DCIT, Moradabad V. M/s. Indian Variety Traders, Moradabad

ITA 300/DEL/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4228 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 28-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K RAVI RAM CHANDRAN
• Keywords: Tax effect
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH C CC C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI K. K.K. K.D.RANJAN D.RANJAN D.RANJAN D.RANJAN, AM , AM , AM , AM ITA NO. ITA NO. ITA NO. ITA NO.300/DEL/2009 300/DEL/2009 300/DEL/2009 300/DEL/2009 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2005 2005 2005 2005- -- -06 0606 06 DY.COMMISSIONER OF DY.COMMISSIONER OF DY.COMMISSIONER OF DY.COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, RANGE RANGE RANGE RANGE- -- -I, I,I, I, MORADABAD. MORADABAD. MORADABAD. MORADABAD. VS. VS. VS. VS. M/S INDIAN VARIETY TRADERS, M/S INDIAN VARIETY TRADERS, M/S INDIAN VARIETY TRADERS, M/S INDIAN VARIETY TRADERS, LAJPA LAJPA LAJPA LAJPAT NAGAR, T NAGAR, T NAGAR, T NAGAR, MORADABAD. MORADABAD. MORADABAD. MORADABAD. PAN NO. PAN NO. PAN NO. PAN NO.AAAFI8129C. AAAFI8129C. AAAFI8129C. AAAFI8129C. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.RAVI RAMCHANDRAN, SR.DR RESPONDENT BY : SHRI PIYUSH KAUSHIK, ADVOCATE. ORDER ORDER ORDER ORDER PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI, J , J, J , JM : M : M : M : THE REVENUE IS IN APPEAL AGAINST THE ORDER DATED 6 .10.2008 PASSED BY LEARNED CIT(A) PERTAINING TO THE AY 2005- 06. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REVO LVE AROUND THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB ON THE AMOUN T OF EXPORT INCENTIVES WHICH WERE DISALLOWED BY THE AO BUT ALLO WED BY THE LEARNED CIT(A). 3. IN THIS CASE, THE ASSESSEE FILED ITS RETURN OF I NCOME DECLARING TOTAL INCOME AT `2,64,107/-. THE AO COMPLETED THE ASSESSMENT DETERMINING TOTAL INCOME AT `3,70,303/-. THE ASSES SEES CLAIM OF DEDUCTION U/S 80IB TO THE EXTENT OF 25% OF THE EXPO RT INCENTIVES WAS DISALLOWED BY THE AO. THE LEARNED CIT(A) ALLOWED T HE ASSESSEES CLAIM. HENCE, THE DEPARTMENT IS IN APPEAL BEFORE U S. 4. IN THE COURSE OF HEARING OF THIS APPEAL, THE ASS ESSEE POINTED OUT THAT THE TAX EFFECT ON THE AMOUNT OF DEDUCTION CLAI MED BY THE ITA-300/DEL/2009 2 ASSESSEE IN THE RETURN OF INCOME WHICH HAS BEEN DIS ALLOWED BY THE AO IS BELOW `2 LAKHS AND, THEREFORE, THE PRESENT APPEA L IS NOT MAINTAINABLE IN THE LIGHT OF INSTRUCTION NO.5/2008 DATED 15.5.2008 OF THE CBDT. THE ASSESSEE HAS FURNISHED CALCULATION O F TAX EFFECT AS UNDER:- INCOME ASSESSED AS PER THE ASSESSMENT ORDER RS.3,70,300 RETURNED INCOME RS.2,64,107 DIFFERENCE RS.1,06,193 TAX EFFECT @ 30% PLUS SURCHARGE@ 2% RS.32,495 5. IN THE COURSE OF HEARING OF THIS APPEAL, THE LEA RNED DR HAS NOT BEEN ABLE TO POINT OUT ANY DEFECT IN THE ABOVE CALC ULATION OF TAX EFFECT. 6. IN THIS CASE, THE ISSUE ON MERIT IS UNDOUBTEDLY AGAINST THE ASSESSEE BUT THE APPEAL IS NOT FOUND TO BE MAINTAIN ABLE IN THE LIGHT OF THE AFORESAID BOARDS CIRCULAR. IN THIS RESPECT, T HE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER DATED 18.3.2011 OF ITAT DELHI BENCH FRIDAY NEW DELHI IN THE CASE OF ACIT VS. M/ S KUMAR INTERNATIONAL IN MISCELLANEOUS APPLICATION NO.389/D EL/2010 ARISING FROM ITA NO.2562/DEL/2009 WHERE THE BENCH HAS TAKEN A VIEW AS UNDER:- 3. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORD CAREFULLY. NO DOUBT THE IS SUE ON MERIT IS AGAINST THE ASSESSEE BUT HAD THE MAINTAINA BILITY OF THE APPEAL ITSELF ON ACCOUNT OF LOW TAX EFFECT BEEN ADJUDICATED WHEN THE APPEAL WAS DECIDED ON MERIT TH EN PROBABLY REVENUE WOULD NOT BE IN A POSITION TO FILE THE PRESENT MISCELLANEOUS APPLICATION. IF THE TAX EFFE CT INVOLVED IN THE APPEAL IS LESS THAN RS.2 LACS THEN BEFORE GOING INTO THE MERIT OF THE ISSUES AGITATED IN THE APPEAL AT THE INSTANCE OF THE REVENUE, THE ITAT IS SUPPOSED T O GO INTO THE MAINTAINABILITY OF APPEAL FIRST. HON'BLE DELHI HIGH ITA-300/DEL/2009 3 COURT IN THE CASE OF CIT VS. DELHI RACE CLUB IN ITA NO.128 OF 2008 RENDERED ON 3.3.2011 HAS DISMISSED THE APPE AL OF THE REVENUE BEING FILED IN VIOLATION TO CBDT INSTRU CTIONS. THE HONBLE COURT HAS OBSERVED THAT MONETARY LIMIT PROVIDED IN CHALLENGING THE ORDER OF THE LEARNED CIT(APPEALS) ENHANCED IN FEBRUARY 2011 WOULD BE APPLICABLE ON PENDING MATTERS. FOR THIS CONCLUSION , HONBLE COURT HAS RELIED UPON ITS DECISION IN ITR 1 79 OF 1991 RENDERED IN THE CASE OF CIT VS. PS JAIN & CO. IN VIEW OF THE ABOVE DISCUSSION, THE APPLICATION OF THE REV ENUE IS NOT MAINTAINABLE. IT IS DISMISSED. 7. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO RE LIED UPON THE ORDER DATED 7.1.2011 PASSED BY ITAT DELHI BENCH A , NEW DELHI IN THE CASE OF DCIT VS. SHRI ANIL KUMAR RASTOGI PASSED IN MISCELLANEOUS APPLICATION NO.355/DEL/2010 ARISING FROM ITA NO.333 4/DEL/2009 WHERE THE TRIBUNAL HAS HELD AS UNDER:- WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE MERIT OF T HE ISSUE WAS NEVER CONSIDERED BY THE TRIBUNAL AND APPEAL OF THE REVENUE WAS DISMISSED ON GROUND OF LOW TAX EFFECT. THE TRIBUNAL HAS BEEN TAKING CONSISTENT VIEW THAT IRRES PECTIVE OF THE MERITS OF THE ADDITION, THE APPEAL COULD NOT BE FILED BY THE REVENUE ON ACCOUNT OF LOW TAX EFFECT. THE A PPEAL HAVING BEEN DISMISSED ON ACCOUNT OF LOW TAX EFFECT WITHOUT CONSIDERING THE MERITS, WE SEE NO FORCE IN THE CONT ENTION RAISED BY THE REVENUE FOR RECALLING OF THE AFOREMEN TIONED ORDER. THERE IS NO MISTAKE AS ENVISAGED IN SECTION 254(2) OF THE ACT IN THE ORDER OF THE TRIBUNAL. THEREFORE , WE DISMISS THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. 8. TO THE SAME EFFECT, SOME MORE DECISIONS WERE ALS O REFERRED TO BY THE LEARNED COUNSEL FOR THE ASSESSEE. 9. AFTER HEARING BOTH THE PARTIES AND CONSIDERING T HE AFORESAID DECISIONS OF COORDINATE BENCHES OF THE TRIBUNAL, WE ARE OF THE CONSIDERED VIEW THAT THE PRESENT APPEAL IS NOT MAIN TAINABLE FOR THE REASON THAT THE TAX EFFECT IN THE PRESENT CASE IS B ELOW `2 LAKHS BEING ITA-300/DEL/2009 4 THE LIMIT PRESCRIBED BY CBDT VIDE CIRCULAR NO.5/200 8 DATED 15.5.2008. WE, THEREFORE, DISMISS THE PRESENT APPEAL AS NOT MA INTAINABLE. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 21 ST APRIL, 2011. SD/- SD/- (K.D.RANJAN (K.D.RANJAN (K.D.RANJAN (K.D.RANJAN) )) ) (C.L.SETHI (C.L.SETHI (C.L.SETHI (C.L.SETHI) )) ) ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 21.04.2011 VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR