ITO, New Delhi V. M/s. Kansal Fincap Ltd., New Delhi

ITA 2750/DEL/2014

• Counselvise Citation: 275020114 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 28-10-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Keywords: Retrospective amendment; Tax effect
• Section: 69C

Judgement Text

ITA NO.2750/DEL/2014 & CO NO. 79/DEL/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 2750 /DEL/20 14 A.Y. : 200 4 - 0 5 ITO, WARD 5 ( 1 ), NEW DELHI ROOM NO. 308, CR BUILDING, I.P. ESTATE, NEW DELHI VS. M/S KANSAL FINCAP LTD., 4630/18-B, 2 ND FLOOR, ANSARI ROAD, DARYA GANJ, NEW DELHI 2 (PANAAACJ2278G) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) AND AND AND AND C.O. NO. 79 / DEL/201 5 (IN ITA NO. 2750 / DEL/20 14 ) A.Y. : 200 4 - 0 5 M/S KANSAL FINCAP LTD., 4630/18-B, 2 ND FLOOR, ANSARI ROAD, DARYA GANJ, NEW DELHI 2 (PANAAACJ2278G) VS. ITO, WARD 5(1), NEW DELHI ROOM NO. 308, CR BUILDING, I.P. ESTATE, NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. P. DAM KANUNJNA, SR. DR ASSESSEE BY : SH. R AJ KUMAR, CA DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 2 22 28 88 8- -- -10 1010 10- -- -201 201 201 2015 55 5 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 28 2828 28- -- -10 1010 10- -- -201 201 201 2015 55 5 ORDER ORDER ORDER ORDER THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTI ONS FILED BY THE ASSESSEE EMANATE OUT OF THE COMMON ORDER DATED 25.2.2014 PASSED BY THE LD. CIT(A)-VIII, NEW DELHI PERTAININ G TO ASSESSMENT YEAR ITA NO.2750/DEL/2014 & CO NO. 79/DEL/2015 2 2004-05. FOR THE SAKE OF CONVENIENCE, WE ARE PROC EEDING TO DISPOSE OFF THE APPEAL AND CROSS OBJECTIONS BY THIS CONSOL IDATED ORDER. 2. THE GROUNDS RAISED IN THE REVENUES APPEAL READ AS UNDER:- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 10,00,000/- MADE BY THE AO U/S. 68 AND RS. 5,000/- U/S. 69C OF THE I.T. ACT, 1961 AS CREDITWORTHINESS / GENUINENESS / CORRECTNESS OF THE TRANSACTIONS COULD NOT BE PROVED BY THE ASSESSEE COMPANY? 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN ADMITTING / ACCEPTING AND RELYING ON THE FRESH SUBMISSION OF TH E ASSESSEE IN THE SHAPE OF STATEMENT OF MR. MAHESH GARG WITHOUT PROVIDING THE AO ANY OPPORTUNITY TO REBUT AS PER THE PROVISION OF RULE 46A? 3. THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AN D IS NOT TENABLE ON FACTS AND IN LAW. 4. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A MEND OR FORGO ANY GROUND(S) OF THE APPEAL RAISED ABOVE A T THE TIME OF THE HEARING. 3. THE GROUNDS RAISED IN THE ASSESSEES CROSS OBJEC TION READ AS UNDER:- ITA NO.2750/DEL/2014 & CO NO. 79/DEL/2015 3 1. THAT THE APPEAL FILED BY THE DEPARTMENT IS NON MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT BEING LES S THAN RS. 4 LACS. 2. THAT WITHOUT PREJUDICE, UNDER THE FACTS AND CIR CUMSTANCES, THE PROCEEDINGS U/S. 147/148 ARE ILLEGAL, UNWARRANT ED AND WITHOUT JURISDICTION, THUS, NON MAINTAINABLE. 3. THAT WITHOUT PREJUDICE IN THE ABSENCE OF LEGALLY VALID APPROVAL U/S. 151 OF THE I.T. ACT THE COMPLETE PRO CEEDINGS ARE WITHOUT JURISDICTION. 4. THAT THE LD. CIT(A) HAS BEEN FULLY JUSTIFIED IN DELETING THE ADDITION OF RS. 10 LACS MADE U/S. 68 AND RS. 5,000/ - U/S. 69C. 4. AT THE THRESHOLD, LD. COUNSEL OF THE ASSESSEE S TATED THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS. 4,00,000/-, THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED THIS APPEAL I N VIEW OF THE CIRCULAR ISSUED BY THE CBDT AND THE PROVISIONS CONT AINED IN THE SECTION 268A OF THE INCOME TAX ACT, 1961 (HEREINAFT ER TO BE REFERRED AS THE ACT). 5. LD. DR SUPPORTED THE ORDER OF THE AO. 6. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT SECTION 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01/04/1999. THE RELEVANT PROVISIONS CONTAINED IN SECTION 268A R EAD AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSU E ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME-TAX AUTHORITIES, FIXI NG SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PURPOSE OF REGUL ATING FILING OF APPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME-TAX AUTH ORITY UNDER THE PROVISIONS OF THIS CHAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTION S OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), AN INCOME-TAX AUTHORITY HAS NOT FILED ANY ITA NO.2750/DEL/2014 & CO NO. 79/DEL/2015 4 APPEAL OR APPLICATION FOR REFERENCE ON ANY ISSUE IN THE CASE OF AN ASSESSEE FOR ANY ASSESSMENT YEAR, IT SHALL NOT PREC LUDE SUCH AUTHORITY FROM FILING AN APPEAL OR APPLICATION FOR REFERENCE ON THE SAME ISSUE IN THE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEA R; OR (B) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER AS SESSMENT YEAR; (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION FOR REFERENCE HAS BEEN FILED BY AN INCOME-TAX AUTHORITY PURSUANT TO T HE ORDERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), IT SHALL NOT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME-TAX AUTHORITY HAS ACQUIESCE D IN THE DECISION ON THE DISPUTED ISSUE BY NOT FILING AN APP EAL OR APPLICATION FOR REFERENCE IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUC TIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1) AND THE CIRCUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NO T FILED IN RESPECT OF ANY CASE. (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH H AS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR FILING AN APPEAL O R APPLICATION FOR REFERENCE SHALL BE DEEMED TO HAVE BEEN ISSUED UNDER SUB-SECTION (1) AND THE PROVISIONS OF SUB-SECTIONS (2), (3) AND (4) SHALL APPLY ACCORDINGLY. 7. IT IS NOT IN DISPUTE THAT THE BOARDS INSTRUCTIO N OR DIRECTIONS ISSUED TO THE OTHER INCOME-TAX AUTHORITIES ARE BINDING ON THOSE AUTHORITIES, THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED T HE APPEAL IN VIEW OF THE ABOVE MENTIONED SECTION 268A SINCE THE TAX E FFECT IN THE INSTANT CASE IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FILING THE APPEAL. 8. IT IS NOTICED THAT THE CBDT HAS ISSUED INSTRUCTI ON NO. 5/2014 DATED 10 TH JULY, 2014, BY WHICH THE CBDT HAS REVISED THE MONE TARY LIMIT TO RS. 4,00,000/- FOR FILING THE APPEAL BEFORE THE TRIBUNA L. 9. KEEPING IN VIEW THE CBDT INSTRUCTION NO. 5 OF 20 14 DATED 10 TH JULY, 2014 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, I AM OF THE VIEW THAT THE REVENUE SHOULD NOT HAVE FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL. WHILE TAKING S UCH A VIEW, I FORTIFY ITA NO.2750/DEL/2014 & CO NO. 79/DEL/2015 5 BY THE FOLLOWING DECISIONS OF THE HONBLE PUNJAB & HARYANA HIGH COURT: 1. CIT VS. OSCAR LABORATORIES P. LTD. (2010) 324 ITR 1 15 (P&H); 2. CIT VS. ABINASH GUPTA (2010) 327 ITR 619 (P&H); 3. CIT VS. VARINDERA CONSTRUCTION CO. (2011) 331 ITR 4 49 (P&H) (FB). 10. SIMILARLY, THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DELHI RACE CLUB LTD. IN ITA NO. 128/2008, ORDER DATED 03. 03.2011 BY FOLLOWING THE EARLIER ORDER DATED 02.08.2010 IN ITA NO. 179/1991 IN THE CASE OF CIT DELHI-III VS. M/S P.S. JAIN & CO. HELD THAT SUCH CIRCULAR WOULD ALSO BE APPLICABLE TO PENDING CASES. 11. THUS, FROM THE RATIO LAID DOWN BY THE HONBL DE LHI HIGH COURT, IT IS CLEAR THAT THE INSTRUCTIONS ISSUED IN THE CIRCULARS BY CBDT ARE APPLICABLE FOR PENDING CASES ALSO. THEREFORE, BY K EEPING IN VIEW THE RATIO LAID DOWN IN THE AFORESAID REFERRED TO CASE, I AM OF THE CONSIDERED VIEW THAT INSTRUCTION NO. 5 OF 2014 DATE D 10 TH JULY, 2014 ISSUED BY THE CBDT ARE APPLICABLE FOR THE PENDING C ASES ALSO AND IN THE SAID INSTRUCTIONS, MONETARY TAX LIMIT FOR NOT F ILING THE APPEAL BEFORE THE ITAT IS RS. 4,00,000/-. 12. IN VIEW OF THE ABOVE, WITHOUT GOING INTO MERIT OF THE CASE, I DISMISS THE APPEAL FILED BY THE REVENUE. 14. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ASSESSEES CROSS OBJECTION 15. AS FAR AS ASSESSEES CROSS OBJECTION IS CONCERN ED, THE SAME HAS BEEN WITHDRAWN BY THE LD. COUNSEL FOR THE ASSESSEE AND, THEREFORE, THE SAME IS DISMISSED, AS SUCH. ITA NO.2750/DEL/2014 & CO NO. 79/DEL/2015 6 16. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO D ISMISSED, AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT 28-10-2015. S SS SD DD D/ // /- -- - [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 28/10/2015 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO.2750/DEL/2014 & CO NO. 79/DEL/2015 7