The ITO, Ward-1, GANDHIDHAM V. Shri Jitubhai Hamirji Jadeja, GANDHIDHAM

ITA 306/RJT/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0178 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 02-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D R CHHATRE
• Assessee Lawyers: DM RINDANI
• Keywords: Retrospective amendment; Corroborative evidences; Tax effect

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT [CONDUCTED THROUGH E COURT AT AHMEDABAD] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.306/RJT/2014 / ASSTT. YEAR: 2009-2010 ITO, WARD - 1 GANDHIDHAM. VS SHRI JITUBHA HAMIRJI JADEJA C/O. M/S.BHAVANI ROADWAYS 10, TRANSPORT NAGAR GANDHIDHAM-KUTCH. ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI D.R. CHHATRE, SR.DR ASSESSEE BY : SHRI D.M. RINDANI, AR / DATE OF HEARING : 23/08/2016 / DATE OF PRONOUNCEMENT: 24/08/2016 $%/ O R D E R PER BENCH: THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINS T THE ORDER OF THE LD.CIT(A)-II, RAJKOT DATED 26.2.2014 PASSED FOR THE ASSTT.YEAR 2009-10. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN ITS APPEAL: 1. THE LD. CIT (A) HAS ERRED IN RESTRICTING THE ADD ITION MADE ON A/C OF DRIVER & CLEANER SALARY EXPENSES TO 5% (OUT OF THE TOTAL EXP. OF RS. 30,24,000/-) AS AGAINST 10% MADE BY THE AO WITHOUT A PPRECIATING THE FACTS THAT NEITHER DURING THE ASSESSMENT PROCEEDING S NOR DURING THE APPELLATE STAGE CONCRETE SUPPORTING EVIDENCES WERE PRODUCED BY THE ASSESSEE TO SUPPORT THE GENUINENESS OF QUANTUM OF E XPENSES. THUS LD. CIT(A) HAS ERRED IN GRANTING A RELIEF OF RS.1,51,200/ - TO THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. THE LD. CIT (A) HAS ERRED IN RESTRICTING THE ADDI TION MADE ON A/C OF TRIP EXPENSES TO 5% ( OUT OF THE TOTAL EXP. OF RS. 6 2,09,044/-) AS AGAINST 10% MADE BY THE AO WITHOUT APPRECIATING THE FACTS TH AT NEITHER DURING ITA NO.306/RJT/2014 2 THE ASSESSMENT PROCEEDINGS NOR DURING THE APPELLATE STAGE CONCRETE SUPPORTING EVIDENCES WERE PRODUCED BY THE ASSESSEE TO SUPPORT THE GENUINENESS OF QUANTUM OF EXPENSES. THUS LD. CIT(A) HAS ERRED IN GRANTING A RELIEF OF RS. 3,10,452/- TO THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE. 3. THE LD. CIT (A) HAS ERRED IN RESTRICTING THE ADDI TION MADE ON A/C OF REPAIRING AND MAINTENANCE EXPENSES TO 10% ( OUT OF T HE TOTAL EXP. OF RS. 35,53,399/-) AS AGAINST 20% MADE BY THE AO WITHOUT A PPRECIATING THE FACTS THAT NEITHER DURING THE ASSESSMENT PROCEEDING S NOR DURING THE APPELLATE STAGE CONCRETE SUPPORTING EVIDENCES WERE PRODUCED BY THE ASSESSEE TO SUPPORT THE GENUINENESS OF QUANTUM OF E XPENSES. THUS LD. CIT(A) HAS ERRED IN GRANTING A RELIEF OF RS. 3,55,340 /- TO THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE. 4. THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITIO N OF RS. 10,76,196/-MADE ON A/C OF INTEREST PAYMENTS MADE BY THE ASSESSEE TO NBFCS WITHOUT DEDUCTING TDS AND THUS IN VIOLATION OF PROVISIONS OF SECTION 40(A) (IA) OF THE ACT. 3. THE LD.COUNSEL FOR THE ASSESSEE, AT THE OUTSET, RAISED PRELIMINARY OBJECTION AS TO THE MAINTAINABILITY OF APPEAL FILED BY THE REVENUE IN VIEW OF CBDT CIRCULAR NO.21/2015 DATED 10.12.2015, WHEREBY THE BOARD HAS RESTRAINED THE DEPARTMENT NOT TO FILE APPEAL BEFORE THE TRIBUNAL WHERE THE TAX EFFECT IS BELOW RS.10 LAKHS. THE LD.COUNSEL FOR TH E ASSESSEE SUBMITTED THAT UNDISPUTEDLY, TAX EFFECT IN THE PRESENT APPEAL IS B ELOW RS.10.00 LAKHS PRESCRIBED BY THE CBDT FOR FILING THE APPEAL BEFORE THE TRIBUNAL. ASSESSEE HAS FILED A STATEMENT SHOWING COMPUTATION OF INCOME AFTER GIVING EFFECT TO THE CIT(A)S ORDER, WHICH READS AS UNDER: PARTICULARS AMOUNTS (RS.) TAX ON ASSESSED INCOME AS PER ORDER U/S.143(3) (AS PER CALCULATION SHEET GIVEN BY DEPT.) (A) 11,56,827/- LESS: TAX ON AMOUNT AS REDUCED BY THE AMOUNT IN RESPECT OF WHICH APPEAL IS FILED 5,13,335/- ITA NO.306/RJT/2014 3 TOTAL ASSESSED INCOME 35,53,440/- LESS: AMOUNT IN RESPECT OF WHICH APPEAL IS FILED 18,93,188/- 16,60,252 TAX ON RS.16,60,252 (B) 5,13,335/- TAX EFFECT (A-B) 6,43,494/- TO THIS, THE LD.DR WAS UNABLE TO CONTROVERT TO THE SUBMISSIONS OF LD.COUNSEL FOR THE ASSESSEE ON THIS PRELIMINARY ISSUE. 4. WE FIND THAT THE REVENUE HAS FILED THIS APPEAL ON 2.05.2014. ON 10.12.2015 THE CBDT HAS ISSUED INSTRUCTIONS BEARING NO. 21/2015 PROHIBITING ITS SUBORDINATE AUTHORITIES FROM FILING OF THE APPEAL TO THE TRIBUNAL AGAINST THE ORDER OF THE CIT(A) WHERE THE TAX EFFEC T BY VIRTUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.10 LAKHS. THE INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RETROSPECTIVE EFFECT, MEANING THEREBY, THESE INSTRUCTIONS ARE APPLICABLE ON PENDING APPEALS ALSO. IN THE PRE SENT CASE, AS PER THE DETAILS SUBMITTED BY THE ASSESSEE SHOWING COMPUTATION OF IN COME AND CONSEQUENT TAX EFFECT AFTER GIVING EFFECT TO THE IMPUGNED ORDER OF THE LD.CIT(A), THE TAX EFFECT ON THIS IMPUGNED DELETION WOULD BE LESS THAN RS.10 LAKHS. CALCULATION SHEET FILED BY THE ASSESSEE HAS NOT BEEN DISPUTED BY THE LD.DR. THEREFORE, THE PRESENT APPEAL DOES NOT SURVIVE AND DESERVES TO BE DISMISSED BEING TREATED TO BE FILED IN VIOLATION OF THE ABOVE CBDT INSTRUCTION S. IT IS FURTHER OBSERVED THAT SINCE, WHILE HEARING THE APPEAL, SUCH FACTORS COULD NOT BE CROSS-VERIFIED, THEREFORE, IN CASE, ON RE-VERIFICATION AT THE END O F THE AO, IT CAME TO THE NOTICE THAT THE TAX EFFECT IS MORE OR IT FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE INSTRUCTION, THEN THE DEPARTMENT WILL BE AT LIB ERTY TO APPROACH THE TRIBUNAL FOR RECALL OF THIS ORDER. SUCH APPLICATIO N SHOULD BE FILED WITHIN ITA NO.306/RJT/2014 4 LIMITATION PRESCRIBED UNDER THE LAW. IN VIEW OF TH E ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 24 TH AUGUST, 2016 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER