DCIT-CENTRAL-CIRCLE-2(2), Nagpur V. PANNALAL G. SHAHU, Nagpur

ITA 256/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1687 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2014
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: K P DEVANI
• Keywords: Capital asset; Question of law; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 256/NAG./2014 ( ASSESSMENT YEAR : 200910 ) DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE2(2), NAGPUR APPELLANT V/S PANNALAL G. SHAHU PLOT NO.83, NETAJI NAGAR OLD PARDI NAKA, NAGPUR PAN AHFPS7718D RESPONDENT REVENUE BY : SHRI NARENDRA KANE ASSESSEE BY : SHRI K.P. DEVANI DATE OF HEARING 25.08.2015 DATE OF ORDER 28.08 .2015 O R D E R PER MUKUL K. SHRAWAT, J.M. THIS APPEAL FILED BY THE REVENUE IS EMANATING FROM TH E IMPUGNED ORDER DATED 3 RD FEBRUARY 2014, PASSED BY THE LEARNED COMMISSIONER (APPEALS)III, NAGPUR, FOR THE ASSESSM ENT YEAR 2009 10, ON THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CLT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 10 LAKHS ON ACCOUNT OF FORFEITURE OF ADVANCE AMOUNT RECEIVED BY THE ASSESSEE ON EXECUTIO N OF PANNALAL G. SHAHU 2 AGREEMENT TO SELL AGRICULTURAL LAND, ON THE GROUND THAT ONCE THE ASSESSING OFFICER HAS ACCEPTED THE GENUINENESS OF T HE TRANSACTION AS WELL AS THE COMPUTATION OF THE CAPIT AL GAIN, HE HAS NO AUTHORITY TO TREAT THE FORFEITED ADVANCE AS INCO ME FROM OTHER SOURCES? 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CLT(A) HAS ERRED IN NOT APPRECIATING THE FA CT THAT THE ASSESSING OFFICER HAS CORRECTLY ASSESSED THE AMOUNT OF FORFEITED ADVANCE UNDER THE HEAD 'INCOME FROM OTHER SOURCES', AS THE ASSET UNDER CONSIDERATION IS NOT A CAPITAL ASSET, E VEN ACCORDING TO THE SUBMISSIONS OF THE ASSESSEE? 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CLT(A) HAS ERRED IN NOT APPRECIATING THE FA CT THAT THE ASSESSING OFFICER HAD PROPERLY ANALYSED THE FACTS O F THE CASE TO ARRIVE AT THE CONCLUSION THAT THE ASSESSEE IS NOT E NTITLED TO INVOKE THE PROVISIONS OF SECTION 51 OF THE INCOME-TAX ACT, 1961? 2. BOTH THE PARTIES ADMITTED BEFORE US THAT THE TAX EFFECT O N THE DISPUTED ISSUES IS LESS THAN ` 4,00,000. IN VIEW OF CBDT INSTRUCTION NO.5/2014 (F.NO.279/MISC.142/2007-ITJ(PT) DATED 10 TH JULY 2014, THE REVENUE CANNOT FILE ANY APPEAL BEFORE THE TRIBUNAL, W HERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMIT OF RS. 4,00, 000/- UNLESS THE CASE FALLS IN THE EXCEPTIONS. IN THIS REGARD, THE H ONBLE BOMBAY HIGH COURT TIME AND AGAIN HELD THAT THE INSTRUCTIONS / CIRC ULARS PRESCRIBING MONETARY LIMIT FOR FILING OF THE APPEAL WILL HAVE RETR OSPECTIVE EFFECT AND WOULD BE APPLICABLE ON PENDING APPEAL ALSO. 2. HOWEVER, THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S MADHUKAR K. INAMDAR (HUF), [2009] 318 ITR 149 (BOM. ) HAS HELD THAT SUCH CIRCULARS ARE APPLICABLE ON PENDING APPEALS AL SO. THE RELEVANT OBSERVATIONS ARE AS UNDER: THE CIRCULAR DATED MAY 15, 2008 IN GENERAL AND PAR AGRAPH (5) THEREOF IN PARTICULAR LAY DOWN THAT EVEN IF THE SAM E ISSUE, IN PANNALAL G. SHAHU 3 RESPECT OF THE SAME ASSESSEE, FOR OTHER ASSESSMENT YEARS IS INVOLVED, THE DEPARTMENT SHOULD NOT FILE APPEAL, IF THE TAX EFFECT IS LESS THAN ` 4 LAKHS. IN OTHER WORDS, EVEN IF THE QUESTION OF L AW IS OF RECURRING NATURE, THE REVENUE IS NOT EXPECTED TO FILE APPEALS IN SUCH CASES, IF THE TAX IMPACT IS LESS TH AN THE MONETARY LIMIT FIXED BY THE CENTRAL BOARD OF DIRECT TAXES. THE BOARD HAS ALSO ISSUED A CIRCULAR ON JUNE 5, 2007, D IRECTING THE DEPARTMENT TO EXAMINE ALL APPEALS PENDING BEFORE TH E COURT ON A CASE TO CASE BASIS WITH FURTHER DIRECTION TO WITH DRAW CASES WHEREIN THE CRITERIA OF MONETARY LIMITS AS PER THE PREVAILING INSTRUCTION ARE NOT SATISFIED, UNLESS THE QUESTION OF LAW INVOLVED OR RAISED IN APPEAL OR REFERRED TO THE HIGH COURT F OR OPINION IS OF A RECURRING NATURE REQUIRED TO BE SETTLED BY THE HI GHER COURT. THE CIRCULAR MAKES IT CLEAR THAT ON THE DATE OF ISS UANCE OF THE CIRCULAR, PREVAILING INSTRUCTIONS FIXING MONETARY L IMIT WILL HOLD GOOD EVEN FOR PENDING CASES. THE CIRCULAR DATED MAY 15, 2008 WOULD BE APPLICABLE TO PENDING CASES REQUIRING THE DEPARTMENT TO WITHDRAW CASES WHEREIN THE TAX EFFECT IS LESS TH AN THE PRESCRIBED MONETARY LIMITS. THE CIRCULAR DATED MAY 15, 2008, WOULD BE APPLICABLE TO CASES PENDING BEFORE THE COU RT EITHER FOR ADMISSION OR FOR FINAL DISPOSAL AND IT IS BINDING O N THE REVENUE. 3. SIMILAR VIEW WAS TAKEN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE JUDGMENT IN CIT V/S PITHWA ENGINEERING WORKS, [20 05] 276 ITR 519 (BOM.), AND THE HON'BLE DELHI HIGH COURT IN M/S. P.S. JAIN & CO., [2011] 335 ITR 591 (DEL.). APPLYING THE PROPOSITIONS LAID DOWN IN THESE CASE LAWS TO THE FACTS OF THE PRESENT CASE, THE RE VENUES APPEAL IS NOT MAINTAINABLE AND LIABLE TO BE DISMISSED. 4. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED IN LIMINE. ORDER PRONOUNCED IN THE OPEN COURT ON 28.08.2015 SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER NAGPUR, DATED: 28.08.2015 PANNALAL G. SHAHU 4 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY A SSISTANT REGISTRAR ITAT, NAGPUR