ASST CIT 14(2), MUMBAI V. VENUS INTERNATIONAL, MUMBAI

ITA 2487/MUM/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3336 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Department
• Bench Allotted: F
• Assessment Year: 2004-2005
• Appeal Filed On: 11-04-2014
• Court: TRIBUNAL
• Assessee Lawyers: EKTA MALAVIA JOSHI
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.2487/MUM/2014 ASSESSMENT YEAR: 2004-05 AC IT 1 4 ( 2 ) EARNEST HOUSE, R.NO.302, 3 RD FLOOR, NARIMAN POINT MUMBAI -400021 / VS. VENUS INTERNATIONAL, 26/28 OLD HANUMANLANE, 1 ST FLOOR, KALBADEVI MUMBAI-400002 (REVENUE) (RES PONDENT) P.A. NO. A AAFV5850B REVENUE BY SHRI SANJEEV KASHYAP (DR) RESPONDENT BY MS. EKTA MALAVIA JOSHI (AR) !' / DATE OF HEARING : 07/01/2016 !' / DATE OF ORDER: 20/01/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-28, MUMBAI {(IN SHORT CIT(A)}, DATED 28.01.2014 FOR T HE VENUS INTERNATIONAL 2 ASSESSMENT YEAR 2004-05, DECIDED AGAINST THE ASSESS MENT ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO ) U/S 143(3) OF THE ACT, ON THE FOLLOWING GROUNDS: ' 1. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT BY NOT SUSTAINING ADDITION MADE ON ACCOUNT OF SHORTAGE AS THE ASSESSEE HAVE NEVER POINTED OUT DURING THE ASSESSMENT PROCEEDING THAT THE REASON FOR THE SAME IS SHRINKAGE DUE TO PROCESSING OF GREY FABRIC INTO FUR NISHED FABRICS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN NOT SUSTAINING THE DISALLOWANCE MADE ON ACCOUNT OF KEYMAN INSURANCE PREMIUM TAKEN ON THE LIFE OF PARTNERS, AS THE ASSES SEE HAS FAILED TO PROVE PARTNERS STATUS AS KEYMAN FOR CONDUCT OF BUSINESS EITHER BY THE PARTNERSHIP DEED OR BY CONDUCT OF THE BUSINESS SINCE NO SALARY/REMUNERATION/INTEREST HAS BEEN PAID TO ANY O F THE PARTNERS IN THE EARLIER YEARS. 3. FOR THE ABOVE MENTIONED REASONS AND ANY OTHER RE ASON THAT MAY BE URGED AT THE TIME OF HEARING, IT IS REQ UESTED THAT THE ORDER OF THE CIT(A) BE QUASHED AND THAT OF THE A.O. BE RESTORED.' 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI EKTA MALAVIA JOSHI, AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI SANJEEV KASHYAP, DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE R EVENUE. 3. THE MAIN ISSUE RAISED IN THIS APPEAL IS WITH REGARD TO ALLEGED FAILURE OF THE ASSESSEE IN DEDUCTION OF TAX AT SOURCE WHILE MAKING THE PAYMENT TO ARTISTS BY THE ASSESSEE AND ITS CONSEQUENT DISALLOWANCE U/S.40(A)(IA). VENUS INTERNATIONAL 3 3.1. ALTHOUGH, DURING THE COURSE OF HEARING APPEAL WAS HEARD ON MERITS BUT SUBSEQUENTLY IT HAS BEEN BROUGHT TO O UR NOTICE THAT RECENTLY CENTRAL BOARD OF DIRECT TAXES HAS ISS UE CIRCULAR NO.21/2015 DATED 10 TH DECEMBER, 2015. 3.2. IT IS NOTED BY US THAT TAX EFFECT IN THIS CASE IS APPARENTLY LESS THAN RS. 10,00,000/-. 3.3. WE HAVE GONE THROUGH THE AFORESAID CIRCULAR OF THE BOARD. IT HAS BEEN PROVIDED IN THE AFORESAID CIRCULAR THAT NO APPEAL SHALL BE FILED BY THE REVENUE IF THE TAX EFFECT INV OLVED IN THE APPEAL DOES NOT EXCEED A SUM OF RS. 10 LACS. IT HAS FURTHER BEEN PROVIDED THAT INSTRUCTIONS CONTAINED THEREIN S HALL APPLY RETROSPECTIVELY TO PENDING APPEALS ALSO. RELEVANT P ART OF THE CIRCULAR IS REPRODUCED BELOW: 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNAL. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH AP PEAL WAS FILED. 3.4. IT IS FURTHER NOTED BY US FROM THE ORDER OF LD. C IT(A) THAT TAX EFFECT IN THIS CASE IS LESS THAN THE AMOUNT OF VENUS INTERNATIONAL 4 RS.10,00,000/-. AS PER LAW, CIRCULAR OF CBDT HAS BI NDING EFFECT ON THE INCOME TAX AUTHORITIES. 3.5. IN VIEW OF THE ABOVE, WE FIND THAT THE APPEAL OF T HE REVENUE IS NOT MAINTAINABLE. THEREFORE, WE DISMISS THE SAME. 3.6. HOWEVER, WITH A VIEW TO FOLLOW PRINCIPLES OF NATUR AL JUSTICE, WE GIVE LIBERTY TO THE REVENUE TO FILE MIS CELLANEOUS APPLICATION U/S 254 IN CASE TAX EFFECT IS FOUND TO BE MORE THAN RS. 10,00,000/-. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2016. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER MUMBAI; $ DATED : 20/01/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. &'( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. +! + , ( & ) / THE CIT, MUMBAI. 4. +! + , / CIT(A)- , MUMBAI 5. /0 )12 , +! &' 12!3 , / DR, ITAT, MUMBAI 6. 4 / GUARD FILE. / BY ORDER, */& ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI