DCIT, C-III, Ludhiana V. M/s SEL Manufacturing Co. Ltd., Ludhiana

ITA 301/CHANDI/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0443 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 08-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH GUPTA
• Assessee Lawyers: ADITYA KUMAR
• Keywords: Tax effect
• Section: 143(3); 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH , ! . .., # $, %& BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 155/CHD/2018 / ASSESSMENT YEAR : 2008-09 M/S SEL MANUFACTURING CO. LIMITED, 274, G.T.ROAD,DHANDASRI KHURD, LUDHIANA DCIT, CENTRAL CIRCLE-III, LUDHIANA ./PAN NO: AAHCS9189E APPEAL AGAINST THE ORDER OF CIT(A)-2, JALANDHAR DA TED 21.12.2017 ./ ITA NO. 301/CHD/2018 / ASSESSMENT YEAR : 2008-09 DCIT, CENTRAL CIRCLE-III, LUDHIANA M/S SEL MANUFACTURING CO. LIMITED, 274, G.T.ROAD,DHANDASRI KHURD, LUDHIANA ./PAN NO: AAHCS9189E APPEAL AGAINST THE ORDER OF CIT(A)-2, JALANDHAR DA TED 21.12.2017 /ASSESSEE BY : SH. ASHWANI KUMAR , & SH. ADITYA KU MAR, CAS / REVENUE BY : SH. ASHISH GUPTA, CIT DR & ./ ITA NO. 156/CHD/2018 / ASSESSMENT YEAR : 2009-10 M/S SEL MANUFACTURING CO. LIMITED, 274, G.T.ROAD,DHANDASRI KHURD, LUDHIANA DCIT, CENTRAL CIRCLE-III, LUDHIANA ./PAN NO: AAHCS9189E APPEAL AGAINST THE ORDER OF CIT(A)-2, JALANDHAR DA TED 21.12.2017 / APPELLANT !' /RESPONDENT ITA NOS. 155-301-156-C/2018 M/S SEL MANUFACTURING CO LTD., LUDHIANA 2 /ASSESSEE BY : S/SH. ASHWANI KUMAR & SH. ADITYA KUM AR, CA / REVENUE BY : SH. ASHISH GUPTA, CIT DR # $ % /DATE OF HEARING : 20.09. 2018 &'() % / DATE OF PRONOUNCEMENT : 2018 %'/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE CAPTIONED CROSS APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AND REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS), JALANDHAR [HEREINAFTER REFERRED TO AS CIT(A)]. FI RST, WE SHALL DEAL WITH THE APPEAL OF THE ASSESSEE IN ITA NO. 155/CHD/2018. ITA NO. 155/CHD/2018 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN TWO GROUND S. GROUND NO.1 IS LEGAL GROUND AGITATING THE ACTION OF THE CIT(A) IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN FRAMING ASSESSMENT U/S 153 A OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). GROUND NO.2 IS ON MERIT S, AGITATING THE ACTION OF THE CIT(A) IN UPHOLDING THE DISALLOWANCE OF RS. 5,5 2,000/- U/S 36(I)(III) OF THE INCOME TAX ACT WHICH WAS ALREADY DISALLOWED BY THE ASSESSEE IN THE RETURN OF INCOME FILED U/S 153A OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ORIGINA L ASSESSMENT IN THIS CASE WAS FRAMED U/S 143(3) OF THE ACT, WHEREIN, THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF RS. 49,00,926/- U/S 36(1)(III ) OF THE ACT. HOWEVER, IN APPEAL, THE LD. CIT(A) RESTRICTED THE SAID DISAL LOWANCE TO RS.5,52,000/-. THEREAFTER, A SEARCH ACTION WAS CARRIED OUT IN THE CASE OF THE ASSESSEE PURSUANT TO WHICH THE ASSESSMENT WAS FRAMED BY THE ASSESSING OFFICER U/S 153A OF THE ACT. IN THE FRESH ASSESSMENT U/S 153A OF THE ACT, THE ASSESSING OFFICER AGAIN CONFIRMED THE DISALLOWANCE U/S 36(I)(III) OF THE ACT ITA NOS. 155-301-156-C/2018 M/S SEL MANUFACTURING CO LTD., LUDHIANA 3 AT RS. 49,00,926/- DESPITE THE FACT THAT IN APPEAL AGAINST THE ORIGINAL ASSESSMENT FRAMED BY THE ASSESSING OFFICER, THE LD. CIT(A) HAD RESTRICTED THE SAID DISALLOWANCE TO RS. 5,52,000/-. THE ASSESS ING OFFICER OBSERVED THAT THE DEPARTMENT HAD MOVED AN APPEAL BEFORE THE ITAT AGAINST THE ORDER OF THE CIT(A) AGAINST THE ORIGINAL ASSESSMENT ORDE R, HENCE HE STICKED TO THE AMOUNT OF ORIGINAL DISALLOWANCE MADE ON THIS I SSUE IN THE ASSESSMENT ORDER. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS BROUGHT OUR ATTENTION TO THE ORDER OF THE TRIBUNAL PASSED IN THE APPEAL OF THE D EPARTMENT IN RESPECT OF THE ADDITION MADE IN THE ORIGINAL ASSESSMENT PROCEE DINGS, WHEREBY, THE TRIBUNAL VIDE ORDER DATED 7.02.2017 PASSED IN ITA N O. 106/CHD/2012 ALONG WITH OTHER APPEALS HAS UPHELD THE ORDER OF TH E CIT(A) IN RESTRICTING THE DISALLOWANCE TO RS. 5,52,000/- AGAINST THE DI SALLOWANCE MADE BY THE ASSESSING OFFICER OF RS. 49,00,926/-. SINCE THE ASS ESSING OFFICER IN THE ASSESSMENT FRAMED U/S 153A OF THE ACT HAD RECONFIRM ED THE DISALLOWANCE MADE OF RS. 49,00926/-, AS WAS MADE IN THE ORIGINA L ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE ASSESSEE PR EFERRED APPEAL BEFORE THE CIT(A). HOWEVER, THE LD. CIT(A) OBSERVING TH AT THE APPEAL OF THE REVENUE AGAINST THE ORDER OF THE CIT(A) IN RESPECT OF ORIGINAL ASSESSMENT PROCEEDINGS HAS BEEN DISMISSED, HE THEREFORE, RESTR ICTED THE DISALLOWANCE AS PER THE ORDER OF THE CIT(A) IN FIRST ROUND AT RS . 5,52000/-. 5. NOW COMING TO THE PRESENT APPEAL OF THE ASSESSEE . SO FAR AS THE LEGAL GROUND THAT THE ASSESSMENT SHOULD NOT HAVE BEEN FRA MED U/S 153A OF THE ACT IS CONCERNED, WE FIND THAT NO ADDITION HAS BEEN MADE BY THE ASSESSING ITA NOS. 155-301-156-C/2018 M/S SEL MANUFACTURING CO LTD., LUDHIANA 4 OFFICER IN THIS CASE. THAT HE HAS SIMPLY RETAINED T HE ADDITIONS AS WERE MADE IN THE ORIGINAL ASSESSMENT. SO FAR AS THE ORDE R OF THE CIT(A) IN THE FIRST ROUND RESTRICTING THE DISALLOWANCE AT RS. 5,5 2,000/- AS AGAINST THE ADDITION MADE BY THE ASSESSING OFFICER AT RS. 49,0 0,926/- IS CONCERNED, THE LD. CIT(A) IN THE IMPUGNED ORDER HAS SIMPLY RET AINED THE DISALLOWANCE WHICH WAS RETAINED BY THE CIT(A) IN THE FIRST ROU ND. THE ASSESSEE HAS ALSO MENTIONED IN ITS GROUNDS OF APPEAL THAT HE HAS ALSO SUO MOTO DISALLOWED THE SAID AMOUNT IN THE RETURN FILED U/S 153A OF THE ACT. UNDER THESE CIRCUMSTANCES, THERE IS NO GRIEVANCE LEFT WIT H THE ASSESSEE IN THIS CASE. HOWEVER, IT IS CLARIFIED THAT IF THE ASSESSE E HAS ALREADY DISALLOWED THE SAID AMOUNT OF RS. 5,52,000/- IN THE RETURN FIL ED U/S 153A OF THE ACT, NO FURTHER DISALLOWANCE WILL BE ATTRACTED. SUBJECT TO THE ABOVE OBSERVATIONS, THE APPEAL OF THE ASSESSEE IS HEREBY DISMISSED. ITA NO. 301/CHD/2018 (A.Y.2008-09) 6. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE H AS SUBMITTED THAT THE TAX EFFECT INVOLVED IN THE PRESENT CASE IS LESS THA N RS. 20 LACS. THE LD. DR HAS ALSO FAIRLY ADMITTED THAT CBDT CIRCULAR NO. 3/2 018 IS APPLICABLE TO THIS APPEAL, HENCE, THIS APPEAL OF THE REVENUE IS L IABLE TO BE DISMISSED. 7. IT MAY BE NOTED THAT CBDT VIDE CIRCULAR NO. 3/20 18 DATED 11.07.2018 HAS REVISED THE MONETARY LIMIT UPTO RS.2 0 LACS FOR FILING APPEALS BY THE DEPARTMENT BEFORE THE TRIBUNAL AND F URTHER VIDE PARA 13 OF THE SAID CIRCULAR IT HAS BEEN CLARIFIED THAT SAID C IRCULAR IS APPLICABLE RETROSPECTIVELY TO THE PENDING APPEALS ALSO. THE H ONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PRINCIPAL CIT OF INCOME TAX VS. SURINDER KUMAR SINGHAL ITA NO 406-2016 (O&M) VIDE ORDER DATED 30.1.2017 WHILE FURTHER RELYING UPON THE DECISION O F THE HON'BLE SUPREME ITA NOS. 155-301-156-C/2018 M/S SEL MANUFACTURING CO LTD., LUDHIANA 5 COURT IN THE CASE OF CIT VS. DHANALEKSHMI BANK LTD . (2015) 373 ITR 526 (SC), HAS DISMISSED THE APPEAL OF THE REVENUE W ITHOUT GOING INTO THE MERITS DUE TO LOW TAX EFFECT LEAVING THE QUESTION O F LAW OPEN. IN VIEW OF THE CBDT CIRCULAR NO. 03/2018 (SUPRA) AND IN THE LI GHT OF THE ABOVE REFERRED TO DECISION OF THE HON'BLE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT (SUPRA), THE PRESENT APPEAL OF THE REVENUE IS DISMISSED DUE TO LOW TAX EFFECT. IT IS, HOWEVER, CLARIFIED THAT THE DISMISSAL OF THE ABOVE APPEAL SHALL NOT BE TAKEN TO BE AFFIRMATION OF THE ORDER OF THE CIT(A) ON MERITS. THE LEGAL ISSUE RAISED BY THE REVENUE IS BEING LEFT OPE N TO BE ADJUDICATED IN AN APPROPRIATE CASE. ITA NO. 156/CHD/2018 (A.Y.2009-10) 8. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED IN WRITING THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THE APPE AL, AS SUCH, HE INTENDS TO WITHDRAW THE PRESENT APPEAL. THE LD. DR HAS NO OBJECTION FOR THE SAID WITHDRAWAL. IN VIEW OF THE ABOVE, WE GRANT PERMISSION TO THE ASSESSEE TO WITHDRAW THE APPEAL. CONSEQUENTLY, THE APPEAL OF T HE ASSESSEE IS HEREBY DISMISSED AS WITHDRAWN. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE AND REVENUE ARE HEREBY, DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.11.2018. SD/- SD/- ( ) * # +, / ANNAPURNA GUPTA) %& / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER ITA NOS. 155-301-156-C/2018 M/S SEL MANUFACTURING CO LTD., LUDHIANA 6 DATED : 28.11.2018 .. '+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 ! 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 / ASSISTANT REGISTRAR