The DCIT, Circle-1, JUNAGADH V. Shri Kirtikant Chhltalal Trivedi, Una

ITA 274/RJT/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7324 (ITAT-RAJKOT)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 17-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KRISHNA PRABHAKAR
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA (JM) AND SHRI A. L. GEHL OT AM). ITA NO. 274/RJT/2011. (ASSESSMENT YEAR 2005-06) THE D.C.I.T., VS. SHRI KIRITKANT CHHOTALAL T RIVEDI, CIRCLE 1, JUNAGADH. RAM NIVAS, GIR GADHADA, U NA. PAN:AAWPT8861E. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI KRISHNA PRABHAKAR, D. R. ASSESSEE BY : WRITTEN SUBMISSION. DATE OF HEARING : 02-12-2011. DATE OF PRONOUNCEMENT : 15-12-2011. O R D E R. PER A. L. GEHLOT (A.M.) : THIS APPEAL BY THE REVENUE AGAINST THE APPELLATE ORDER OF COMMISSIONER OF INCOME TAX (APPE ALS)-XXI, AHMEDABAD DATED 01-04-2011 FOR ASSESSMENT YEAR 2005-06.. 2. THE EFFECTIVE GROUNDS RAISED IN THIS APPEAL ARE REPRODUCED AS BELOW:- (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS..2,42,466/- MADE BY THE AO ON ACCOUNT OF EXP ENSES OUT OF INCENTIVE BONUS. (2) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS..3,06,562/- MADE BY THE AO ON ACCOUNT OF ADDITIO NAL CONVEYANCE ALLOWANCE. 3. THE ASSESSEE INSTEAD OF PUTTING HIS PERSONAL PRE SENCE FILED WRITTEN SUBMISSION WHEREIN, THE ASSESSEE SUBMITTED THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS.3,00,000/-. THEREFORE, REVENUES APPEA L IS NOT MAINTAINABLE IN VIEW OF CBDT INSTRUCTION. THE REVENUE OBJECTED TO THIS SUBMISSION OF THE ASSESSEE ON THE GROUND THAT THOUGH, THE TAX EFFECT IS BELOW THE MONETARY LIMIT PRESCRIBED BY CBDT INSTRUCTION NO.3/2011 DATED 09-02-2011 BUT CASE OF THE ASSESSEE ITA 274-RJT-2011 A.Y. 2005-06. 2 COVERS UNDER THE EXCEPTIONAL CIRCUMSTANCES. AS THE ISSUE RELATED TO DEDUCTION FROM INCENTIVE BONUS IS COVERED AGAINST THE ASSESSE E BY THE LAW LAID DOWN BY THE APEX COURT BY DISMISSING SLP AGAINST THE JUDGME NT OF MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. GURUDEV SINGH JAGGI 26 7 ITR 763. 4. AFTER HEARING THE LD. D.R, WE FIND FORCE IN THE SUBMISSION OF THE REVENUE THAT THE CASE OF THE ASSESSEE IN RESPECT OF GROUND RELATED TO ALLOW ABILITY OF EXPENDITURE AGAINST INCENTIVE BONUS IS COVERED UNDE R THE EXCEPTIONAL CIRCUMSTANCES OF CBDT INSTRUCTION REGARDING NON-FIL ING OF APPEAL ON ACCOUNT OF TAX EFFECT NOT EXCEEDING RS.3,00,000/-. WE THEREF ORE, REJECTED THIS CONTENTION OF THE ASSESSEE MADE IN WRITTEN SUBMISSION THAT THE A PPEAL OF THE ASSESSEE IS COVERED BY THE CBDT INSTRUCTION ON ACCOUNT OF TAX E FFECT LESS THAN RS.3,00,000/-. 5. NOW COMING TO THE MERIT OF THE CASE. WE NOTICED THAT BEFORE THE AO, THE CASE WAS DISCUSSED WITH THE ASSESSEE INCLUDING DISC USSION REGARDING THE JUDGMENT OF MADHYA PRADSH HIGH COURT IN THE CASE OF CUT V. GURUDEV SINGH JAGGI 267 ITR 763 AGAINST WHICH SLP HAS BEEN REJECT ED. 266 ITR 104 (STATUTE). WE FURTHER OBSERVED THAT THE ASSESSEE AGREED TO WIT HDRAW HIS CLAIM OF EXPENDITURE AGAINST THE INCENTIVE BONUS. RELEVANT FINDING RECORDED BY THE AO IN PARA-6 OF HIS ORDER IS REPRODUCED AS BLOW:- 6. IN RESPONSE TO THE HOW CAUSE NOTICE SHRI BHAVYA POPAT, I.T.P., IN THE COMPANY OF SHI KIRIT C. TRIVEDI, ASSESSEE ATTENDED ON 03.12.2007 SUBMITTED THAT THE CLAIM OF DEDUCTION OF 30% OF INC ENTIVE BONUS WAS CLAIMED IN THE RETURN OF INCOME ON THE BASIS OF THE JUDGMENT OF HONBLE GUJARAT HIGH COURTS IN THE CASE OF C.I.T. V. KIRAN SHELAT AND OTHER 147 CIT 43 (GUJARAT). HOWEVER, IN VIEW OF THE SUPREME COUR T JUDGMENT HE IS WITHDRAWING HIS CLAIM OF DEDUCTION. HE IS ALSO SUB MITTED HIS WRITTEN REPLY DTD. 03.12.2007 STATING THAT HE HAS AGREED TO WITHD RAW THE DEDUCTION CLAIMED TO BUY PEACE OF MIND AND ANY FURTHER LITIGA TION AND REQUESTED NOT TO LEVY ANY PENALTY FOR CONCEALMENT AS HE HAS NOT C ONCEAL EITHER FACTS OR ANY INCOME. 6. AS REGARDS THE EXPENDITURE CLAIMED AGAINST ADDIT IONAL CONVEYANCE ALLOWANCE, THE AO DISALLOWED THE CLAIM OF THE ASSES SEE REJECTING ASSESSEES CONTENTION THAT THE ASSESSEE FILED RETURN WITHOUT H ELP OF ANY PROFESSIONAL AND HE ITA 274-RJT-2011 A.Y. 2005-06. 3 WAS NOT AWAY ABOUT THE EXACT PROVISION REGARDING AD DITIONAL CONVEYANCE ALLOWANCE. HE WAS ALSO NOT AWARE ABOUT THE CLAIM O F EXPENDITURE. 7. THEE CIT(A) WITHOUT APPRECIATING FACTS OF THE CA SE THAT BEFORE THE AO, THE ASSESSEE AGREED TO WITHDRAW HIS CLAIM OF EXPENDITUR E AGAINST INCENTIVE BONUS. THE CIT(A) RELIED SOME JUDGMENT OF JURISDICTIONAL H IGH COURT IN THE CASE OF CIT VS. NITINBHAI T. BHUPTANI AND SUBSEQUENT DISMISSAL OF DEPARTMENTAL SLP BY SUPREME COURT VIDE ORDER DATED 07-03-2007 ALLOWED T HE CLAIM OF ASSESSEE AGAINST ADDITIONAL CONVEYANCE ALLOWANCE AND INCENTI VE BONUS. WE FIND THAT THE SAID JUDGMENT IS NOT AVAILABLE ON RECORD NEITHER IT COULD B TRACED OUT AS NO CITATION IS GIVEN. THE CIT(A) ALLOWED BOTH THE CLA IM OF THE AGAINST ADDITIONAL CONVEYANCE ALLOWANCE AND INCENTIVE BONUS. 8. AFTER HEARING LD. D.R., WE FIND THAT THE CONTROV ERSY REGARDING CLAIM AGAINST THE INCENTIVE BONUS FROM LIC BY DEVELOPMENT OFFICER HAS BEEN SETTLED AGAINST ASSESSEE BY THE APEX COURT BY REJECTING SLP (266 IT R 104 (STATUTE) GURUDEV SINGH JAGGI 267 IT 763. 9. THE GROUND NO.1 OF THE REVENUES APPEAL ELATING TO CLAIM OF EXPENDITURE AGAINST THE INCENTIVE BONUS RS.2,42,466/- IS REQUIR ED TO BE DECIDED IN FAVOUR OF THE REVENUE ON THE GROUND THAT THE ASSESSEE AGREED BEFORE THE AO TO WITHDRAW THIS CLAIM AND SECONDLY, IN VIEW OF THE SETTLED POS ITION OF LAW, AS DISCUSSED ABOVE. THE ORDER OF CIT(A) REGARDING GROUND NO.1 I S SET-ASIDE AND THE GROUND IS DECIDED IN FAVOUR OF THE REVENUE. 10 AS REGARDS THE CLAIM OF THE EXPENDITURE AGAINST CONVEYANCE ALLOWANCE, SAME IS ALLOWABLE TO THE ACTUAL EXPENDITURE. THE C IT(A) WITHOUT APPRECIATING THE FACT HAS ALLOWED THE APPEAL OF THE ASSESSEE. H OWEVER, IN THE INTEREST OF JUSTICE, THE GROUND NO.2, CLAIM OF EXPENDITURE AGAI NST THE ADDITIONAL CONVEYANCE ALLOWANCE, THE ORDER OF CIT(A) ON THE ISSUE IS SET- ASIDE AND SENT BACK MATTER TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE I SSUE AFRESH IN ACCORDANCE WITH ITA 274-RJT-2011 A.Y. 2005-06. 4 LAW KEEPING IN VIEW THE ABOVE DISCUSSION AFTER PROV IDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 11. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 -12-2 011. SD/- SD/- ( T. K. SHARMA ), ( A. L. GEHLOT ), JUDICIAL MEMBER. ACCOUNTANT MEMBER. RAJKOT. DATED: 15-12-2011. NVA/ COPY TO:- 1.THE D.C.I.T., CIRCLE-1, JUNAGADH.. 2.SHRI KIRITKANT CHHOTALAL TRIVEDI, UNA. 3.THE C.I.T.(A)-II, RAJKOT. 4.THE C.I.T., RAJKOT. 5.THE D.R., ITAT, RAJKOT. TRUE COPY. BY ORDER, ASSTT. REGISTRAR, ITAT,RAJKOT.