ITO, New Delhi V. Shri Jaibhagwan, Palwal

ITA 2563/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7810 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-05-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 28-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Revised return
• Section: 54B; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER ITA NO. 2563/DEL/2012 ASSESSMENT YEAR: 2002-03 INCOME TAX OFFICER, VS. SHRI JAIBHAGWAN, WARD-II(3), BLOCK-B, L/H OF LATE SH. DHANI RAM, NEW CGO COMPLEX, PATLI GATE, NEAR DYANAND NH-4, FARIDABAD SCHOOL, PALWAL (PAN: AFRPR2254M) APPELLANT) (RESPONDENT) APPELLANT BY : MS. RASHMITA JHA, SR. D R RESPONDENT BY : SH. SOMIL AGGARWAL, ADV. DATE OF HEARING : 05-05-2016 DATE OF ORDER : 05-05-2016 ORDER PER H.S. SIDHU, J.M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER DATED 09.3.2011 OF LD. CIT(A)-FARIDABAD PERTAINING TO ASS ESSMENT YEAR 2002-03 ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED ON THE FACTS AND IN LAW, IN DELETING THE ADDITION O F RS.12,49,880/- WHICH WAS MADE BY THE AO ON ALC OF INTEREST RECEIVE D BY THE ASSESSEE ON ENHANCED COMPENSATION WHICH IS TAXABLE IN THE YEAR OF RECEIPT. AS PER RATIONALE LAID DOWN BY THE HON'BLE APEX COURT IN THE JUDGMENT OF CIT VS GHANSHYAM HUF (315 ITR 1), THE I NTEREST ON ENHANCED COMPENSATION FALLS UNDER SECTION 28 OF LA ACT AND IS TAXABLE IN THE YEAR OF RECEIPT.' 2. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED ON THE FACTS AND IN LAW, IN OBSERVING THAT THE INTE REST RECEIVED BY THE ASSESSEE FALLS UNDER SECTION 34 OF LA ACT. THIS OBS ERVATION OF THE LD. ITA NO.2563/DEL/2012 2 CIT(A) IS BASED ON WRONG FOOTING/FACTS AND IS CONTR ARY TO THE FACTS ON RECORD SUCH AS; (I) THAT THE INTEREST HAS BEEN AWARDED UNDER SECT ION 28 OF THE LAND ACQUISITION ACT, WHILE DECIDING REFERENCE PETI TIONS BY THE COURT. (II) THAT AS EVIDENT FROM THE STATEMENT OF ENHANC ED COMPENSATION WHICH IS BASE OF THE LD. CIT(A)'S OBSERVATION, THE ORIGINAL AWARD/LAC RATE WAS RS.2.35 LAKH PER ACRE AND THE EN HANCED COMPENSATION (AS PER COURT DECISION) HAS BEEN CALCU LATED @ RS.9.24 LAKH (APPROX.) PER ACRE. (III) THAT THIS CONCLUSION FINDS FURTHER SUPPORT. FROM THE FACTS THAT WHILE CALCULATING THE ENHANCED COMPENSATION, THE AM OUNT PAID AS PER ORIGINAL AWARD/COMPENSATION HAVE BEEN DEDUCTED WHICH MEANS THAT THE ORIGINAL AWARD/COMPENSATION STANDS ALREADY PAID. (IV) THAT IN NUTSHELL, THE INTEREST CALCULATED IN LAO'S STATEMENT (THE PART OF WHICH WAS RECEIVED BY THE ASSESSEE DURING T HE RELEVANT PERIOD) IS INTEREST PAYMENT UNDER SECTION 28 OF THE LA ACT AND IS TAXABLE IN THE YEAR OF RECEIPT.' 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ALLOWING THE DEDUCTION U/S. 54B FIRST TIME IN APPEAL WHICH WAS NOT CLAIMED BY THE ASSESSEE IN ASS ESSMENT. AS RATIONAL LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. VS. CIT 284 ITR 323 THE CLAIM OF DEDUCTION U/S. 54B, WHICH IS MADE BY THE ASSESSEE FIRST TIME IN AP PEAL, WITHOUT FILING ANY REVISED RETURN BEFORE THE AO, IS NOT ADM ISSIBLE AT ALL. 4. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEAR ING OF THE APPEAL. ITA NO.2563/DEL/2012 3 2. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSE SSEE HAS FILED A COMPUTATION OF TAX EFFECT IN THE CASE OF THE ASSESS EE AND STATED THAT THE TAX INVOLVED IN THE PRESENT APPEAL IS RS. 7,51,152/- WH ICH IS BELOW THE TAXABLE LIMIT OF RS. 10 LACS, AS PRESCRIBED BY THE CBDT IN FILING THE APPEAL BEFORE THE TRIBUNAL BY THE DEPARTMENT. HENCE, HE REQUESTED THA T THE APPEAL OF THE REVENUE MAY BE DISMISSED ON THIS ACCOUNT. 3. LD. DR DID NOT CONTROVERT THE CONTENTION RAIS ED BY THE LD. COUNSEL OF THE ASSESSEE, BUT SHE RELIED UPON THE ORDER OF THE AO. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, WE FIND FORCE IN THE ASSESSEES COUNSEL CONTENTION THAT THE TAX EFFE CT IN THE REVENUES APPEAL IS LESS THAN RS.10,00,000/-, THEREFORE, THE DEPARTMENT S APPEAL IS NOT MAINTAINABLE, IN VIEW OF THE CIRCULAR NO. 21/2015 DATED 10 TH DECEMBER, 2015 ISSUED VIDE F.NO. 279/MISC. 142/2007-ITJ (PT.) BY T HE CBDT. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PARA NOS. 3 & 10 OF THE A FORESAID CBDTS CIRCULAR ARE REPRODUCED AS UNDER:- 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY L IMITS GIVEN HEREUNDER: S NO APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETA RY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTI ONS ON ITA NO.2563/DEL/2012 4 THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEA L WAS FILED. 5. IT IS NOT IN DISPUTE THAT THE BOARDS INSTRUCTIO N OR DIRECTIONS ISSUED TO THE INCOME-TAX AUTHORITIES ARE BINDING ON THOSE AUTHORI TIES, THEREFORE, THE DEPARTMENT SHOULD HAVE WITHDRAWN/ NOT PRESSED THE P RESENT APPEAL, IN VIEW OF THE AFORESAID INSTRUCTIONS SINCE THE TAX EFFECT IN THE INSTANT APPEAL IS LESS THAN THE AMOUNT OF RS. 10 LACS, PRESCRIBED IN THE ABOVE SAID CBDTS INSTRUCTIONS. 6. KEEPING IN VIEW THE CBDT INSTRUCTION NO. 21/2015 DATED 10 TH DECEMBER, 2015, WE ARE OF THE VIEW THAT THE REVENUE SHOULD HA VE WITHDRAWN/ NOT PRESSED THE INSTANT APPEAL BEFORE THE TRIBUNAL. WE ARE ALS O OF THE VIEW THAT THE SAID INSTRUCTIONS ARE APPLICABLE FOR THE PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN TRIBUNAL. ACCORDINGLY, THE REVENUES APPEAL IS DISMISSED. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE STAN DS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/05/2016. SD/- SD/- (J.S. REDDY) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED: 05/05/2016 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR ITA NO.2563/DEL/2012 5