1 INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 337/PN/2010 (ASSESSMENT YEAR 2006-07) DY. COMMISSIONER OF INCOME TAX, CIRCLE-3, MALEGAON .. APPELLANT VS. M/S. VYANKATESH & CO., GAGANGIRI COMPLEX, CAMP ROAD, MALEGAON, DIST NASHIK PAN NO.AAFFV 0638J .. RESPONDENT ASSESSEE BY : SRI SUNIL GANOO DEPARTMENT BY : SRI ALOK MISHRA DATE OF HEARING : 27-08-2012 DATE OF PRONOUNCEMENT : 29-08-2012 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 11-12- 2009 OF THE CIT(A)-II, NASHIK RELATING TO ASSESSMEN T YEAR 2006-07. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. THE CIT(A) ERRED IN NOT APPRECIATING THE FACTS OF THE CASE LEADING TO ADDITIONS MADE BY THE ASSESSING OFFICER. 2. THE CIT(A) ERRED IN NOT APPRECIATING THE FACT TH AT ASSESSEE HAD DECLARED WORK IN PROGRESS OF THE MAHALAXMI HOUSING COMPLEX TO THE TU NE OF RS.96,15,610/- AGAINST WHICH ASSESSEE HAD DECLARED RS.91,09,840/- LEAVING UNDISCLOSED AMOUNT OF RS.5,05,800/- PERTAINING TO A.Y. 2006-07. 3. THE CIT(A) THEREFORE, ERRED IN DELETING THE ENTI RE ADDITION MADE BY THE AO ON THE BASIS OF WORK IN PROGRESS TILL 2006-07. 4. THE CIT(A) ERRED IN DELETING THE ADDITION OF RS. 2,49,204/- MADE BY THE AO AS UNDISCLOSED INCOME THROUGH DECLARED VOLUNTARILY BY THE ASSESSEE AT THE TIME OF SURVEY FOR A.Y. 2006-07. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTS ET REFERRING TO THE GROUNDS FILED BY THE REVENUE SUBMITTED THAT THE REVENUE HAS BASICALLY CHALLENGED THE DELETION OF RS. 7,55,004/- (RS.5,05,800/- + RS. 2,4 9,204/-). THE TAX EFFECT ON THE 2 GROUNDS RAISED BY THE REVENUE IS LESS THAN RS. 3 LA KHS. THEREFORE, IN VIEW OF THE LATEST CBDT INSTRUCTION NO.3 DATED 09-02-2011 AS WE LL AS DECISIONS OF THE COORDINATE BENCHES OF THE TRIBUNAL AND THE JURISDIC TIONAL HIGH COURT THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. THE LEARN ED DR COULD NOT CONTROVERT THE ABOVE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASS ESSEE. 4. IN THE LIGHT OF THE RECENT GUIDELINES OF CBDT TH AT APPEAL IN THOSE CASES WHERE THE TAX EFFECT IS LESS THAN RS.10 LAKHS ARE N OT TO BE ENTERTAINED, THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DELHI RACE CLUB LTD. DISMISSED THE APPEAL PREFERRED BY THE REVENUE HAVING TAX EFFECT BELOW RS . 10 LACS. THE HONBLE DELHI HIGH COURT FOLLOWING ITS EARLIER DECISION IN THE CA SE OF CIT V/S. M/S. P.S. JAIN & CO. (ITA NO. 179/1991 DECIDED ON 2 ND AUGUST 2010) HAS BEEN PLEASED TO HOLD THAT SUCH CIRCULAR WOULD ALSO APPLY TO PENDING CASES. H ONBLE DELHI HIGH COURT IN THE CASE OF CIT V/S. M/S. P.S. JAIN & CO. (SUPRA) HAS B EEN PLEASED TO DISMISS THE REFERENCE APPLICATION HAVING TAX EFFECT OF RS.1,80, 000/- FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S. P ITHWA ENGINEERING WORKS (2005), 276 ITR 519 (BOM) AND HONBLE M.P. HIGH COU RT IN THE CASE OF CIT V/S. ASHOKKUMAR MANIBHAI PATEL & CO., 317 ITR 386 (M.P.) . 5. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CAS E OF CIT V/S. PITHWA ENGINEERING WORKS (SUPRA) IN PARA NO.6, HAS EXPRESS ED FOLLOWING VIEW AT PAGE NO. 520 : 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 EXPENS ES HAS GONE UP, THE ASSESSES ON THE FILE OF THE DEPARTMENTS HAVE BEEN INCREASED CONSEQUENTLY , THE BURDEN ON THE DEPARTMENT HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDO RS OF THE SUPERIOR COURTS ARE CHOCKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MA TTE, THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT L ESS THAN RS.2 LAKHS.THE SAME POLICY FOR OLD MATTERS NEED TO BE ADOPTED BY THE DEPARTMENT. IN OU R VIEW, THE BOARDS CIRCULAR DATED MARCH 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROC EEDING WITH THE OLD REFERENCES WHEREIN 3 THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIF ICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX EFFECT. IN VIEW OF THESE DECISIONS, INCLUDING DECISION OF H ONBLE JURISDICTIONAL HIGH COURT, WE COME TO THE CONCLUSION THAT CBDT GUIDELINES FOR THE REVENUE NOT TO PREFER APPEAL AGAINST FIRST APPELLATE ORDER BEFORE THE TRI BUNAL HAVING TAX EFFECT UPTO RS. 3 LACS IS VERY MUCH APPLICABLE EVEN IN PENDING APPEAL S. IN THE CASE OF CIT V/S. MADHUKAR K. INAMDAR (HUF) (SUPRA), THE HONBLE JURI SDICTIONAL HIGH COURT HAS BEEN PLEASED TO HOLD AGAIN THAT CBDT CIRCULAR DT.15 TH MAY 2008 WOULD BE VERY MUCH APPLICABLE TO THE PENDING CASES REQUIRING DEPA RTMENT TO WITHDRAW THE CASES WHEREIN TAX EFFECT IS LESS THAN THE PRESCRIBED MONE TARY LIMITS. THE HONBLE HIGH COURT HAS BEEN FURTHER PLEASED TO HOLD THAT EVEN IF THE QUESTION OF LAW IS OF RECURRING NATURE, EVEN THEN THE REVENUE IS NOT EXPE CTED TO FILE APPEALS IN SUCH CASES, IF THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT FIXED BY THE CBDT. 6. RESPECTFULLY FOLLOWING THESE DECISIONS INCLUDING DECISIONS OF HONBLE BOMBAY HIGH COURT CITED (SUPRA) HAVING BINDING EFFE CT ON THE TRIBUNAL, WE HOLD THAT THIS APPEAL HAVING MONETARY IMPACT BELOW RS. 3 LACS IS NOT MAINTAINABLE AS THE APPEAL PREFERRED BY THE REVENUE IS IN VIOLATION OF THE ABOVE STATED GUIDELINES OF THE CBDT. ACCORDINGLY, WE DISMISS THE APPEAL FI LED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 29 TH DAY OF AUGUST, 2012. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: THE 29 TH AUGUST 2012 SATISH 4 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT-II, NASHIK 4. ACIT, RANGE-3, NASHIK 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE