DCIT, Nainital V. M/s Boat House Club Ltd, Nainital

ITA 3180/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0419 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-02-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 25-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANA
• Assessee Lawyers: SUDHANSHU SRIVASTAVA
• Keywords: Gift; Question of law; Block assessment; Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.3180/DEL/2010 ASSESSMENT YEAR : 2007-08 DY. COMMISSIONER OF INCOME TAX, GOLGHAR, BARA BAZAR, MALLITAL, NAINITAL. VS. M/S BOAT HOUSE CLUB LTD., NAINITAL. PAN : AABCB7593H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SUDHANSHU SRIVASTAVA, ADVOCATE REVENUE BY : MRS. ANUSHA KHURANA, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECT ED AGAINST THE ORDER OF THE CIT (A) DATED 16 TH FEBRUARY, 2010 FOR ASSESSMENT YEAR 2007-08. GROUNDS OF APPEAL READ AS UNDER:- 1. THAT THE LD. CIT (A) HAS ERRED IN LAW & ON FACT S OF THE CASE HOLDING CONTRACT RECEIPT FROM CATERING CONTRACTOR WERE COVERED UNDER THE CONCEPT OF MUTUALITY. 2. LD. CIT (A) HAS ERRED IN RELYING ON THE DECISION OF HONBLE ITAT, DELHI BENCH, NEW DELHI IN ITA NO.4841/DEL/2005, DATED 19.01.2007 WHICH ARE TOTALL Y DIFFERENT FROM THOSE OF THE INSTANT CASE. 3. THAT THE ORDER OF THE LD. CIT (A) IS ERRONEOUS IN LAW & FACTS OF THE CASE IGNORING THE DECISION OF JURISDICTIONAL HIGH COURT NAINITAL IN ASSESSEES OWN CASE IN REFERENCE NO.74 OF 2001 DT. 29.11.2006 & TAKING RELIANCE ON THE JUDGEMENT OF NON-JURISDICTION AL HIGH COURT IN THE CASE OF CIT VS. STANDING CONFERENCE ITA NO.3180/DEL/2010 2 OF PUBLIC ENTERPRISES (2009) 319 ITR 179 (DEL) 2. THE REVENUE IN THE PRESENT APPEAL IS AGGRIEVED BY THE DELETION OF A SUM OF ` 3,90,000/- WHICH IS STATED TO BE A RECEI PT IN THE HANDS OF THE ASSESSEE AS A RENT FROM THE CATERER. THE TAX EFFECT ON SUCH DELETION IS MUCH LESS THAN ` 2 LAC. ACCORDING TO THE C .B.D.T. INSTRUCTIONS NO. 2 DATED 24.10.2005, THE DEPARTMENT SH OULD NOT HAVE FILED THE APPEAL BEFORE THE TRIBUNAL. FOR THIS PURP OSE RELIANCE MAY BE PLACED ON THE DECISION OF ITAT DELHI BENCH IN CASE OF SHRI VIKRAM BHATNAGAR ITA NO. 60/D/2002, ORDER DATED 10-3-2006. 3. IT IS ALSO SEEN THAT RECENTLY THE HONBLE JURISDIC TIONAL HIGH COURT VIDE THEIR ORDER DATED 1.8.2007 IN ITA NO. 683/2007 IN THE CASE OF CIT V. MANISH BHAMBRI HAVE UPHELD THE ORDER OF TRIBUNAL VIDE WHICH THE APPEAL FILED BY THE REVENUE WAS REFUSED TO BE ENTERTA INED BECAUSE OF LOW TAX EFFECT. THE SAID ORDER OF HONBLE JURISDICT IONAL HIGH COURT IS REPRODUCED BELOW FOR THE SAKE OF CONVENIENCE:- THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8TH AUGUS T, 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, DELHI BE NCH 'D' IN IT(SS) NO. 513/DEL/2003 RELEVANT FOR THE BLOCK PERIOD 1ST APRIL, 1990 TO 14TH FEBRUARY, 2001. THE QUESTION THAT AROSE BEFORE THE ASSESSING OFFICER WA S WITH REGARD TO CERTAIN DEPOSITS IN THE BANK ACCOUNT OF THE ASS ESSEE AND SINCE THE AMOUNTS WERE NOT EXPLAINED, TAX WAS LEVIED. IN APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE AND HELD THAT THE EXP LANATION GIVEN BY HIM WAS ACCEPTABLE AND, IN ANY CASE, THE ASS ESSEE CANNOT BE EXPECTED TO RECOLLECT EACH AND EVERY ENTRY MAD E IN THE BANK. IT MAY BE MENTIONED THAT THE AMOUNT IN DISPUTE IS RS.30,00 0/- FOR THE ASSESSMENT YEAR 1999-2000 AND RS.83,000/- FOR THE ASSESSMENT YEAR 2001-2002. IT MAY ALSO BE MENTIONED THA T FOR THE ASSESSMENT YEAR 1999-2000, THE ASSESSING OFFICER HAS ALREADY ACCEPTED THE EXPLANATION WITH REGARD TO A GIFTOFRS.60,000 /-. AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (A PPEALS),- AN APPEAL WAS FILED BEFORE THE INCOME TAX APPELLATE T RIBUNAL. THE ITA NO.3180/DEL/2010 3 TRIBUNAL FOUND THAT IN VIEW OF INSTRUCTIONS ISSUED BY TH E CBDT WHERE THE TAX EFFECT IS LESS THAN RS.L LAC, THE DEPARTMEN T SHOULD NOT FILE AN APPEAL BEFORE THE TRIBUNAL. IN THE PRESENT CASE, THE TAX EFFECT IS LESS THAN RS.L LAC. UNDER THE CIRCUMSTANCES, THE TRIBUNAL DID NOT ENTERTAIN THE APPEAL. THE REVENUE, FEELING AGGRIEVED BY THE DECISION OF THE TRIBUNAL, HAS COME UP BEFORE US UNDER SECTION 260A OF THE INCOM E TAX ACT, 1961. IT IS CONTENDED BY LEARNED COUNSEL FOR THE REVEN UE THAT THE TRIBUNAL IS A FACT FINDING AUTHORITY AND SHOULD HAVE A DJUDICATED THE MATTER ON MERITS. WE ARE OF THE VIEW THAT THE ISSUE RAI SED BY THE REVENUE IS NOT AT ALL SUBSTANTIAL AND THE AMOUNT IN DI SPUTE IS QUITE INSIGNIFICANT, CONSIDERING THAT THE CASE IS ONE OF A BLOCK ASSESSMENT. THERE IS NO JUSTIFICATION FOR THE INCOME TA X DEPARTMENT TO GO ON BURDENING THE TRIBUNAL, THE COURT WITH EVERY CASE RIGHT UP TO THE END. APART FROM BURDENING THE TRIBU NAL AND COURTS, IT ALSO CAUSES AVOIDABLE EXPENSES TO THE ASSESS EE. IT IS COMMON KNOWLEDGE THAT THE ASSESSEE HAS TO PAY FOR LEGAL FEES AND MERELY BECAUSE THE INCOME TAX DEPARTMENT HAS GOT UN LIMITED RESOURCES, THERE IS NO JUSTIFICATION THAT EVERY CASE SH OULD BE DRAGGED ON. UNDER THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE TRIB UNAL WAS JUSTIFIED IN REFUSING TO ENTERTAIN THE APPEAL BECAUSE OF THE INSIGNIFICANT AMOUNT INVOLVED IN THE MATTER. NO SUBSTANTIA L QUESTION OF LAW ARISES. WE, THEREFORE, DISMISS THIS APPEAL. 4. IN VIEW OF ABOVE DISCUSSION THE APPEAL FILED BY THE REVENUE IS DISMISSED BEING UN-ADMITTED ON ACCOUNT OF LOW TAX EFFE CT. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.02.20 11. SD/- SD/- [A.K. GARODIA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 18.02.2011. DK ITA NO.3180/DEL/2010 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES