DCIT, Circle - 14(1), , Kolkata V. M/s. Bajoria Entertainment Pvt. Ltd., , Kolkata

ITA 2489/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2785 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 28-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM; SHANKAR HALDER
• Assessee Lawyers: NILESH KUMAR
• Keywords: Tax effect
• Section: 14A; 68

Judgement Text

1 ITA NO. 2489/KOL/2018 BAJORIA ENTERTAINMENT PVT. LTD. AY 2014-15 , D , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 2489/KOL/2018 ASSESSMENT YEAR: 2014-15 DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-14(1), KOLKATA. VS. M/S. BAJORIA ENTERTAINMENT PVT. LTD. (PAN: AADCB6134G) APPELLANT RESPONDENT DATE OF HEARING 24.04.2019 DATE OF PRONOUNCEMENT 07.06.2019 FOR THE APPELLANT S/ SHRI RADHEY SHYAM, CIT, DR & SHANKAR HALDER, JCIT, SR. DR. FOR THE RESPONDENT SHRI NILESH KUMAR, FCA ORDER PER SHRI A. T. VARKEY, JM: THIS APPEAL FILED BY ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A)-5, KOLKATA DATED 20.07.2018 FOR AY 2014-15. 2. AT THE OUTSET ITSELF, THE LD. AR HAS BROUGHT TO OUR ATTENTION TO THE FACT THAT THE REVENUE HAS PREFERRED THIS APPEAL WHICH HAS TAX EFF ECT OF LESS THAN RS. 20 LACS, THEREFORE, THE REVENUES APPEAL IS NOT MAINTAINABLE IN THE LIGHT O F THE CBDT CIRCULAR NO.3/2018 DATED 11.07.2018 WHEREIN CBDT HAS DIRECTED AS UNDER: 3 . HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED I N CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: SL. NO. APPEALS/SLPS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 20,00,000/- 2. BEFORE HIGH COURT 50,00,000/- 3. BEFORE SUPREME COURT 1,00,00,000/- 2 ITA NO. 2489/KOL/2018 BAJORIA ENTERTAINMENT PVT. LTD. AY 2014-15 IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILIN G 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 CHARGEABL E HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE I SSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'D ISPUTED ISSUES). FURTHER, 'TAX EFFECT' SHALL BE TAX INCLUDING APPLICABLE SURCHARGE AND CES S. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUT E, 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 NOTIONAL TAX ON DISPUTED ADDITIONS. I N CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 3. IN PARA-13 OF THE SAID CIRCULAR IT HAS FURTHER BEEN CLARIFIED THAT THE REVISED MONETARY LIMITS WILL APPLY RETROSPECTIVELY. THE RELEVANT PA RA-13 OF THE CIRCULAR READS THUS: 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL ALSO APP LY RETROSPECTIVELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/REFERENCES. PENDING A PPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. 4. IN ORDER TO BUTTRESS HIS CONTENTION HE HAS FIL ED A COMPUTATION ALONG WITH A WRITTEN SUBMISSION WHICH IS AS UNDER: DISALLOWANCE OF EXPENSES U/S. 14A OF THE INCOME-TAX ACT, 1961 (ACT) RS. 22,87,282/- ADDITION OF UNSECURED LOAN U/S. 68 OF THE ACT. RS. 41,00,000/- TOTAL AMOUNT OF DISPUTED ADDITIONS RS. 63,87,282/- NOTIONAL TAX @ 30.9% (INCLUDING APPLICABLE CESS) RS . 19,73,670/- IN THE PRESENT CASE, THE TAX EFFECT ON THE DISPUTED ADDITION IN THIS APPEAL BY THE REVENUE IS RS. 19,73,670/- WHICH IS LESS THAN RS.20,00,000/-. THOUGH THIS APPEAL HAD BEEN FILED BY THE REVENUE ON 28.11.2018 AND WAS WITHIN THE MONETARY L IMIT IN THE FORM OF TAX EFFECT FOR FILING APPEAL BEFORE TRIBUNAL, IN VIEW OF PARA-13 OF THE C IRCULAR OF CBDT, EVEN SUCH APPEAL WILL BE GOVERNED BY THE NEW MONETARY LIMITS LAID DOWN IN THE CBDT CIRCULAR NO.3/2018 REFERRED TO ABOVE. 5. IT IS A SETTLED LAW THAT THE CIRCULARS ISSUED BY CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFIRMED BY THE APEX COURT IN T HE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION LTD. REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID 3 ITA NO. 2489/KOL/2018 BAJORIA ENTERTAINMENT PVT. LTD. AY 2014-15 DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAI NS IN OPERATION THEN THE REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. 5.1. IN THE EVENT, THE REVENUE FINDS AT A LATER POI NT OF TIME THAT THE TAX EFFECT IN THE APPEAL IS MORE THAN RS.20 LAKHS OR DESPITE LOW TAX EFFECT THE APPEAL OF THE REVENUE IS MAINTAINABLE, THE REVENUE IS AT LIBERTY TO MOVE THIS TRIBUNAL FO R RECALLING OF THIS ORDER. 6. IN VIEW OF THE ABOVE, WE HOLD THAT THE APPEAL FI LED BY THE DEPARTMENT, AGAINST THE IMPUGNED ORDER OF THE LD. CIT(A), IS CONTRARY TO TH E POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEAL FILED BY THE DEPARTMENT IS DISMI SSED IN LIMINE . 7. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JUNE, 2019 SD/- SD/- (DR. A. L. SAINI) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH JUNE, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 APPELLANT DCIT, CIRCLE-14(1), KOLKATA. 2 RESPONDENT M/S. BAJORIA ENTERTAINMENT PVT. LTD., 3 RD FLOOR, BLOCK-5, CLUB TOWN ENCLAVE, 20, CHINAR PARK, ATHGHORA, RAGHUNATHPUR, K OLKATA-700 157. 3 4 5 CIT(A)-5, KOLKATA (SENT THROUGH E-MAIL) CIT , KOLKATA. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR