DCIT Circle-12 (1), New Delhi V. Hotline Teletube & Component Ltd, New Delhi

ITA 2663/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9895 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-12-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 08-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SAHOTA
• Assessee Lawyers: S K JAIN
• Keywords: Gift; Question of law; Block assessment; Tax effect
• Section: 80HHC; 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER & SHRI K.D. RANJAN, ACCOUNTANT MEMBER ITA NO. 2663/DEL/2008 ASSESSMENT YEARS : 2004-05 DCIT, VS. M/S HOTLINE TELETUBE & COMPONENT LTD CIRCLE 12(1), 52-A, OKHLA INDL. ESTATE, PH. III, NEW DELHI. NEW DELHI 110 020. PAN NO. AAACH0757L (APPELLANT) (RESPONDENT) APPELLANT BY : SH. G.S. SAHOTA, DR RESPONDENT BY : SH. S.K. JAIN, CA ORDER PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF THE CIT (A) DATED 30 TH JUNE, 2008 FOR ASSESSMENT YEAR 2004- 05. GROUNDS OF APPEAL READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE IN RESPECT OF ELIGIBLE DEDUCTION U/S 80HC, IGNORING THE FACT THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE A.O. WAS CORRECT IN CONSIDERING THE INTEREST INCOME OF RS.6,66,290/- AS INCOME FROM OTHER SOURCES AS HEL D BY DELHI HIGH COURT IN THE CASE OF CIT VS. SRIRAM HOND A LTD. & OTHERS (289 ITR 475). 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT ULTIMAT ELY THERE IS DEBIT BALANCE IN INTEREST A/C THEREBY ALLOWING NETT ING OFF WITHOUT NEXUS BEING EXAMINED OF ESTABLISHED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE NETTING OFF WITHOUT APPRECIATING THE LAW ENUNCIATED BY HON'BLE SUPREME COURT IN THE CASE OF TUTICORIN ALKALI CHEMICAL & FERTILIZ ER LTD. VS. ITA NO. 2663/D/08 2 CIT (227 ITR 172) IN WHICH DECISION OF MADRAS HIGH COURT REPORTED IN 156 ITR 542 WAS APPROVED ON POINT OF NE TTING OFF. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF THE HE ARING. 2. AT THE OUTSET, THE LD. AR OF THE ASSESSEE HAS SUBMI TTED BEFORE US A COMPUTATION OF TAX ACCORDING TO WHICH TAX INVOLVE D IN THE PRESENT APPEAL IS COMPUTED AT RS.6,883/-. IT WAS SUBMITTED THAT IF THE INTEREST IS TREATED TO BE INCOME FROM OTHER SOURCES, THE DEDU CTION U/S 80HHC WILL BE EFFECTED BY A SUM OF RS.19,185/- AND, THUS, IT W AS PLEADED THAT TAX EFFECT BEING LOWER THAN THE LIMIT, THE APPEAL FILED BY THE REVENUE SHOULD BE DISMISSED. 3. THE LD. DR HAS NOT CONTROVERTED THE TAX CALCULAT ION SUBMITTED BY LD. AR . ACCORDING TO THE C.B.D.T. INSTRUCTIONS NO . 2 DATED 24.10.2005, THE DEPARTMENT SHOULD NOT HAVE FILED THE APPEAL BEF ORE THE TRIBUNAL. FOR THIS PURPOSE RELIANCE MAY BE PLACED ON THE DECISION ITAT DELHI BENCH IN CASE OF SHRI VIKRAM BHATNAGAR ITA NO. 60/D/2002, OR DER DATED 10-3- 2006. 4. IT IS ALSO SEEN THAT RECENTLY THE HONBLE JURI SDICTIONAL HIGH COURT VIDE THEIR ORDER DATED 1.8.2007 IN ITA NO. 683/2007 IN THE CASE OF CIT V. MANISH BHAMBRI HAVE UPHELD THE ORDER OF TRIBUNAL VI DE WHICH THE APPEAL FILED BY THE REVENUE WAS REFUSED TO BE ENTERTAINED BECAUSE OF LOW TAX EFFECT. THE SAID ORDER OF HONBLE JURISDICTIONAL HIGH COURT IS REPRODUCED BELOW FOR THE SAKE OF CONVENIENCE:- THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8TH AUG UST, 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH 'D' IN IT(SS) NO. 513/DEL/2003 RELEVANT FOR THE BLOCK PERI OD 1ST APRIL, 1990 TO 14TH FEBRUARY, 2001. THE QUESTION THAT AROSE BEFORE THE ASSESSING OFFICE R WAS WITH REGARD TO CERTAIN DEPOSITS IN THE BANK ACCOUNT OF T HE ASSESSEE AND SINCE THE AMOUNTS WERE NOT EXPLAINED, TAX WAS LEVIE D. IN APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE AND HELD THAT TH E EXPLANATION GIVEN BY HIM WAS ACCEPTABLE AND, IN ANY CASE, THE A SSESSEE ITA NO. 2663/D/08 3 CANNOT BE EXPECTED TO RECOLLECT EACH AND EVERY ENTR Y MADE IN THE BANK. IT MAY BE MENTIONED THAT THE AMOUNT IN DISPUTE IS R S.30,000/- FOR THE ASSESSMENT YEAR 1999-2000 AND RS.83,000/- FOR T HE ASSESSMENT YEAR 2001-2002. IT MAY ALSO BE MENTIONED THAT FOR THE ASSESSMENT YEAR 1999-2000, THE ASSESSING OFFICER HA S ALREADY ACCEPTED THE EXPLANATION WITH REGARD TO A GIFTOFRS. 60,000/-. AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS),- AN APPEAL WAS FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL. THE TRIBUNAL FOUND THAT IN VIEW OF INSTRUCTIONS ISSUED BY THE CBDT WHERE THE TAX EFFECT IS LESS THAN RS.L LAC, THE DEP ARTMENT SHOULD NOT FILE AN APPEAL BEFORE THE TRIBUNAL. IN THE PRES ENT CASE, THE TAX EFFECT IS LESS THAN RS.L LAC. UNDER THE CIRCUMSTANC ES, THE TRIBUNAL DID NOT ENTERTAIN THE APPEAL. THE REVENUE, FEELING AGGRIEVED BY THE DECISION OF T HE TRIBUNAL, HAS COME UP BEFORE US UNDER SECTION 260A OF THE INC OME TAX ACT, 1961. IT IS CONTENDED BY LEARNED COUNSEL FOR THE RE VENUE THAT THE TRIBUNAL IS A FACT FINDING AUTHORITY AND SHOULD HAV E ADJUDICATED THE MATTER ON MERITS. WE ARE OF THE VIEW THAT THE ISSUE RAISED BY THE REVENUE IS NOT AT ALL SUBSTANTIAL AND THE AMOUNT IN DISPUTE IS QUITE INSIGNIFICANT, CONSIDERING THAT THE CASE IS ONE OF A BLOCK ASSESSMENT. THERE IS NO JUSTIFICATION FOR THE INCOM E TAX DEPARTMENT TO GO ON BURDENING THE TRIBUNAL, THE COU RT WITH EVERY CASE RIGHT UP TO THE END. APART FROM BURDENING THE TRIBUNAL AND COURTS, IT ALSO CAUSES AVOIDABLE EXPENSES TO THE AS SESSEE. IT IS COMMON KNOWLEDGE THAT THE ASSESSEE HAS TO PAY FOR L EGAL FEES AND MERELY BECAUSE THE INCOME TAX DEPARTMENT HAS GO T UNLIMITED RESOURCES, THERE IS NO JUSTIFICATION THAT EVERY CAS E SHOULD BE DRAGGED ON. UNDER THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT TH E TRIBUNAL WAS JUSTIFIED IN REFUSING TO ENTERTAIN THE APPEAL BECAU SE OF THE INSIGNIFICANT AMOUNT INVOLVED IN THE MATTER. NO SUB STANTIAL QUESTION OF LAW ARISES. WE, THEREFORE, DISMISS THIS APPEAL. 5. IN VIEW OF ABOVE DISCUSSION THE APPEAL FILED BY THE REVENUE IS DISMISSED BEING UN-ADMITTED ON ACCOUNT OF LOW TAX E FFECT. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28.08.2 009. (K.D. RANJAN) (I.P. BANSAL) ACCOUNTANT MEMBER JUDI CIAL MEMBER DATED: 28.08.2009. DK ITA NO. 2663/D/08 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR