUSINESS IN A SYSTEMATIC MANNER WITHOUT HAVING APPROVAL FROM THE RBI AS NBFC. THEREFORE, THE ASSESSEE CLASSIFIED INTEREST INCOME AS INCOME UNDE R THE HEAD FROM OTHER SOURCES. 8.1 IT IS UNDISPUTED FACT THAT THE ASSESSEE HAS CLAIMED SEVERAL EXPENSES FOR RUNNING ITS MONEY LENDING ACTIVITY WHICH WERE CLASSIF IED UNDER THE HEAD BUSINESS AND PROFESSION. CONSEQUENTLY, THERE WAS INCOM E UNDER THE HEAD INCOME FROM OTHER SOURCES BUT THERE WAS LOSS UNDER T HE HEAD BUSINESS AND PROFESSION. ACCORDINGLY, THE AO HELD THAT THE ASSESSE E IS NOT ENTITLED TO CLAIM THE SET OFF OF THE LOSS SHOWN UNDER THE HEAD BUSINES S AND PROFESSION AGAINST THE INCOME FROM OTHER SOURCES ON THE GROUND THAT THERE W AS NO BUSINESS ACTIVITY. THE VIEW TAKEN BY THE AO WAS SUBSEQUENTLY CONFIRMED BY THE LD C IT(A). 8.2 FROM THE PRECEDING DISCUSSION, WE NOTE THAT CERTAIN UNDISPUTED FACTS AS DETAILED UNDER: I. THE ASSESSEE UP TO THE A.Y. 2006-07 WAS SHOWING INTEREST INC OME UNDER THE HEAD BUSINESS AND PROFESSION WHICH WAS DULY ACCEPTED BY THE REVENUE EITHER U/S 143(1) OR 143(3) OF THE ACT. AS SUCH , THERE WAS SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT PERTAINING TO THE A.Y. 2003- 04 & 2006-07 WHERE REVENUE HAS ACCEPTED INTEREST INCOME AS IN COME UNDER THE HEAD BUSINESS AND PROFESSION. II. SUBSEQUENT TO THE A.Y. 2006-07, THE ASSESSEE HAS CHANGED ITS M ETHOD OF DISCLOSING THE INTEREST INCOME ON THE ADVICE OF T HE CONSULTANT. ACCORDINGLY, THE ASSESSEE CLASSIFIED INTEREST INCOME FROM OT HER SOURCES AND CLAIMED LOSSES UNDER THE HEAD BUSINESS AND PROFESSION ON ACC OUNT 10 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 OF EXPENSES. ACCORDINGLY, THE ASSESSEE UP TO THE A.Y. 2010 -11 CLAIMED THE SET OFF OF BUSINESS LOSSES AGAINST THE INCOME FRO M OTHER SOURCE WHICH WAS NOT DISPUTED BY THE REVENUE. FROM THE ABOVE, IT IS CLEAR THAT THE STAND OF THE ASSESSE E WAS ACCEPTED BY THE REVENUE IN ALL THE YEARS AS DISCUSSED ABOVE EITHER THE INTEREST INCOME WAS ACCEPTED AS BUSINESS INCOME OR THE BUSINESS LOSS WAS AL LOWED TO SET OFF AGAINST THE INTEREST INCOME. THERE WAS NO MATERIAL CHANGE IN THE FACTS AND CIRCUMSTANCES IN THE YEAR UNDER CONSIDERATION. THEREFOR E, IN OUR CONSIDERED VIEW, THE REVENUE CANNOT TAKE A DIFFERENT STAND IN THE S UBSEQUENT YEAR. IN THIS REGARD, WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD. REPORTED IN 358 ITR 295 , WHEREIN IT WAS HELD AS UNDER: 28. SECONDLY, AS NOTED BY THE TRIBUNAL, A CONSISTENT VIEW HA S BEEN TAKEN IN FAVOUR OF THE ASSESSEE ON THE QUESTIONS RAISED, STARTI NG WITH THE ASSESSMENT YEAR 1992-93, THAT THE BENEFITS UNDER THE ADVANCE LICENCES OR UNDER THE DUTY ENTITLEMENT PASS BOOK DO NOT REPRESENT THE REAL INCOM E OF THE ASSESSEE. CONSEQUENTLY, THERE IS NO REASON FOR US TO TAKE A DIF FERENT VIEW UNLESS THERE ARE VERY CONVINCING REASONS, NONE OF WHICH HAVE BEEN POINTED OUT BY THE LEARNED COUNSEL FOR THE REVENUE. 8.3 SIMILARLY, WE ARE ALSO OF THE VIEW THAT PRINCIPLE OF C ONSISTENCY SHOULD BE APPLIED IN THE GIVEN FACTS AND CIRCUMSTANCES AS THERE WE RE NO CHANGE IN COMPARISON TO THE PREVIOUS ASSESSMENT YEAR. IN THIS CO NNECTION, ATTENTION MAY PLEASE BE INVITED TO THE DECISION GIVEN BY THE HON'B LE SUPREME COURT OF INDIA IN THE MATTER OF RADHASOAMI SATSANG V COMMISSIONER OF INCOME TAX REPORTED IN 193 ITR 321 (SC) WHEREIN THE HON'BLE SUPREME COURT HAS INTER ALIA HELD AS UNDER : 'WE ARE AWARE OF THE FACT THAT, STRICTLY SPEAKING, RES JUDI CATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS. AGAIN, EACH ASSESSMENT YEAR BEIN G A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAM ENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POS ITION TO BE SUSTAINED 11 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APP ROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. ON THESE RE ASONINGS, IN THE ABSENCE OF ANY MATERIAL CHANGE JUSTIFYING THE REVENUE TO TAKE A DIFFERENT VIEW OF THE MATTER - AND, IF THERE WAS NO CHANGE, IT WAS IN SUPPOR T OF THE ASSESSEE - WE DO NOT THINK THE QUESTION SHOULD HAVE BEEN REOPENED AND CONTRARY TO WHAT HAD BEEN DECIDED BY THE COMMISSIONER OF INCOME-TAX IN THE EARLIER P ROCEEDINGS, A DIFFERENT AND CONTRADICTORY STAND SHOULD HAVE BEEN TAKEN. 'PARTIES ARE NOT PERMITTED TO BEGIN FRESH LITIGATIONS BECAUSE OF NEW VIEWS THEY MAY ENTERTAIN OF THE LAW OF THE CASE, OR NEW VERSIONS WH ICH THEY PRESENT AS TO WHAT SHOULD BE PROPER APPREHENSION BY THE COURT OF THE LEGA L RESULT EITHER OF THE CONSTRUCTION OF THE DOCUMENTS OR THE WEIGHT OF CERTAI N CIRCUMSTANCES. IF THIS WERE PERMITTED LITIGATION WOULD HAVE NO END, EXCEPT WHEN LEG AL INGENUITY IS EXHAUSTED. IT IS A PRINCIPLE OF LAW THAT THIS CANNOT BE PERMITTED . .. 8.4 IN ADDITION TO THE ABOVE, WE ALSO NOTE THAT THE ASSESS EE HAS BEEN CARRYING ON THE BUSINESS OF MONEY LENDING IN A SYSTEMATIC MANNE R WITHOUT HAVING THE REGISTRATION WITH RBI AS NBFC. MERELY, THE FACT THAT THE ASSESSEE IS NOT REGISTERED WITH RBI AS NBFC, CANNOT LEAD TO DRAW AN INFE RENCE THAT THE ASSESSEE IS NOT CARRYING OUT THE BUSINESS ACTIVITY. THE REGISTRATION WITH RBI AS NBFC AND BUSINESS ACTIVITY OF THE ASSESSEE, BOTH ARE DIF FERENT ASPECTS AND CANNOT BE APPLIED FOR HOLDING THAT THE ASSESSEE IS NOT ENGAGED IN THE BUSINESS ACTIVITY. IN THIS REGARD, WE ALSO FIND SUPPORT AND GUID ANCE FROM THE ORDER OF ITAT AHMEDABAD BENCHES IN THE CASE OF INTERNATIONAL HOU SING FINANCE CORPORATION LTD. IN ITA NO.868/AHD/2004 VIDE ORDER DATED 05.08.2011 WHEREIN IT WAS HELD AS UNDER: '5. WE HAVE CAREFULLY CONSIDERED ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE AO FOR ASSE SSING THE INCOME OF THE ASSESSEE UNDER THE HEAD 'INCOME FROM OTHER SOURCES' HAS G IVEN THE FOLLOWING FINDINGS: 'THE ASSESSEE COMPANY CLAIMS TO BE ENGAGED IN THE BUSIN ESS OF HOUSING FINANCE (REFER 18A OF FORM NO.3CD). HOWEVER, THE CHARTERED ACCOUNT ANTS IN HIS NOTE SPECIFICALLY CONCLUDED THAT THE ASSESSEE COMPANY HAS NOT BEEN REGISTERED AS A HOUSING FINANCE COMPANY. THE CHARTERED ACCOUNTANT HAS IN F ACT CLEARLY AND CATEGORICALLY MENTIONED THAT THE ASSESSEE COMPANY IS NOT LIABLE TO CARRY ON THE 12 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 BUSINESS OF HOUSING FINANCE. THE RELEVANT PORTION OF THE CHARTERED ACCOUNTANTS NOTES IS REPRODUCED BELOW: '....15. THE COMPANY HAS CARRIED ON THE BUSINESS IN THE NATURE OF FINANCING & INVESTMENTS IN VIOLATION OF THE NORMS OF NATIONAL HOUS ING BANK. THE COMPANY'S APPLICATION FOR REGISTRATION AS REGISTERED HOUSING FINANCE HAS BEEN REJECTED BY NATIONAL HOUSING BANK. AND HENCE THE COMPANY HA S BEEN PROHIBITED TO CARRY ON THE BUSINESS ACTIVITIES AND ALSO PROHIBITED F ROM ACCEPTANCE AND RENEWAL OF PUBLIC DEPOSIT. HOWEVER, THE COMPANY IS STILL CARRYING ON THE BUSINESS AND HAS BEEN ACCEPTING AND RENEWING DEPOSITS I N VIOLATION OF SECTION 29A OF NATIONAL HOUSING BANK. IN VIEW OF THE ABOVE, THE ASSESSEE COMPANY'S CLAIM REGAR DING THE BUSINESS OF HOUSING FINANCE DOES NOT HOLD GOOD. THE RECEIPTS NEED TO BE TREATED AS 'INCOME FROM OTHER SOURCES'. THIS VIEW IS FURTHER SUPPORTED BY THE FACT THA T THE CHARTERED ACCOUNTANT HIMSELF HAS CONCLUDED THAT THE INTEREST EARNED ON THE LOANS GRANTED IN EARLIER YEARS AND THE DEPLOYMENT OF THE SAME FALLS AS 'INCOME FROM FUND MANAGEMENT'. THE COMPANY HAS ALSO NOT PRESCRIBED TO THE N ORMS LAID DOWN BY NATIONAL HOUSING BANK ACT. THE REMARK OF THE CHARTERED A CCOUNTANTS IN THIS REGARD IS REPRODUCED BELOW TO HIGHLIGHT THE SAME. THE REMARKS OF THE CHARTERED ACCOUNTANT AND THE FACTS NA RRATED ABOVE CLEARLY INDICATE THAT THE ASSESSEE COMPANY IS NOT IN THE BUSINES S OF HOUSING FINANCE. THE INCOME RECEIVED FROM THE ADVANCES/LOANS CAN ONLY BE TREA TED AS 'INCOME FROM OTHER SOURCES'. ACCORDINGLY, THE RECEIPTS OF THE ASSESS EE COMPANY FOR 'INCOME FROM OTHER SOURCES' ARE WORKED OUT AS BELOW: INCOME FROM OTHER SOURCES (INTEREST INCOME, SERVICE CHARGES ETC.) RS.62,48,428/- LESS: DIRECT EXPENSES (INTEREST PART) RS. 15,61,546/- INCOME FROM OTHER SOURCES RS.46,36,882/- THUS, AN AMOUNT OF RS.46,86,882/- IS ADDED TO THE TOTAL INCO ME OF THE ASSESSEE COMPANY AS 'INCOME FROM OTHER SOURCES'. PENALTY PROCEEDING S U/S.271(1)(C) OF THE IT ACT ARE INITIATED SEPARATELY FOR FURNISHING INAC CURATE PARTICULARS OF INCOME LEADING TO CONCEALMENT OF INCOME. FROM THE ABOVE, IT IS EVIDENT THAT THE ONLY REASON FOR THE ASSESSING THE INCOME UNDER THE HEAD 'INCOME FROM OTHER SOURCE' WAS THAT THE ASSES SEE COMPANY WAS NOT REGISTERED AS A HOUSING FINANCE COMPANY- IN OUR OPINION, WHETHER THE ASSESSEE COMPANY IS REGISTERED AS A HOUSING FINANCE COMPANY OR NOT IS IRRELEVANT FOR DETERMINING WHETHER THE ASSESSEE IS CARRYING ON THE 13 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 BUSINESS OF FINANCING OR NOT. IF THE ASSESSEE IS CAR RYING ON THE BUSINESS OF FINANCE, DESPITE NOT BEING REGISTERED, AS A HOUSING FINANCE COMPANY, ITS INCOME IS TO BE ASSESSED UNDER THE HEAD 'INCOME FRO M BUSINESS'. IT IS NOT DISPUTED BY THE REVENUE THAT THE ASSESSEE WAS ACTUALLY CARRYI NG ON THE BUSINESS OF FINANCING, DESPITE REFUSAL OF REGISTRATION BY THE NHB. ONCE THE BUSINESS OF FINANCE WAS CARRIED OUT BY THE ASSESSEE, IT HAS TO BE ASSESSED UNDER THE HEAD 'INCOME FROM BUSINESS'. WE THEREFORE, SET ASIDE THE ORDER OF THE AUTHORITIES BELO W AND RESTORE THE MATTER BACK TO THE FILE OF THE AO. WE DIRECT HIM TO ASSESS THE ASSESSEES INCOME FROM FINANCE BUSINESS UNDER THE HEAD 'INCOME FROM BUSINESS' I N ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT WHILE ASSESSING THE INCOME, HE WILL ALLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. SINCE WE SET ASIDE THE ORDER OF THE AO FOR ASSESSING THE ASSESSEE'S INCOME UNDER THE HEAD 'INCOME FROM BUSINESS', VARIOUS GROUNDS RA ISED BY THE ASSESSEE AGAINST THE DISALLOWANCE NEEDS NO SPECIFIC ADJUDICATIO N AND WE DIRECT THE AO TO CONSIDER THE ALLOWABILITY OF ASSESSEE'S CLAIM WITH REGARD TO THE EXPENDITURE UNDER THE HEAD 'INCOME FROM BUSINESS' AND DETERMINE THE INCOME UN DER THE HEAD 'PROFIT AND GAINS OF THE BUSINESS IN ACCORDANCE WITH LAW.' 8.5 WE ALSO NOTE THAT IF THE ASSESSEE HAS MADE WRONG CLAIM IN THE INCOME TAX RETURN THAT CANNOT BE DECIDED AGAINST THE ASSESSEE. IT W AS THE DUTY OF THE REVENUE TO SET THE RIGHT THE MISTAKES COMMITTED BY THE ASSESSEE. IN THIS REGARD, WE RELY ON THE JUDGMENT OF JURISDICTIONAL HIGH COUR T IN THE CASE OF S.R. KOSHTI VS. CIT(SUPRA) WHEREIN, IT WAS HELD AS UNDER: THE SUPREME COURT HAS OBSERVED IN NUMEROUS DECISIONS, INCLUDING RAMLAL V. REWA COALFIELDS LTD. AIR 1962 SC 361, STATE OF WEST BENGAL V. A DMINISTRATOR, HOWRAH MUNISIPALITY AIR 1972 SC 749 AND BABUTMAL RAICHAND OSWAL V. LAXMIBAI R. TARTE AIR 1975 SC 1297, THAT THE STATE AUTHORITIES SHOULD NOT RAISE TECHNICAL PLEAS IF THE CITIZENS HAVE A LAWFUL RIGHT AND THE LAWFUL RIGHT IS BEING DENIED TO THEM MERELY ON TECHNICAL GROUNDS. THE STATE AU THORITIES CANNOT ADOPT THE ATTITUDE WHICH PRIVATE LITIGATES MIGHT ADOPT. 8.6 WE ALSO NOTE THAT THE GENUINENESS OF THE EXPENSES CL AIMED BY THE ASSESSEE HAVE NOT BEEN DOUBTED BY THE AUTHORITIES BELO W. MOREOVER, THERE IS NO ISSUE REGARDING THE GENUINENESS/REASONABLENESS OF THE EXPENSES CLAIMED BY THE 14 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 ASSESSEE ARISING FROM THE ORDER OF AUTHORITIES BELOW. THEREFORE, WE ARE NOT INCLINED TO ADJUDICATE THE SAME. IN VIEW OF ABOVE, WE ARE OF THE VIEW THAT THE INTEREST INCOME OF THE ASSESSEE SHOULD HAVE BEEN TREATED AS INCOME FROM BUSINESS AND PR OFESSION. THEREFORE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE A O TO TREAT THE INTEREST INCOME OF THE ASSESSEE AS INCOME UNDER THE HEAD BUSINESS AND PRO FESSION. 8.7 AS WE HAVE SET ASIDE THE ORDER OF LD CIT(A) AND DIRE CTED THE AO TO TREAT THE INTEREST INCOME OF THE ASSESSEE UNDER THE HEAD BU SINESS AND PROFESSION, THE OTHER GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL DO NOT REQUIRE ANY SEPARATE/SPECIFIC ADJUDICATION. ACCORDINGLY, WE DIRECT THE AO TO CONSIDER THE ALLOWABILITY OF THE EXPENSES CLAIMED BY THE ASSESSEE UN DER THE HEAD BUSINESS AND PROFESSION AS PER THE PROVISION OF LAW. 8.8 WE ALSO NOTE THAT THE ASSESSEE HAS EARNED DIVIDEND INC OME AMOUNTING TO RS.3597/- ONLY WHEREAS, THE CIT(A) HAS MADE THE DISALLOWANCE OF THE EXPENSES IN RELATION TO THE DIVIDEND INCOME AMOUNTING TO RS. 1,08,559/- ONLY. IT IS A SETTLED LAW THAT THE DISALLOWANCE OF 14A R.W.R 8D CANNOT EXC EED THE AMOUNT OF DIVIDEND INCOME. IN THIS REGARD WE PLACE OUR RELIANCE O N THE ORDER OF MUMBAI TRIBUNAL IN THE CASE OF FUTURE CORPORATE RESOURCES LT D. VS. DCIT REPORTED IN 167 ITD 33 WHEREIN IT WAS HELD AS UNDER: THE ASSESSEE ARGUED THAT IT HAD EARNED MEAGER DIVIDEND INCOME OF RS. 24,138 AS AGAINST WHICH, THE AO DISALLOWED A SUM OF RS. 3,36,28,000 WHICH IS MORE THAN THE EXEMPT INCOME. THE ASSESSEE FURTHER ARGUED THAT DISALLOWANCE U/ S 14A CANNOT EXCEED AMOUNT OF EXEMPT INCOME. THE ASSESSEE RELIED UPON CASE LAWS IN SUPPORT OF ITS ARGUMENTS. WE FIND THAT THE HON'BLE DELHI HIGH COURT IN THE CASE OF JOINT INVESTMENTS (P.) LTD. (SUPRA) HELD THAT THE WINDOW FOR DISALLOW ANCE IS INDICATED IN SECTION 14A AND IS ONLY TO THE EXTENT OF DISALLOWING EXPENDI TURE INCURRED BY THE ASSESSEE IN RELATION TO TAX EXEMPT INCOME. THIS PROPORTI ON OR 15 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 PORTION OF THE TAX EXEMPT INCOME SURELY CANNOT SWALLOW THE ENTIRE AMOUNT AS HAS HAPPENED IN THIS CASE. WE FURTHER NOTICE THAT THE HON'BLE DELHI HIGH COUR T IN THE CASE OF CIT V. HOLCIM INDIA (P.) LTD. [2015] 57 TAXMANN.COM 28 HAS HELD THAT THERE CAN BE NO DISALLOWANCE U/S 14A IN THE ABSENCE OF EXEMPT INCOME. THE RATIONALE BEHIND THESE JUDGMENTS IS THAT THE AMOUNT OF DISALLOWANCE CANNOT EXCEED EXEMPT INCOME. IN THIS CASE, ON PERUSAL OF THE FACTS, WE FIND THAT THE ASSESSEE HAS EARNED EXEMPT INCOME OF RS. 24,138, WHEREAS THE AO DISALLOWED AN AMOUNT OF RS RS. 3,36,28,000. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO FOLLOWING THE RATIOS OF THE CASE LAWS DISCUSSED ABOVE, WE ARE OF THE VIEW THAT DISALLOWANCE U/S 14A CANNOT EXCEE D THE EXEMPT INCOME. HENCE, WE DIRECT THE AO TO RESTRICT DISALLOWANC E U/S 14A TO THE EXTENT OF EXEMPT INCOME EARNED BY THE ASSESSEE. ACCORDINGLY WE DIRECT THE AO TO RESTRICT THE DISALL OWANCE U/S 14A R.W.R. 8D OF THE ACT TO THE EXTENT OF DIVIDEND INCOME. IN VIEW OF ABOVE THE GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. NOW COMING TO ITA NO.2433/AHD/2015 FOR ASST. YEAR 2011-12: 9. REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. C.I.T. (A) ERRED IN HOLDING THAT BALANCE EXPENSES OF RS. 44, 29,921/-ARE TO BE ALLOWED AS A DEDUCTION U/S.57(III) OF THE ACT IN THE COMPUTA TION OF INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES, WITHO UT APPRECIATING THAT THE ASSESSEE HAS NOT CARRIED OUT ANY BUSINESS ACTIVITY AND THA T THE ASSESSEE DID NOT CLAIM DEDUCTION U/S.57(III) OF THE ACT AGAINST INCOME FR OM OTHER SOURCES IN THE RETURN OF INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. C.I.T. (A) ERRED IN APPLYING THE RATIO OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF SMT. VEERMATI RAMAKRISHNA 131 ITR 659 (GUJ) WITHOUT APPRECIATING T HE FACTS OF THE PRESENT CASE IS DISTINGUISHABLE FROM THE CASE OF SMT. VEERMATI RAMAKRISHNA IN AS MUCH AS THE ASSESSEE HAD CLAIMED DEDUCTI ON U/S. 57(III) OF THE ACT, WHEREAS IN THE PRESENT CASE, THE ASSESSEE DID NOT CL AIM DEDUCTION U/S. 57(III) OF THE ACT AGAINST INCOME FROM OTHER SOURCES IN THE RETURN OF IN COME. 16 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 10. AT THE TIME OF THE HEARING, WE OBSERVE THAT THE TAX E FFECT IN THE APPEAL FILED BY THE REVENUE IS LESS THAN RS. 20 LACS. AS PER T HE CIRCULAR NO. 3 OF 2018 DATED 11/07/2018 ISSUED BY CBDT RECENTLY ALL PENDING APPEALS FILED BY REVENUE ARE LIABLE TO BE DISMISSED/ WITHDRAWN/ NOT PRE SSED TO REDUCE THE LITIGATION WHERE THE TAX EFFECT DOES NOT EXCEED THE PRESCRIBED MONETARY LIMIT, I.E., RS.20 LACS. THE RELEVANT EXTRACT OF THE CIRCULAR IS REPRODUCE D BELOW: 2. IN SUPERSESSION OF THE ABOVE CIRCULAR, IT HAS BEEN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFOR E INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLPS/ APPEALS B EFORE SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIE D BELOW. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CA SES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: S. NO. APPEALS/ SLPS IN INCOME-TAX MATTERS MONETARY LIMIT (RS.) 1. BEFORE APPELLATE TRIBUNAL 20,00,000 2. BEFORE HIGH COURT 50,00,000 3. BEFORE SUPREME COURT 1,00,00,000 THE MONETARY LIMIT FOR FILING THE APPEALS BY THE REVE NUE BEFORE THE TRIBUNAL HAS BEEN INCREASED TO RS. 20 LACS. IT IS ALSO CLARIFIED I N THE SAID CIRCULAR THAT THE SAID MONETARY LIMIT IS APPLICABLE RETROSPECTIVELY EVEN TO THE APPEALS PENDING BEFORE THE TRIBUNAL. THE CBDT HAS ALSO INSTRUCTED THAT SUCH PENDING APPEALS BELOW THIS SPECIFIED TAX LIMIT OF RS.20 LACS MAY BE WITHDRAWN / NO T PRESSED . 11. IN THE CASE ON HAND, IT WAS NOTICED THAT THE TAX EFFEC T ON THE DISPUTED ISSUE RAISED BY THE REVENUE IS CLAIMED TO BE LESS TH AN RS.20 LACS. THEREFORE APPEAL OF THE REVENUE IS REQUIRED TO BE DISMISSED IN LIMINE IN TERMS OF THE ABOVE CIRCULAR. 17 ITA NOS.2208 & 2433 /AHD/2015 SOHAM SECURITIES LTD. (CROSS APPEALS) A.Y.. 2011-12 12. THE LD. DR FOR THE REVENUE FAIRLY AGREED ON THE APPLI CABILITY OF THE CBDT CIRCULAR NO. 3 OF 2018. ACCORDINGLY, THE APPEAL OF THE REVEN UE IS DISMISSED AS NOT MAINTAINABLE. HOWEVER, THE REVENUE IS AT THE LIBERTY TO MOVE THE MISCELLANEOUS APPLICATION TO RECALL THE ORDER IF THE TAX EFFECT EXCEEDS THE THRESHOLD LIMIT OR THE CASE OF THE REVENUE FALLS IN AN Y OF THE EXCEPTION PROVIDED IN THE AFORESAID CBDT CIRCULAR IN ANY MANNER. THE MA SHA LL BE FILED WITHIN THE PRESCRIBED TIME. HENCE THE APPEAL OF THE REVENUE IS DISMISSED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWE D AND APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 2 ND NOVEMBER, 2018 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER ( WASEEM AHMED ) ACCOUNTANT MEMBER AHMEDABAD; DATED 02/11/2018 PRITI YADAV, SR.PS ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' # / CONCERNED CIT 4. ' # () / THE CIT(A) 2, VADODARA. 5. &'( ! , ! , *+, , / DR, ITAT, AHMEDABAD. 6. (- ./ / GUARD FILE. / BY ORDER, & //TRUE COPY// '/# $% ( DY./ASSTT.REGISTRAR) &' (, #)* / ITAT, AHMEDABAD