ACIT, New Delhi V. Sh. N.K. Pahuja, New Delhi

ITA 2517/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86727 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 05-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJHA
• Assessee Lawyers: DINESH CHANDRA
• Keywords: Capital asset; Tax effect; Revised return
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE SH. N. K. SAINI , AM AND SH. A. T VARKEY , JM ITA NO. 2517/DEL/2012 : ASSTT. YEAR : 2008 - 09 ACIT, CIRCLE - 48(1), NEW DELHI VS SH. N. K. PAHUJA, B - 13, IFS APARTMENTS, MAYUR VIHAR, PHASE - I, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AALPP2516R ASSESSEE BY : SH. DINESH CHANDRA, ADV. REVENUE BY : SH. P. DAM KANUNJHA, SR . DR DATE OF HEARING : 0 5 .02.2015 DATE O F PRONOUNCEMENT : 05 .02.2015 ORDER PER N.K . SAINI , A.M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER DATED 05.03.2012 OF THE LD. CIT(A) - XXX , NEW DELHI . 2. THE GROUNDS RAISED IN THE APPEAL OF THE DEPARTME NT READ AS UNDER: - 1. DELETING THE ADDITION OF RS. 13,00,000/ - AS RIGHTLY MADE BY THE AO IGNORING THAT PROVISIONS OF SECTION 48 WHEREIN IT IS CLEARLY MENTIONED THAT THE INCOME CHARGEABLE UNDER THE HEAD OF CAPITAL GAIN SHALL BE COMPUTED BY DEDUCTION FRO M THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCURED AS A RESULT OF THE TRANSFER OF CAPITAL ASSET . ITA NO. 2517/DEL/2012 N. K. PAHUJA 2 2. TREATING THE PART OF SALE CONSIDERATION OF RS. 13,00,000/ - RECEIVED BY THE SHRI SUDESH PAHUJA (RELATIVE OF THE ASSESSEE) AS REIMBURSEMENT OF EXPENSES INCURRED BY SHRI SUDESH PAHUJA (RELATIVE OF THE ASSESSEE) AS COST OF IMPROVEMENT. 3. DELETING THE ADDITION OF RS. 13,00,000/ - AND ALLOWING DEDUCTION OF RS. 13,00,000/ - U/S 48(II) AS PART OF COST OF IMPROVEMENT U/S 55(1)(B) IGNORING THAT NO SUCH EXPENSES W ERE CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME. 4. DELETING THE ADDITION OF RS. 13,00,000/ - AND ALLOWING DEDUCTION OF RS. 13,00,000/ - U/S 48(II) AS PART OF COST OF IMPROVEMENT U/S 55(1) IGNORING THAT THE DECISION OF SUPREME COURT IN THE CASE OF GOETZ LTD. VS CIT 2006 284 ITR 323 (SC) WHEREIN IT WAS HELD THAT, IF THE ASSESSEE WANTS TO MAKE A CLAIM HE MUST PREFER THE CLAIM IN THE RETURN OF INCOME OR IN A REVISED RETURN. 5. ALLOWING THE AMOUNT PAID BY SHRI SUDESH PAHUJA (RELATIVE OF THE ASSESSEE) DIRECT LY FOR CONSTRUCTION OF INTERIORS AND MAKING THE FLAT HABITABLE ON BEHALF OF THE ASSESSEE AS DEDUCTION OF RS. 13,00,000/ - U/S 48(II) AS PART OF COST OF IMPROVEMENT U/S 55(1)(B) IGNORING THAT SUCH KIND OF PAYMENTS SHOULD BE TREATED AS LOAN TAKEN BY THE ASSES SEE NOT AS COST OF IMPROVEMENT U/S 55(1)(B). 6. DELETING THE ADDITION OF RS. 13,00,000/ - AS RIGHTLY MADE BY THE AO IGNORING THAT THE PURCHASE/SALE DEED WAS EXECUTED ONLY IN THE NAME OF THE ASSESSEE. 7. DELETING THE ADDITION OF RS. 13,00,000/ - AS RIGHTLY MADE BY THE AO WITHOUT CALLING A REMAND REPORT GIVING AN OPPORTUNITY TO AO, TO EXAMINE THE EVIDENCES/DOCUMENTS IN SUPPORT OF CLAIM OF EXPENSES INCURRED BY THE SHRI SUDESH PAHUJA (RELATIVE OF THE ASSESSEE) AS A COST OF IMPROVEMENT ON BEHALF OF THE ASSESSEE. ITA NO. 2517/DEL/2012 N. K. PAHUJA 3 3. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS.4 ,00,000/ - , THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED THIS APPEAL IN VIEW OF THE CIRCULAR ISSUED BY THE CBDT AND THE PROVISIONS CONTAINED IN SECTION 268A OF THE INCOME TAX ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT). 4. ON THE OTHER HAND, THE LD. D.R., ALTHOUGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THIS FACT THAT TAX EFFECT IN THIS APPEAL IS LESS THAN RS.4 ,00,000/ - . 5 . AFTER CONSIDERING THE SUBMISSIONS OF THE LD. D.R. AND THE MATERIAL ON RECORD, IT IS NOTICED THAT SECTION 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETRO SPECTIVE EFFECT FROM 01/04/99. THE PROVISIONS CONTAINED IN SECTION 268A READ AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME - TAX AUTHORITIES, FIXING SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PURPOSE OF REGULATING FILIN G OF APPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME - TAX AUTHORITY UNDER THE PROVISIONS OF THIS CHAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1), AN INCOME - TAX AUTHORITY HAS NOT FILED ANY APPEAL OR APPLICATION FOR REFERENCE ON ANY ISSUE IN THE CASE OF AN ASSESSEE ITA NO. 2517/DEL/2012 N. K. PAHUJA 4 FOR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORITY FROM FILING AN APPEAL OR APPLICATION FOR REFERENCE ON THE SAME ISSUE IN THE CASE OF ( A ) THE SAME ASSESSEE FOR ANY OTHER ASSES SMENT YEAR; OR ( B ) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR. (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION FOR REFERENCE HAS BEEN FILED BY AN INCOME - TAX AUTHORITY PURSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER S UB - SECTION (1), IT SHALL NOT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME - TAX AUTHORITY HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUE BY NOT FILING AN APPEAL OR APPLICATION FOR REFERENCE IN ANY CASE . (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1) AND THE CIRCUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NOT F ILED IN RESPECT OF ANY CASE. (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH HAS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR FILING AN APPEAL OR APPLICATION FOR REFERENCE SHALL BE DEEMED TO HAVE BEEN ISSUED UNDER SUB - SECTION (1) AND THE PROVISIONS OF SUB - SECTIONS (2), (3) AND (4) SHALL APPLY ACCORDINGLY. ] 6 . IT IS NOT IN DISPUTE THAT THE BOARD S INSTRUCTION OR DIRECTIONS ISSUED TO THE INCOME - TAX AUTHORITIES ARE BINDING ON THOSE AUTHORITIES, THEREFORE, THE DEPARTMENT ITA NO. 2517/DEL/2012 N. K. PAHUJA 5 OUGHT NOT TO HAVE FILE D THE APPEAL IN VIEW OF THE ABOVE SAID PROVISIONS MENTIONED IN SECTION 268A OF THE ACT SINCE THE TAX EFFECT IN THE INSTANT CASE IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FILING THE APPEAL. 7 . IT IS NOTICED THAT THE CBDT HAS ISSUED INSTRUCTION NO. 5 OF 20 14 DATED 1 0.0 7.2014 , BY WHICH THE CBDT HAS REV ISED THE MONETARY LIMIT TO RS. 4 ,00,000/ - FOR FILING THE APPEAL BEFORE THE TRIBUNAL. 8 . KEEPING IN VIEW THE CBDT INSTRUCTION NO. 5 OF 201 4 DATED 10 .0 7 .201 4 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, WE ARE OF THE VIEW THAT THE REVENUE SHOULD NOT HAVE FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL. WHILE TAKING SUCH A VIEW, WE ARE FORTIFIED BY THE FOLLOWING DECISIONS OF HON'BLE PUNJAB & HARYANA HIGH COURT : - 1. CIT V OSCAR LABORATORIES P. LTD (2010) 324 ITR 115 (P&H) 2. CIT V ABINASH GUPTA (2010) 327 ITR 619 (P&H) 3. CIT V VARINDERA CONSTRUCTION CO. (2011) 331 ITR 449 (P&H)(FB) 9 . SIMILARLY THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT V. DELHI RACE CLUB LTD. IN ITA NO.128/2008, ORDER DATED 03.03. 2011 BY FOLLOWING THE EARLIER ORDER DATED 02.08.2010 IN ITA NO.179/1991 IN THE CASE OF CIT DELHI - III ITA NO. 2517/DEL/2012 N. K. PAHUJA 6 V. M/S. P.S. JAIN & CO. HELD THAT SUCH CIRCULAR WOULD ALSO BE APPLICABLE TO PENDING CASES. 10 . FROM THE RATIO LAID DOWN BY THE HON BLE DELHI HIGH COURT, IT IS CLEAR THAT THE INSTRUCTIONS ISSUED IN THE CIRCULARS BY CBDT ARE APPLICABLE FOR PENDING CASES ALSO. THEREFORE, BY KEEPING IN VIEW THE RATIO LAID DOWN IN THE AFORESAID REFERRED TO CASES, WE ARE OF THE CONSIDERED VIEW THAT INSTRUCTION NO. 5 /1 4 DATED 1 0 .0 7 .201 4 ISSUED BY THE CBDT ARE APPLICABLE FOR THE PENDING CASES ALSO AND IN THE SAID INSTRUCTIONS, MONETARY TAX LIMIT FOR NOT FILING THE APPEAL BEFORE THE ITAT IS RS. 4 .00 LAKH S. 11 . IN VIEW OF THE ABOVE, WITHOUT GOING INTO MERITS OF THE CASE, WE DISMISS THE APPEAL FILED BY THE REVENUE. 1 2 . IN THE RESULT, APPEAL OF THE REVENUE STAND DISMISSED . ( ORDER PRON OUNCED IN THE COURT ON 05.02.2015) . SD/ - SD/ - ( A. T. VARKEY ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 05 /02/ 2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR