ACIT, New Delhi V. M/s. Dwarkadish Spinners Ltd., New Delhi

ITA 3229/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1379 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 02-06-2016
• Court: TRIBUNAL

Judgement Text

ITA NOS.- 6870/DEL/2015 AND 3229/DEL/2016. SUMIT KHANEJA AND DWARKADISH SPINNERS LTD. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: B: NEW DELHI) BEFORE SHRI K.N. CHARY, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 6870/DEL/2015 ( ASSESSMENT YEAR: 2012-13) ACIT, CENTRAL CIRCLE -08 (NOW CC- 17), NEW DELHI. VS. SH. SUMIT KHANEJA, H. NO. 2, 23, CENTRAL DRIVE DLF, CHATTARPUR FARMS, NEW DELHI. PAN NO: AGUPK4134F APPELLANT RESPONDENT REVENUE BY : MS. ASHIMA NEB, SR. DR ASSESSEE BY : MS. RIYA GARG, CA DATE OF HEARING : 05/09/2019 ITA NO:- 3229/DEL/2016 ( ASSESSMENT YEAR: 2011-12) ACIT, CIRCLE 7(2), NEW DELHI. VS. M/S DWARKADISH SPINNERS LTD., 1/A-20, MOHAN CO-OPERATIVE INDUSTRIAL ESTATE, MATHURA ROAD, NEW DELHI-110044. PAN NO: AABCD0202D APPELLANT RESPONDENT REVENUE BY : MS. ASHIMA NEB, SR. DR ASSESSEE BY : SHRI RAVI PRATAP MALL, ADV. DATE OF HEARING : 05/09/2019 ITA NOS.- 6870/DEL/2015 AND 3229/DEL/2016. SUMIT KHANEJA AND DWARKADISH SPINNERS LTD. PAGE 2 OF 5 CONSOLIDATED ORDER PER ANADEE NATH MISSHRA, AM (A) THE ABOVE CAPTIONED APPEALS BY REVENUE ARE TAKEN U P TOGETHER FOR THE SAKE OF CONVENIENCE AND BREVITY AND THESE APPEALS ARE HEREB Y DISPOSED OFF THROUGH THIS CONSOLIDATED ORDER; BECAUSE, IN THESE APPEALS THE T AX EFFECT IS LESS THAN THE MONETARY LIMIT FIXED BY THE CENTRAL BOARD OF DIRECT TAXES ( CBDT, FOR SHORT) IN ITS CIRCULAR NO. 17/2019 DATED 08.08.2019. GROUNDS TAKEN IN THESE AP PEALS OF REVENUE ARE AS UNDER: ITA NO.- 6870/DEL/2015 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.54,00,000/- MADE BY AO ON ACCOUNT OF UNEXPLAINED INVESTMENT/EXPENDITURE DISAL LOWANCE ETC OF THE GROUP, WHICH WAS NOT OFFERED IN THE RETURN OF INCOM E FILED FOR THE AY 2012- 13, DESPITE SUBMITTING FILING DECLARATION DURING TH E COURSE OF SEARCH PROCEEDINGS. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.44,30,838/- (ADDITION REDUCED FROM RS.50,00,216/- TO RS.5,69,378/-), MADE BY AO U/S 2( 22)(E) OF THE I.T. ACT, 1961. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN LAW AND ON THE FACTS IN WRONGLY INTEROPERATING THE PROVISIONS OF EXPLANATION 2 OF SECTION 2(22)(E) WHICH MAKES IT VERY CLEAR THAT ACC UMULATED PROFITS INCLUDES PROFITS OF THE COMPANY UP TO THE DATE OF DISTRIBUTI ON/PAYMENT. 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.3,00,000/- WHICH WAS NOT SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME. 5. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.75,000/- MADE BY AO ON ACCOUNT OF UNEXPLAINED MONEY U/S69AOFTHE IT ACT, 1961. 6. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS, (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF TH E HEARING OF THE APPEAL . ITA NOS.- 6870/DEL/2015 AND 3229/DEL/2016. SUMIT KHANEJA AND DWARKADISH SPINNERS LTD. PAGE 3 OF 5 ITA NO.- 3229/DEL/2016 1. LD. CIT(A) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 16,03,306/- MADE BY THE AO ON ACCOUNT OF SELLI NG, GENERAL & ADMINISTRATIVE EXPENSES. 2. LD. CIT(A) ERRED IN LAW AND ON FACTS OF THE CAS E IN DELETING THE ADDITION OF RS. 1,32,72,280/- MADE BY THE AO ON ACCOUNT OF DEP RECIATION CLAIMED. 3. THE APPELLANT CRAVES LEAVE, MODIFY, ADD OR FORE GO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS A PPEAL . (B) AT THE OUTSET, LEARNED SENIOR DEPARTMENTAL REPRESEN TATIVE (LD. DR), FOR SHORT] BROUGHT TO OUR NOTICE, AT THE TIME OF HEARING, THAT TAX EFFECT IN EACH OF THESE APPEALS IS BELOW RS. 50,00,000/-. BOTH SIDES, [REPRESENTATIVE S OF REVENUE AND THE ASSESSEES] WERE IN AGREEMENT, AT THE TIME OF HEARING BEFORE US , THAT THE TAX EFFECT IN EACH OF THESE APPEALS IS BELOW RS. 50,00,000/-. VIDE RECENT CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019 READ WITH EARLIER CBDT CIRCULAR NO. 3 OF 2018, DATED 11.07.2018, MINIMUM THRESHOLD LIMIT OF TAX EFFECT FOR FILING OF APPEALS BY REVENUE IN INCOME TAX APPELLATE TRIBUNAL (ITAT, FOR SHORT) HAS BEEN ENHANCED TO R S. 50,00,000/-. IN A SUBSEQUENT CLARIFICATION ISSUED BY CBDT VIDE F.NO. 279/MISC/M- 93/2018-ITJ, DATED 20/08/2019, IT HAS BEEN CLARIFIED BY CBDT THAT THE AFORESAID REVIS ED MONETARY LIMIT IS ALSO APPLICABLE TO ALL PENDING APPEALS IN ITAT HAVING REGARD TO THE AFORESAID, THE LD. SR. DR FOR REVENUE DID NOT PRESS THE APPEALS. THE LEARNED AUT HORIZED REPRESENTATIVES (ADVOCATE/ CHARTERED ACCOUNTANT) FOR THE RESPECTIVE ASSESSEES ALSO SUBMITTED THAT THE APPEALS WERE NOT MAINTAINABLE IN VIEW OF THE AFORESAID CBDT CIRCULARS DATED 08.08.2019 AND 11.07.2018; AND THE AFORESAID CLARIFICATION DATED 2 0.08.2019 ISSUED BY CBDT. ITA NOS.- 6870/DEL/2015 AND 3229/DEL/2016. SUMIT KHANEJA AND DWARKADISH SPINNERS LTD. PAGE 4 OF 5 THEREFORE, THESE APPEALS ARE DISMISSED BEING NOT PR ESSED AND ALSO BEING NOT MAINTAINABLE HAVING REGARD TO AFORESAID CBDT CIRCUL AR NO. 17/2019 DATED 08.08.2019 READ WITH AFORESAID CBDT CIRCULAR NO. 3 OF 2018 IN THE LIGHT OF AFORESAID CLARIFICATION DATED 20/08/2019. (C) BEFORE LEAVING, WE CLARIFY THAT REVENUE WILL BE AT LIBERTY TO APPROACH INCOME TAX APPELLATE TRIBUNAL U/S 254(2) OF INCOME TAX ACT, 1961 SEEKING RECALL OF THIS ORDER AND, FOR RESTORATION OF THE AP PEAL(S) IF IT IS FOUND THAT ANY APPEAL(S) OF REVENUE ARE/ IS NOT COVERED BY AFORES AID CBDT CIRCULARS DATED 08.08.2019 AND 11.07.2018. (D) IN THE RESULT, BOTH THE APPEALS BY REVENUE ARE DISM ISSED. OUR DECISION WAS ORALLY PRONOUNCED IN THE OPEN COURT AFTER CONCLUSIO N OF HEARING ON THE DATE OF HEARING. NOW, THIS WRITTEN ORDER IS PRONOUNCED IN OPEN COURT ON 11 /9/2019. SD/- SD/- (K.N. CHARY) (ANADEE NATH M ISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 11.09.2019 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NOS.- 6870/DEL/2015 AND 3229/DEL/2016. SUMIT KHANEJA AND DWARKADISH SPINNERS LTD. PAGE 5 OF 5 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER