The ITO, Ward-11(2), Ahmedabad V. Shri Vijay Roopchand Thadani, Ahmedabad

ITA 309/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1036 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 01-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMAL I MEHTA
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI N. K. BILLAIYA , ACCOUNTANT MEMBER. ITA. NO.309/AHD/2013 (ASSESSMENT YEAR:2005-06) THE I TO, WARD-11(2), AHMEDABAD APPELLANT VS. VIJAY ROOPCHAND THADANI 16, NUTAN SOCIETY, B/H SUVIDHA SHOPING CENTRE, PALDI, AHMEDABAD RES PONDENT PAN: ACUPT6830D /BY APPELLANT :SHRI VIMAL I. MEHTA, SR.D.R. /BY RESPONDENT :SHRI UMAID SINGH BHATI, A.R. /DATE OF HEARING : 27.07.2016 /DATE OF PRONOUNCEMENT : 27.07.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, AHMEDABA D, DATED 20.11.2012 FOR A.Y. 2005-06 ON FOLLOWING GROUNDS:- ITA NO.309/AHD/13 A.Y. 05-06 [ITO VS. VIJAY R. THADANI] PAGE 2 (1) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE ON ACCOUNT OF CASH PAYMENT TOWARDS INVESTMENT IN DEV COMPLEX OF RS.22,00,000/- ON PROTECTIVE BASIS, WITHOUT CONSIDERING THE FACT THAT ASSESSEE WAS HELD AN AGENT OF NRI SHRI KAMLESH R. KHANCBANDANI BY VIRTUE OF ORDER U/S. 163(1) OF THE ACT TAKING INTO CONSIDERATION THE SUBSTANTIAL EVIDENCE BROUGHT ON RECORD VIZ. TRANSACTIONS MADE IN CASH, NATURE OF BANK MANDATE GIVEN, NATURE OF ALLOCATION OF FUNDS, ETC WHICH CLEARLY ESTABLISHED THE BUSINESS CONNECTION BETWEEN ASSESSEE AND SHRI KAMLESH KHANCHANANI. (2) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING APPEAL OF THE ASSESSEE ON THE GROUND THAT THERE WAS NO BUSINESS CONNECTION BETWEEN THE AGENT AND NON-RESIDENT IGNORING THE FACT THAT THE AO HAS TREATED THE ASSESSEE AS AN AGENT U/S.163(1) ON THE GROUND THAT THE ASSESSEE WAS TRUSTEE OF THE NON-RESIDENT FOR MANAGING HIS FUNDS AND ACQUIRING A PROPERTY AT DEV COMPLEX. (3) THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THAT THE ADDRESS OF THE NON-RESIDENT IN INDIA WAS 16, NUTAN SOCIETY WHICH WAS THE ADDRESS OF THE ASSESSEE AND ALL THE CHEQUES FROM THE BANK ACCOUNT WERE ISSUED UNDER THE SIGNATURE OF THE ASSESSEE AND HE HELD 'MANDATE' TO OPERATE THE SAID BANK ACCOUNT. (4) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THAT THE ASSESSEE HAS ALSO TAKEN BENEFI T FROM THE TRANSACTION BY WITHDRAWING CASH OF RS.3,00,000/-VIDE CHEQUE NO.559624 DATED 03/01/2005 AND ALSO TRANSFERRED RS.2,00,000/- VIDE CHEQUE NO.559675 DATED 15/01/2005 IN FAVOUR OF NISHI LIGHT SWITH BEING PROPRIETARY CONCERN OF ASSESSEE HIMSELF. (5) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE FACT THAT ASSESSEE ALSO HAD BENEFICIAL INTEREST IN THE PROPERTY . ITA NO.309/AHD/13 A.Y. 05-06 [ITO VS. VIJAY R. THADANI] PAGE 3 (6) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER PASSED U/S.143(3) R.W.S. 254 OF THE ACT GIVING EFFECT TO THE ORDER OF HON'BLE ITAT DATED 27/10/2010. 2. BEFORE US, AT THE OUTSET, LD. AUTHORIZED REPRESENTA TIVE SUBMITTED THAT THE PRESENT APPEAL OF THE REVENUE NE EDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF T HE CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT TH E TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED BY THE AFORESAID CBDT CIRCULAR. 2.1 WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATE RIAL ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENUE, WE PRIMA-FACIE FIND THAT THE TAX EFFECT IN THIS APPEAL IS BELOW RS.10 LACS. AS PER THE ANNOUNCEMEN T OF CENTRAL BOARD OF DIRECT TAXES (CBDT) DATED 10.12.20 15 (CIRCULAR NO. 21 OF 2015), NO DEPARTMENT APPEALS AR E TO BE FILED AGAINST RELIEF GIVEN BY LD. CIT(A) BEFORE THE INCOME TAX TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST EXCEEDS RS. 10 LACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDING APPEALS. IN THE PRES ENT CASE, SINCE IT IS AN UNDISPUTED FACT THAT ON THE ADDITION S WHICH ARE IN DISPUTE, THE TAX EFFECT IS LESS THAN RS. 10 LACS AND IN THE ABSENCE OF ANY MATERIAL ON RECORD BY THE REVENU E TO DEMONSTRATE THAT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY EXEMPTIONS SPECIFIED IN CLAUSE (8) OF THE AFORES AID CBDT CIRCULAR, WE ARE OF THE VIEW THAT THE MONETARY LIMI T ITA NO.309/AHD/13 A.Y. 05-06 [ITO VS. VIJAY R. THADANI] PAGE 4 PRESCRIBED BY THE INSTRUCTIONS OF THE AFORESAID CBD T CIRCULAR WOULD BE APPLICABLE TO THE PRESENT APPEAL OF THE DEPARTMENT AND THEREFORE THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. HOWEVER, IN CASE THERE IS ANY ERROR IN THE COMPUTATION OF THE TAX EF FECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT C IRCULAR IS NOT APPLICABLE, IT WOULD BE OPEN TO THE REVENUE TO SEEK REVIVAL OF THE APPEAL. IN SUCH CIRCUMSTANCES, WE D ISMISS THE APPEAL OF REVENUE WITHOUT EXPRESSING ANY OPINIO N ON MERITS OF THE CASE. 3. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 27 TH DAY OF JULY, 2016. SD/- SD/- (N. K. BILLAIYA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD: 27/07/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE $ %&%'( ) / CONCERNED CIT 4 )- / CIT (A) ,-./00'(1 '( 123& / DR, ITAT, AHMEDABAD 4/5678 / GUARD FILE. BY ORDER / 1 / 2% '( 123&