DCIT, New Delhi V. M/s World Air (P) Ltd., New Delhi

ITA 2555/DEL/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7005 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 28-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 16-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA SENIOR
• Keywords: Question of law; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I : NEW DELHI) SMT. DIVA SINGH, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2555/DEL./2011 (ASSESSMENT YEAR : 2007-08) DCIT, CIRCLE 18 (1), VS. M/S. WORLD AIR (P) LIMIT ED, NEW DELHI. 315, INDRAPRASTHA BUILDING, 21, BARAKHAMBA ROAD, CONNAUGHT PLACE, NEW DELHI-1. (PAN : AAACW1220B) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI A.K. MONGA, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDE R OF CIT (APPEALS)-XXI, NEW DELHI DATED 25.02.2011 FOR THE A SSESSMENT YEAR 2007- 08. THE GROUND OF APPEAL RAISED IS REPRODUCED AS UNDER:- THE LD. CI(A) HAS ERRED ON FACTS AND IN LAW IN DEL ETING THE DISALLOWANCE OF RS.7,89,300/- BEING EXCESS PAYMENT MADE OVER AND ABOVE THE AMOUNT STIPULATED IN THE AGREEMENT WI TH M/S VAZ FORWARDING BY NOT DECIDING THE CASE ON MERITS AND B Y IGNORING THAT: (I) THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNTS AND SUPPORTING BILLS AND VOUCHERS DURING THE ASSESSMEN T PROCEEDINGS DESPITE ADEQUATE OPPORTUNITY. ITA NO.2555/DEL./2011 2 (II) IN THE ABSENCE OF BOOKS OF ACCOUNTS, BILLS AN D VOUCHERS LIT WAS NOT POSSIBLE TO VERIFY THE RELATABILITY OF TH E EXCESS PAYMENT TO THE BUSINESS NEEDS OF THE ASSESSEE AND THEREFORE THE DISALLOWANCE WAS CORRECTLY MADE BY T HE A.O. (III) NO SATISFACTORY EXPLANATION FOR THE EXCESS P AYMENT MADE OVER AND ABOVE THE AMOUNT STIPULATED IN THE AGREEM ENT WAS FURNISHED BY THE ASSESSEE DURING THE ASSESSMEN T PROCEEDINGS DESPITE ADEQUATE OPPORTUNITY.' 2. THE LD. D.R CONCEDED THAT THE TAX EFFECT IN THI S CASE IS LESS THAN RS. 3.00 LAKH, THEREFORE, AS PER THE INSTRUCTION NO. 3/2011 DATED 09.02.2011 THE REVENUE IS NOT PERMITTED TO FILE APPEAL BEFORE T HE TRIBUNAL IF THE TAX EFFECT IS LESS THAN RS. 3.00 LAKH. HE PLACED RELIANCE O N THE DECISION OF HONBLE SUPREME COURT DATED 25.03.2011 IN ITA NOS. 3 TO 5/2010. ON THE OTHER HAND, LD. DR FOR THE REVENUE SUBMITTED THAT INSTRUCTION NO. 3/2011 IS NOT APPLICABLE FOR THE APPEALS FILED PRIOR TO ISSUE OF THE SAID INSTRUCTIONS. IT IS ALSO SUBMITTED THAT THE DECISION OF FULL BENCH O F PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. VIRENDRA CONSTRUCT ION CO., 239 CTR 1, THAT REVISED MONETARY LIMITS ARE NOT APPLICABLE TO TH E PENDING APPEALS, IS IN FAVOUR OF THE REVENUE. 3. WE HAVE HEARD LEARNED DR AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. INSTRUCTION NO. 3/2011 DATED 09.02.2011 HAS REVISED THE MONETARY LIMIT FOR FILING THE APPEAL BY THE DEPARTMENT BEF ORE INCOME-TAX APPELLATE TRIBUNAL, HONBLE HIGH COURTS AND HONBLE SUPRE ME COURT. MONETARY LIMIT FOR FILING THE APPEAL BEFORE THE TRIBUNAL IS RS. 3.00 LAKH; BEFORE HONBLE ITA NO.2555/DEL./2011 3 HIGH COURT RS. 10.00 LAKH AND BEFORE HONBLE SUPR EME COURT RS. 25.00 LAKH. HONBLE HIGH COURT IN THEIR ORDER DATED 2 5.03.2011 REFERRED TO ABOVE HAS HELD AS UNDER:- IT IS STATED THAT THE TAX IMPACT IN THE PRESENT CASES IS LESS THAN RS. 10.00 LAKHS. THE DEPARTMENT HAS RECENTLY IS SUED AN INSTRUCTION BEARING NO. 3/2011 DATED 09.02.2011, WHICH IS IDENTICAL TO ITS EARLIER INSTRUCTION BEARING N O. 5/2008 DATED 15.05.2008 EXCEPT THAT IN SO FAR AS THE HIGH CO URT IS CONCERNED, THE MONETARY LIMIT IN RESPECT OF APPEA LS WHERE THE QUESTIONS OF LAW RAISED NEED NOT TO BE ANSWERE D, HAS BEEN RAISED FROM RS. 4.00 LAKHS TO RS. 10.00 LAKHS. T HE DIVISION BENCH OF THIS COURT IN ITA NO. 89/1999 DECIDED O N 28.01.2011 HAS ALREADY HELD THAT THE INSTRUCTIO N BEARING NO. 5/2008 DATED 15.05.2008 WOULD APPLY EVEN TO THE OLD PENDING REFERENCES AND APPEALS. THIS PRINCIPLE WOULD TH US NATURALLY EQUALLY APPLY TO THE INSTANT INSTRUCTION BEARING NO.3/2011 DATED 09.02.2011, AS WELL. THE TAX EFFECT BEING LESS THAN RS. 10.00 LAKHS, THE QUESTION OF LAW DOES NOT REQUIRE TO BE ANSWERED. THE APPEALS ARE DISPOSED OF ACCORDING LY. 3.1 HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DELHI RACE CLUB LTD. IN ITA NO. 128/2008 DATED 03.03.2011 WHEREIN IT HAS BEEN HELD AS UNDER:- THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS RS. 4,65,860/-. AS PER THE RECENT GUIDELINES OF THE CBDT, APPEA L IN THOSE CASES WHERE THE TAX EFFECT IS LESS THAN RS. 10.0 0 LAKHS, ARE NOT TO BE ENTERTAINED. THIS COURT IN THE CASE OF CIT, DELHI-III VS. M/S P .S. JAIN & CO., BEING ITA NO. 179/1991 DECIDED ON 2 ND AUGUST, 2010 HAS TAKEN A VIEW THAT SUCH CIRCULAR WOULD ALSO APPLY TO PENDING CASES. ITA NO.2555/DEL./2011 4 3.2 IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT, WHICH IS THE JURISDICTIONAL HIGH COURT IN THIS CASE, IT IS HEL D THAT INSTRUCTION NO. 3/2011 DATED 09.02.2011 WILL APPLY TO ALL PENDING APPE ALS. RESPECTFULLY FOLLOWING THE PRECEDENT, IT IS HELD THAT THE AP PEAL IS NOT MAINTAINABLE IN THE INSTANT CASE AS THE TAX EFFECT IS LESS TH AN RS. 3.00 LAKHS. ACCORDINGLY, IT IS HELD THAT APPEAL FILED BY THE REVENUE IS NO T MAINTAINABLE. 4. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT IS DISMISSED IN LIMINE WITHOUT GOING INTO THE MERITS. ORDER PRONOUNCED IN OPEN COURT ON THIS 28 TH DAY OF SEPTEMBER, 2011 AFTER THE CONCLUSION OF THE HEARING. SD/- SD/- (DIVA SINGH) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 28 TH DAY OF SEPTEMBER, 2011/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.