DCIT, New Delhi V. M/s. Magnum International Trading Company Pvt. Ltd., New Delhi

ITA 2510/DEL/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9599 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 26-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 37(1); 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: E: NEW DELHI) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT ME MBER ITA NO:- 2510/DEL/2017 (ASSESSMENT YEAR: 2011-12) THE DCIT, CIRCLE 16(1), NEW DELHI VS M/S MAGNUM INTERNATIONAL TRADING COMPANY PVT. LTD., 48/12, COMMERCIAL CENTRE, MALCHA MARG, CHANAKYAPURI, NEW DELHI PAN-AAACM8173B APPELLANT RESPONDENT APPELLANT BY SHRI. RAKHI VIMAL , SR. DR RESPONDENT BY SHRI. ANIL BHALLA, C . A . ORDER PER ANADEE NATH MISSHRA, AM [A]. THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE ORDER DATED 23.02.2017 PASSED BY LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-6, NEW DELHI [IN SHORT, LD.CIT(A)] P ERTAINING TO ASSESSMENT YEAR 2011-12. IN THIS APPEAL, THE TAX E FFECT IS LESS THAN THE MONETARY LIMIT FIXED BY THE CENTRAL BOARD OF DI RECT TAXES (IN SHORT CBDT) IN ITS CIRCULAR NO.17/2009 DATED 08.0 8.2019. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CAS E, LD. CIT(A) IS LEGALLY JUSTIFIED IN DELETING THE DISALLOWANCE OF C LAIM OF DEDUCTION OF EXPENDITURE OF RS. 1,26,92,623/- U/S 37(1) OF TH E INCOME TAX ACT, 1961 (THE ACT) BY IGNORING A FINDING OF FACTS RECORDED BY THE ITA NO: - 2510/DEL/2017 PAGE | 2 ASSESSING OFFICER (THE AO) THAT THE ASSESSEE HAD NO T RECOGNIZED REVENUE EARNED BY IT FROM ITS CUSTOMER ON SALE OF R EAL ESTATE DURING YEAR UNDER CONSIDERATION ON THE GROUND THAT IT WAS FOLLOWING PERCENTAGE COMPLETION METHOD, ACCORDINGLY , THE ASSESSEE WAS NOT ENTITLED CLAIM DEDUCTION OF EXPENDITURE OF REAL ESTATE BUSINESS? 2. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CAS E, LD. CIT(A) IS LEGALLY JUSTIFIED IN DELETING THE DISALLOWANCE OF C LAIM OF DEDUCTION OF EXPENDITURE OF RS. 1,26,92,623/- U/S 37(1) OF TH E ACT BY IGNORING A FACT THAT THE ASSESSEE HAD NOT EVEN DISC LOSED BASIS OF CAPITALIZING A PART OF TOTAL EXPENDITURE AND CLAIMI NG DEDUCTION OF ANOTHER PART OF TOTAL EXPENDITURE UNDER PERCENTAGE COMPLETION METHOD FOLLOWED BY THE ASSESSEE? 3. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CA SE, LD. CIT(A) IS LEGALLY JUSTIFIED IN DELETING THE DISALLOWANCE OF C LAIM OF DEDUCTION OF EXPENDITURE OF RS. 1,26,92,623/- U/S 37(1) OF THE A CT BY ACCEPTING ADDITIONAL EVIDENCE EVEN WHEN THE ASSESSEE HAD NOT FULFILLED THE CONDITION AS LAID DOWN UNDER RULE 46A OF THE INCOME TAX RULE, 1962 (THE RULE) AND WITHOUT AFFORDING OPPORTUNITY OF BEI NG HEARD TO THE ASSESSING OFFICER (THE AO)? [B]. AT THE OUTSET, IT WAS BROUGHT TO THE NOTICE B Y LEARNED COUNSEL FOR THE ASSESSEE, AT THE TIME OF HEARING THAT TAX E FFECT IN THIS APPEAL IS BELOW RS. 50,00,000./-. VIDE RECENT CBDT CIRCULA R NO.17/2019 DATED 08.08.2019 READ WITH EARLIER CBDT CIRCULAR NO . 3 OF 2018, DATED 11.07.2018, MINIMUM THRESHOLD LIMIT OF TAX EF FECT OF FILING OF APPEALS BY REVENUE IN INCOME TAX APPELLATE TRIBUNAL ('ITAT', FOR SHORT) HAS BEEN ENHANCED TO RS. 50,00,000/-. IN A S UBSEQUENT CLARIFICATION ISSUED BY CBDT VIDE F.NO. 279/MISC/M- 93/2018-ITJ, DATED 20/08/2019, IT HAS BEEN CLARIFIED BY CBDT THA T THE AFORESAID REVISED MONETARY LIMIT IS ALSO APPLICABLE TO ALL PE NDING APPEALS IN ITAT. THEREFORE, IN VIEW OF THE FOREGOING, WE ARE O F THE VIEW THAT THIS APPEAL FILED BY REVENUE IS NOT MAINTAINABLE. THE LE ARNED DEPARTMENTAL REPRESENTATIVE ALSO DID NOT PRESS THE APPEAL. ITA NO: - 2510/DEL/2017 PAGE | 3 ACCORDINGLY, THIS APPEAL IS DISMISSED BEING NOT PRE SSED, AND ALSO NOT MAINTAINABLE, HAVING REGARD TO AFORESAID CBDT C IRCULAR NO. 17/2019 DATED 08.08.2019 READ WITH AFORESAID CBDT C IRCULAR NO. 3 OF 2018 IN THE LIGHT OF AFORESAID CLARIFICATION D ATED 20/08/2019. [C]. BEFORE LEAVING, WE CLARIFY THAT REVENUE WILL B E AT LIBERTY TO APPROACH INCOME TAX APPELLATE TRIBUNAL U/S 254(2) O F INCOME TAX ACT, 1961 SEEKING RECALL OF THIS ORDER AND, FOR RESTORATION OF THE APPEAL IF IT IS FOUND THAT THIS APPEAL OF REVENUE IS NOT COVERED BY AFORESAID CBDT CIRCULARS DATED 08.08.2019 AND 11.07.2018. [D]. IN THE RESULT, THE APPEAL BY REVENUE IS DISMI SSED. OUR DECISION WAS ORALLY PRONOUNCED IN THE OPEN COURT AF TER CONCLUSION OF HEARING ON THE DATE OF HEARING. NOW, THIS WRITTE N ORDER IS PRONOUNCED IN OPEN COURT ON 01.10.2019. SD/- SD/- (AMIT SHUKLA) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED: 01.10.2019 SH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO: - 2510/DEL/2017 PAGE | 4 ITAT NEW DELHI DRAFT DICTATED 30.09.2019 DRAFT PLACED BEFORE AUTHOR APPROVED DRAFT COMES TO THE SR.PS/PS ORDER SIGNED AND PRONOUNCED ON FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER. DATE OF UPLOADING ON THE WEBSITE 01.10.2019