The ITO, Dhar V. Shri Rajaram Patel HUF, Pithampur

ITA 337/IND/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61968 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 1997-1998
• Appeal Filed On: 07-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARDA
• Assessee Lawyers: ARUN DEWAN
• Keywords: Depreciation; Retrospective amendment; Tax effect; Reassessment proceedings
• Section: 260A; 68; 148

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI R.C. SHARM A, AM ITA NOS. 336 TO 338/IND/2011 A.YS. 1996-97 TO 1998-99 INCOME TAX OFFICER DHAR ::: APPELLANT VS RAJARAM PATEL HUF PITHAMPUR PAN AAJHR 5047R ::: RESPONDENT APPELLANT BY SHRI RAVI SARDA RESPONDENT BY SHRI ARUN DEWAN DATE OF HEARING 26.4.2012 DATE OF PRONOUNCEMENT 27.4.2012 O R D E R PER R.C. SHARMA, ACCOUNTANT MEMBER BY WAY OF THESE APPEALS, THE REVENUE HAS CHALLENGE D THE ORDERS DATED 21.9.2011 OF THE LEARNED CIT(A) FO R THE ASSESSMENT YEARS 1996-97 TO 1998-99. 2 2. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE SHRI RAVI SARDA, ADVOCATE, POINTED OUT THAT THE TAX EFFECT INVOLVED IN THESE APPEALS IS BELOW PRESCRIBED MONET ARY LIMIT AND AS SUCH THESE APPEALS ARE COVERED BY TH E ORDER OF THE TRIBUNAL IN THE CASE OF NATHULAL JAIN IN ITA NO.475/IND/2010 (A.Y. 2006-07), ORDER DATED 29.6.20 11. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON FILE. IN VIEW OF THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION OF THE AFORESAID ORDER DATED 29.6.2011 : - AGGRIEVED BY THE ORDER DATED 3 RD MARCH, 2010 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE I S IN APPEAL ON THE GROUND THAT LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN DELETING THE ADDITION OF RS. 7,85,000/- OUT OF T OTAL ADDITION OF RS. 8,85,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED LOAN CREDIT U/S 68 OF THE ACT WHEREAS THE ASSESSEE HAS FILED THE CROSS OBJECTION ON THE GROUND THAT LEARNED COMMISSIONER O F INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE ACTIO N OF THE ASSESSING OFFICER IN RESPECT OF THE ADDITION OF RS. 1 LAC MAD E U/S 68 OF THE ACT WITHOUT CONSIDERING THE FACTS OF THE CASE AND SUBMI SSIONS MADE BEFORE HIM. 2. DURING HEARING OF THIS APPEAL, THE LD. COUNSEL F OR ASSESSEE CONTENDED THAT THE TAX EFFECT IN THE PRESENT APPEAL IS BELOW THE PRESCRIBED LIMIT, THEREFORE, THE APPEAL OF THE REVE NUE DESERVES TO BE DISMISSED ON THIS COUNT ITSELF BY FURTHER SUBMITTIN G THAT THE TAX EFFECT IS RS. 2,52,450/-, THEREFORE, NO APPEAL CAN BE FILE D BEFORE THE TRIBUNAL WHICH IS HAVING THE TAX EFFECT LESS THAN RS. 3 LACS . THIS FACTUAL MATRIX WAS FAIRLY CONSENTED BY THE LEARNED SR. DR BUT SUBM ITTED THAT THE CIRCULAR OF CBDT IS EFFECTIVE FROM A PARTICULAR DAT E, THEREFORE, THE SUBMISSION OF THE ASSESSEE IS NOT TENABLE. IN REPLY , THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT IDENTICALLY THE HONBLE JUR ISDICTIONAL HIGH COURT HAS HELD THAT IT IS APPLICABLE TO THE APPEALS WHICH ARE PENDING BEFORE THE TRIBUNAL AND PLACED RELIANCE UPON THE DE CISION IN CIT V. 3 ASHOK KUMAR MANIBHAI PATEL & COMPANY (2009) 317 ITR 386 (MP), ITO VS. M/S LAXMI JEWELS PRIVATE LIMITED (ITA NO. 2165/ MUM/2010). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON FILE. UNDISPUTEDLY, THE TAX EFFECT IN THE PRESENT APPEAL IS BELOW THE PRESCRIBED MONETARY LIMIT IN FI LING THE APPEAL BEFORE THE TRIBUNAL. THEREFORE, WE ARE REPRODUCING HEREUND ER THE DECISION OF THE TRIBUNAL IN THE CASE OF RAJAN CLOTH STORES (ITA NO. 365/IND/2010) ORDER DATED 31.5.2011 :- THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, INDORE, DATED 4.3.2010 ON THE GROUND THAT THE LD. C IT(A) ERRED IN OVERLOOKING THE PROVISION OF SEC. 275(1A) OF I.T. A CT AND DELETING PENALTY U/S 271(1)(C) FOR RS.2,32,780/-. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I PRADEEP KUAMR MITRA, LD. SR. DR FOR THE REVENUE AND SHRI S. S. DESHPANDE, LD. COUNSEL FOR THE ASSESSEE. AT THE OUTSET, THE LD. CO UNSEL FOR THE ASSESSEE SUBMITTED THAT THE TAX EFFECT IN THE PRESENT APPEAL IS BELOW PRESCRIBED MONETARY LIMIT, THEREFORE, STRAIGHT WAY, THE APPEAL OF THE REVENUE MAY BE DISMISSED. THE LD. SR. DR FAIRLY ADMITTED THAT T HE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION, ON THE ISSUE OF TAX EFFEC T, THE BENCH IN THE CASE OF ACIT VS. M/S. SHRIRAM NUTRIENTS LTD. IN ITA NO.123/IND/2010 (A.Y. 2002-03) VIDE ORDER DATED 28.10.2010 HELD A S UNDER: THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER O F THE LEARNED CIT(A)-UJJAIN, DATED 16.12.2009 ON THE GROUND WHETH ER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN TREA TING THE ASSESSMENT MADE BY THE A.O. AS INFRUCTUOUS, WITHOUT APPRECIATI NG THE FACT THAT OTHERWISE ON 6.3.2006 (THE DATE OF ISSUE OF NOTICE) THE A.O. WAS EMPOWERED TO ISSUE NOTICE U/S 148 FOR THE A.Y. 2002 -03, IN VIEW OF THE PROVISIONS OF SECTION 149(1)(A) READ WITH SECTION 1 51(1) OF THE IT ACT, 1961? 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I S.S. DESHPANDE, LD. COUNSEL FOR THE ASSESSEE AND SHRI P. K. MITRA, LEARNED SENIOR DR. THE CRUX OF ARGUMENT IS THAT THE TAX EFF ECT IN THE PRESENT APPEAL IS BELOW MONETARY PRESCRIBED LIMIT, THEREFOR E, STRAIGHT WAY THE APPEAL OF THE REVENUE MAY BE DISMISSED. THE LD. SR. DR SHRI P.K. MITRA FAIRLY ADMITTED THAT THE TAX EFFECT IS BELOW PRESCR IBED MONETARY LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT APPEAL, THE INCOME ASSESSED IS RS.1,37,880/- AND TH E TAX INVOLVED IS RS.40,611/- ONLY, THEREFORE, WITHOUT GOING INTO MER ITS OF THE CASE ON THE PRIMARY OBJECTION OF MONETARY LIMIT, THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. OUR VIEW IS SUPPORTED BY THE DECISION OF THE TRIBUNAL IN HIMANSHU FLOUR MILLS (ITA NO.506/IND/2009, ORDER DA TED 26.5.2010). THE RELEVANT PORTION OF THE SAME IS REPRODUCED HERE UNDER: 4 THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 26.8.2009 ON THE GROUND THAT THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 5,46,831/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON FIXED ASSETS AND ALSO IN DIRECTING THE ASSESSING OFFICER TO ALLOW CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EA RLIER YEARS. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD THE LEARNED COUNSELS FROM BOTH THE SIDES AND CONSIDERED THE ARG UMENTS ADVANCED BY THEM. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSES SEE RAISED A PRELIMINARY OBJECTION THAT SINCE THE TAX EFFECT IS BELOW THE PRESCRIBED MONETARY LIMIT, THEREFORE, THE DEPARTMENT IS NOT PE RMITTED TO FILE THIS APPEAL AND THE SAME DESERVES TO BE DISMISSED ON THI S SHORT GROUND ITSELF. HOWEVER, THE LEARNED SR. DR FAIRLY AGREED T HAT THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. IN VIEW OF THE ABOVE ASSERTION OF THE LEARNED RESPECTIVE COUNSELS, WE ARE OF THE CONSIDERED OPINION THAT THIS APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. OUR VIEW FINDS SUPPORT FROM THE DECISION DATED 2 ND DECEMBER, 2009 OF THE TRIBUNAL IN THE CASE OF HIMANSHU FLOOR MILLS (ITA NO. 507/IND/2009). THE RELEVANT PORTION OF THE SAME IS REPRODUCED HEREUNDER :- THIS APPEAL IS BY THE REVENUE CHALLENGING THE ORD ER OF THE CIT(A) DATED 26.8.2009. DURING HEARING OF THIS APPEAL, I HAVE HEARD SMT. APARNA KARAN, LEARNED SENIOR DR, AND NO-BODY WAS PR ESENT FOR THE ASSESSEE. REGISTERED NOTICE OF HEARING WAS SENT TO THE ASSESSEE ON 11.11.2009. THE ASSESSEE NEITHER PRESENTED ITSELF NOR MOVED ANY APPLICATION FOR ADJOURNMENT, THEREFORE, I HAVE NO O PTION BUT TO PROCEED EX- PARTE QUA THE ASSESSEE AND DISPOSE OF THIS APPEAL O N THE BASIS OF MATERIAL AVAILABLE IN THE FILE. 2. THE FIRST GROUND RAISED IS THAT THE LEARNED FIRS T APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF RS.4,26,936/- MAD E ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON THE FIXED ASSETS. ON QUESTIONING FROM THE BENCH ABOUT THE TAX EFFECT, IT WAS FAIRLY POINT ED OUT THAT THE TAX EFFECT IS BELOW THE PRESCRIBED MONETARY LIMIT. I HAVE CON SIDERED THE SUBMISSIONS PUT-FORTH BY THE LEARNED SENIOR DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. BRIEF FACTS ARE THAT THE ASSESSEE CLAIMED DEPREC IATION OF RS. 8,53,871/- ON THE FIXED ASSETS. THE LEARNED ASSESS ING OFFICER BASED UPON THE COMMENTS OF THE AUDITORS IN THE NOTES TO A CCOUNTS AND THE NATURE OF THE BUSINESS, DISALLOWED 50% OF THE DEPRE CIATION CLAIMED BY THE ASSESSEE WHICH WAS WORKED OUT AT RS.4,26,936/-. BEFORE THE LEARNED FIRST APPELLATE AUTHORITY THE SUBMISSION OF THE ASSESSEE WAS THAT THE FIXED ASSETS WERE DULY REFLECTED IN THE BALANCE SHEET DURING THE RELEVANT PERIOD AND THERE WAS NO NEW ADDITION IN TH E ASSETS. THE DEPRECIATION ON ALL THE ASSETS WAS REGULARLY ALLOWE D SINCE THE DATE OF INCLUSION IN THE BALANCE SHEET. EVEN IN THE IMPUGN ED ORDER THERE IS A FACTUAL FINDING THAT THE ASSESSEE FROM THE DATE OF INCLUSION HAS NOT SHOWN IN ADDITION TO THE BLOCK OF ASSETS AS THE WDV AS ON 31.3.2002 WAS TAKEN AS BASIS AFTER REDUCING THE SALE OF SOME ASSETS FOR THE 5 CALCULATION OF ALLOWABLE DEPRECIATION FOR THE ASSES SMENT YEAR 2003-04 AND THE ASSESSEE WAS ALLOWED DEPRECIATION FOR THE A SSESSMENT YEAR 2002-03. THE REVENUE HAS NOT ADDUCED ANY EVIDENCE CONTROVERTING THE FACTUAL FINDING MENTIONED IN THE IMPUGNED ORDER, TH EREFORE, THE DISALLOWANCE IS DESIRABLE IN THE IMPUGNED APPEAL. EVEN OTHERWISE ON THE TAX EFFECT THIS APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. THIS VIEW FINDS SUPPORT FROM THE DECISION OF THE TRIBUNA L IN THE CASE OF R.K. HOTELS (ITA NO.383/IND/09). THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUNDER :- THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER O F LD. CIT-(A)-II, BHOPAL, DATED 31.3.2009 FOR THE AY 2005-06 ON THE G ROUND THAT THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADD ITION OF 6,37,206/- MADE BY THE AO BY APPLYING THE PROVISIONS OF SEC. 154(3) ON ACCOUNT OF INCORRECTNESS AND INCOMPLETENESS OF BOOKS OF ACCOUN T.. 2. DURING HEARING OF THE APPEAL, WE HAVE HEARD SMT. APARNA KARAN, LD. SR. DR AND SHRI H.P. VERMA ALONG WITH SHRI ASHI SH GOYAL, LD. COUNSEL FOR ASSESSEE. AT THE OUTSET, IT WAS POINTED OUT THAT THERE IS TYPOGRAPHICAL ERROR IN MENTIONING THE FIGURE OF RS. 6,37,206/- IN THE GROUND OF APPEAL AS THE CORRECT FIGURE IS RS.3,94,7 32/-. THE ASSERTION OF THE ASSESSEE WAS CONSENTED TO BE CORRECT BY THE LD. SR. DR. FURTHER, IT WAS POINTED OUT THAT THE TAX EFFECT IS ALSO BELOW M ONETARY LIMIT, THEREFORE, THE APPEAL OF THE REVENUE MAY BE DISMISS ED. THE LD. SR. DR FAIRLY AGREED TO THE SUBMISSION OF THE ASSESSEE TO THE EXTENT THAT THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT FOR FILIN G THE APPEAL BEFORE THE TRIBUNAL. S.NO. AUTHORITY MONETARY LIMIT (IN RS.) 1 I.T.A.T. 2,00,000/- 2 APPEAL UNDER SECTION 260A BEFORE HIGH COURT 4,00,000/- 3 SUPREME COURT 10,00,000/- THE BOARD FURTHER CLARIFIED THE TAX EFFECT, WHICH M EANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSE SSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE, HAD SUCH T OTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESP ECT OF THE ISSUE AGAINST WHICH APPEAL IS INTENDED TO BE FILED. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON. IN CASES OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAI NST. IN THE PRESENT APPEAL, THE TOTAL DISPUTED ADDITION IS RS. 3,94,732/-, THEREFORE, AS AGREED/CANVASSED BY LD. REPRESENTATIV ES FROM BOTH SIDES, THE TAX EFFECT IS BELOW RS.2 LAKHS, THE LIMIT 6 PRESCRIBED FOR FILING APPEAL BEFORE THE TRIBUNAL, T HEREFORE, APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. OU R VIEW FINDS SUPPORT FROM THE DECISION OF THE CHANDIGARH B ENCH OF THE TRIBUNAL IN THE CASES OF SHRI J.S. LUTHRA (ITA NO.7 12 TO 715/CHD/2009) AND ITO, WARD 2(2), ROPAR VS. THE JHA LLIAN KALAN PRI. COOP MILK PRODUCE SOCIETY LTD., JHALLIAN KALAN DISTT. ROPAR (ITA NO.721/CHD/2009). THEREFORE, WITHOUT GOI NG INTO THE MERITS OF THE CASE, FACTS AND THE JUDICIAL PRON OUNCEMENTS (SUPRA), THIS APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES ON 6.10.2009. IN THE LIGHT OF THE ABOVE, THIS GROUND OF THE REVEN UE IS HAVING NO MERIT, THEREFORE, THE STAND OF THE LEARNED CIT(A ) IS AFFIRMED CONSEQENTLY, THIS GROUND OF THE REVENUE IS DISMISSE D. 4. THE NEXT GROUND RAISED IS THAT THE LEARNED FIRST APPELLATE AUTHORITY ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS WITHOUT ANY BASIS. THE CONTENTION RAISED ON BEHALF OF THE REVE NUE IS THAT IN COMING TO A PARTICULAR CONCLUSION, NO BASIS HAS BEE N ADDUCED BY THE LEARNED FIRST APPELLATE AUTHORITY AND IT WAS RIGHTLY DISALLOWED BY THE ASSESSING OFFICER IN THE ABSENCE OF PROOF FURNISHED BY THE ASSESSEE. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. THE STAND OF THE REV ENUE IS THAT PROOF OF LAST YEARS LOSSES WAS NOT FURNISHED BY TH E ASSESSEE CONSEQUENTLY THESE ARE NOT ALLOWABLE WHEREAS BEFORE THE LEARNED FIRST APPELLATE AUTHORITY THERE IS A FACTUA L FINDING THAT IN ALL PREVIOUS YEARS RETURNS WERE DULY FILED BY T HE ASSESSEE AND THE SAME WERE AVAILABLE ON RECORD OF THE ASSESS ING OFFICER. IN THE IMPUGNED ORDER THE LEARNED FIRST AP PELLATE AUTHORITY HAS DIRECTED THE ASSESSING OFFICER TO ALL OW CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS WHICH WERE NOT SET OFF AFTER VERIFICATION OF RECORDS OF EARLIE R YEARS. EVEN OTHERWISE, IT IS A CASE OF ASSESSED LOSS WHICH HAS NOT BEEN SET OFF. CONSEQUENTLY, WE ARE IN AGREEMENT THAT IN VIE W OF THE PROVISIONS OF SECTION 72 IT SHOULD BE ALLOWED. CON SEQUENTLY, THERE IS NO GRIEVANCE TO THE REVENUE SINCE IT HAS B EEN REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER TO DO THE NEEDFUL AFTER VERIFICATION OF RECORDS OF EARLIER YE ARS. MY VIEW FINDS SUPPORT FROM THE RATIO LAID DOWN IN CIT V. J. H. GOTLA; 156 ITR 323 (SC); TARA DEVI BEHL V. CIT; 218 ITR 5 41 (P&H). THE HONBLE APEX COURT IN THE CASE OF CIT V. MAHALA XMI SUGAR MILLS CO. LTD.; 160 ITR 920 EVEN WENT TO THE EXTEN T THAT ITO MUST ALLOW SET OFF EVEN IF IT IS NOT CLAIMED BY THE ASSESSEE BECAUSE A DUTY IS CAST UPON THE ITO TO APPLY THE RE LEVANT PROVISIONS OF THE INDIAN INCOMETAX ACT FOR THE PURP OSE OF DETERMINING THE TRUE FIGURE OF ASSESSEES TAXABLE I NCOME AND THE CONSEQUENTIAL TAX LIABILITY. MERELY BECAUSE THE ASSESSEE FAILS TO CLAIM THE BENEFIT OF SET OFF CANNOT RELIEV E THE ITO OF HIS 7 DUTY TO APPLY SECTION 72 IN AN APPROPRIATE CASE. I N VIEW OF THESE FACTS AND JUDICIAL PRONOUNCEMENTS, I HAVE FOU ND NO INFIRMITY IN THE IMPUGNED ORDER, CONSEQUENTLY, THIS GROUND OF THE REVENUE ALSO FAILS. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF HEARING ON 1.12.2009. IN THE AFORESAID CASE, THE TRIBUNAL HAS PASSED A DE TAILED ORDER, THEREFORE, WITHOUT GOING INTO THE MERITS OF THE CASE AND RESPECTFULLY FOLLOWING THE AFORESAID DECISION, THIS APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 26 TH MAY, 2010. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 28.10.2010. 4. HOWEVER, THE CBDT VIDE INSTRUCTION NO.3/2011 DAT ED 9.2.2011 REVISED/RAISED THE MONETARY LIMIT FOR FILI NG THE APPEAL BY THE DEPARTMENT AS UNDER: S.NO. AUTHORITY MONETARY LIMIT (IN RS.) 1 ITAT 3,00,000/- 2 APPEAL UNDER SECTION 260A BEFORE HIGH COURT 10,00,000/- 3 SUPREME COURT 25,00,000/- THE ABOVE INSTRUCTIONS ARE APPLICABLE TO THE APPEAL S FILED ON OR AFTER 9.2.2011, ISSUED U/S 268A(1) OF THE I.T. ACT, 1961. AS FAR AS THE MERIT OF THE CASE IS CONCERNED, IT HAS ALREA DY BEEN EXAMINED BY THE LD. CIT(A) BY KEEPING THE PROVISION S OF SEC. 275(1)(A) OF THE ACT. SINCE THE APPEAL OF THE ASSES SEE WAS DECIDED BY THE LD. CIT(A) VIDE ORDER DATED 4.11.200 4, CONSEQUENTLY, THE PENALTY PROCEEDINGS WERE SUPPOSED TO BE DISPOSED OF BY 31.3.2006 WHEREAS THE SAME WAS DECID ED VIDE ORDER DATED 22.4.2009. IN VIEW OF THIS FACT, THE OR DER WAS 8 RIGHTLY QUASHED, CONSEQUENTLY, WE FIND NO INFIRMITY IN THE STAND OF THE LD. CIT(A). THE SAME IS UPHELD. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 31.5.2011. IDENTICALLY THE BENCH IN THE CASE OF VINOD BANSAL, ITA NO. 275/IND/2010 VIDE ORDER DATED 22.6.2011 DISMISSED T HE APPEAL OF THE REVENUE ON THE ISSUE OF TAX EFFECT. THE HONBLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF CIT V. ASHOK KUMAR MANIBHAI & COMPAN Y (2009) 317 ITR 386 HELD AS UNDER :- THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF T HE FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, THE ASSESSEE ON THE FILE OF T HE DEPARTMENT HAVE BEEN INCREASED CONSEQUENTLY, THE BURDEN ON THE DEPA RTMENT HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW O F THE MATTER, THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFE RENCES IF THE TAX EFFECT LESS THAN RS. 2 LAKHS. THE SAME POLICY FOR OLD MATT ERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOARD S CIRCULAR DATED MARCH 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFI ED IN PROCEEDING WITH THE OLD REFERENCE WHEREIN THE TAX IMPACT IS MINIMAL . THUS, THERE IS NO JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCE S HAVING NEGLIGIBLE TAX EFFECT. 4. VIDE BOARD INSTRUCTION NO. 5/2008 DATED 15.5.200 8 THE MONETARY LIMIT AND OTHER CONDITIONS FOR FILING THE APPEAL OF THE DEPARTMENT (IN INCOME TAX MATTERS) BEFORE THE APPEL LATE TRIBUNAL, HIGH COURT AND SUPREME COURT WAS SPECIFIED. HOWEVER, IN SUPPRESSION OF THESE INSTRUCTIONS, VIDE INSTRUCTION NO. 3/2011 DAT ED 9.2.2011 THE BOARD INCREASED THE MONETARY LIMIT AS DISCUSSED ABO VE (TABLE). THE TRIBUNAL (MUMBAI BENCH) IN THE CASE OF M/S LAXMI J. JEWEL PRIVATE LIMITED (ITA NO. 2165/MUM/2010) BY FOLLOWING THE DE CISION IN THE CASE OF HONBLE BOMBAY HIGH COURT IN CIT V. MADHUKAR K. INAMDAR (HUF) WHEREIN IT WAS HELD THAT THE CIRCULAR WILL BE APPLI CABLE TO THE CASES PENDING BEFORE THE COURT EITHER FOR ADMISSION OR FO R FINAL DISPOSAL AND HELD THAT INSTRUCTION NO. 3 DATED 9.2.2011 IS APPLI CABLE FOR THE APPEAL PREFERRED BY THE REVENUE AND DISMISSED THE SAME ON TAX EFFECT BY FURTHER CONSIDERING THE DECISION IN THE CASE OF LIV ING STONES JEWELLERY PRIVATE LIMITED VS. DCIT; 31 SOT 323. RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS, WE DISMISS THE APPEAL OF THE R EVENUE ON THE ISSUE OF TAX EFFECT/MONETARY LIMIT. 4. IN THESE CASES, THE BRIEF FACTS ARE THAT ORIGINA LLY THE RETURN OF INCOME WAS FILED BY THE ASSESSEE IN THE S TATUS OF INDIVIDUAL WHEREIN THE ASSESSING OFFICER ASSESSE D THE 9 INCOME OF THE ASSESSEE U/S 143(3)/148 OF THE ACT. AGAINST THIS ASSESSMENT, ALL THE ASSESSEES FILED AP PEALS BEFORE THE LEARNED CIT(A), WHO QUASHED THE ASSESSME NT PROCEEDINGS ON THE PLEA THAT 143(2) NOTICE WAS NOT ISSUED WITHIN THE STATUTORY TIME LIMIT OF ONE YEAR FROM THE END OF THE MONTH IN WHICH THE RESPECTIVE RETURN S OF INCOME WERE FILED. HOWEVER, THE LEARNED CIT(A) ALSO OBSERVED THAT THE INCOME OF ALL THESE ASSESSEES IS TO BE ASSESSED IN THE HANDS OF HUF AND NOT IN THE HANDS O F INDIVIDUAL AND THEREBY DIRECTED THE ASSESSING OFFIC ER TO INITIATE THE REASSESSMENT PROCEEDINGS OF THEIR RESP ECTIVE HUFS. AGAINST THIS ORDER OF THE CIT(A), THE REVENU E WAS IN APPEAL BEFORE THE TRIBUNAL AND THE ASSESSEE HAS ALSO FILED CROSS OBJECTION. THE TRIBUNAL VIDE ITS ORDE R DATED 12 TH DECEMBER, 2006 HELD THAT IN VIEW OF RETROSPECTIVE AMENDMENT TO THE PROVISIONS OF SECTION 148 OF THE A CT, THE CIT(A) WAS NOT JUSTIFIED IN QUASHING THE ASSESS MENT ON THE GROUND OF ISSUE OF NOTICE U/S 143(2) WITHIN THE STATUTORY PERIOD OF ONE YEAR. ACCORDINGLY, THE MAT TER WAS 10 RESTORED TO THE FILE OF THE CIT(A) WITH THE DIRECTI ON TO REDECIDE THE APPEALS OF THE ASSESSEE ON MERITS ON A LL THE GROUNDS RAISED BY THE RESPECTIVE ASSESSEES. WITH R ESPECT TO THE CROSS OBJECTION FILED BY THE ASSESSEE, THE T RIBUNAL HELD THAT SINCE THE ORDER OF THE CIT(A) IS SET ASID E IN WHOLE AND THE MATTER IN ISSUE IS RESTORED TO THE FI LE OF THE CIT(A), THE APPREHENSION OF THE LEARNED COUNSEL FOR THE ASSESSEE IS MISPLACED. IT WAS FURTHER OBSERVED THA T THE MOMENT THE ENTIRE ORDER OF CIT(A) IS SET ASIDE BECA USE OF THE INSERTION OF THE AMENDMENT U/S 148 OF THE ACT, THE OBSERVATION AND FURTHER DIRECTIONS OF THE CIT(A) WO ULD ALSO BE DEEMED TO BE SET ASIDE AND WOULD NO LONGER SURVIVE. 6. HOWEVER, AFTER THE ORDER OF THE CIT(A) IN THE F IRST ROUND, THE ASSESSING OFFICER INITIATED REASSESSMENT PROCEEDINGS AGAINST THE HUF AND ASSESSED THE INCOME IN THE HANDS OF HUF. BY THE IMPUGNED ORDER, THE CIT(A ) HELD THAT IN VIEW OF THE ORDER OF THE TRIBUNAL DATE D 11 12.12.2006, THE ORDER OF THE CIT(A) DOES NOT HAVE A NY LEGS TO STAND AND ACCORDINGLY THE ASSESSING OFFICER WAS NOT JUSTIFIED IN INITIATING THE PROCEEDINGS U/S 148 OF THE ACT AGAINST THE HUF OF RESPECTIVE ASSESSEES. AGAINS T THIS ORDER OF THE CIT(A), THE REVENUE IS IN FURTHER APPE AL BEFORE US. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. IT IS QUITE CLEAR FROM THE ORDER OF THE TRIBUNAL DATED 12 TH JULY, 2006 THAT THE APPELLATE ORDER PASSED BY THE CIT(A) WAS SET ASIDE TO HIS FILE. CONSEQUENT TO SUCH SET ASIDE OF CIT(A)S ORDER BY THE I.T.A.T., THE DIRECTIONS GIVE N BY THE CIT(A) TO INITIATE REASSESSMENT PROCEEDINGS AGAINST THE HUFS, THE SAME HAS ALSO NO LEGS TO STAND. THUS, TH E ASSESSING OFFICER WAS NOT JUSTIFIED IN INITIATING T HE REASSESSMENT PROCEEDINGS AGAINST THE HUF IN VIEW OF THE DECISION OF THE TRIBUNAL DATED 12 TH DECEMBER, 2006. 12 ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE CIT(A) IN HOLDING AS UNDER :- IN VIEW OF SUCH CATEGORICAL FINDINGS OF HON'BLE I.T.A.T., THE VERY BASIS AND FOUNDATION OF INITIATI ON OF ASSESSMENT PROCEEDINGS IN THE CASE OF ASSESSEE/APPELLANT, BY ISSUE OF NOTICE U/S 148 ON 28.7.2004, DO NOT SURVIVE AND ACCORDINGLY THE ASSESSMENT ORDERS ARE HEREBY LIABLE TO BE QUASHED AND ARE SO ACCORDINGLY QUASHED. 8. EVEN ON THE GROUND OF TAX EFFECT, WE FIND THAT T HE APPEALS OF THE REVENUE ARE NOT MAINTAINABLE FOR THE ASSESSMENT YEARS 1996-97 AND 1998-99 WHEREIN AS PER THE ORDER OF THE CIT(A) THE TAX EFFECT FOR WHICH RE LIEF HAS BEEN GIVEN BY THE CIT(A) WORKS OUT TO BE RS. 1,47,0 00/- AND RS. 1,01,300/-, RESPECTIVELY. HOWEVER, IN THE ASSESSMENT YEAR 1997-98 THE TAX EFFECT WORKS OUT TO BE RS. 3,82,302/-. IN VIEW OF OUR OBSERVATIONS ON MER ITS OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND UPHOLD THE SAME. 9. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED. 13 ORDER PRONOUNCED IN OPEN COURT ON 27.4.2012 SD/- SD/- (JOGINDER SINGH) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER APRIL 27, 2012 DN/-