ITO, New Delhi V. M/s. Nirvan Clothing Company Limited, New Delhi

ITA 3641/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7834 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 02-05-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 18-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KR GUPTA
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.L.P.SAHU, ACCOUNTANT MEMBER I.T.A .NO.-3641/DE L/2014 (ASSESSMENT YEAR-2006- 07) ITO, WARD-13(3), NEW DELHI (APPELLANT) VS NIRVAN CLOTHING COMPANY LTD., THE PRINCIPAL OFFICER, M/S NIRWAN CLOTHING CO.LTD., 2/2, WHS, KIRTI NAGAR, NEW DELHI-110015. PAN-AAACN2430N (RESPONDENT) APPELLANT BY SH.MANOJ KR. GUPTA, SR.DR RESPONDENT BY SH. AMAN GOEL, CA ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AS SAILING THE CORRECTNESS OF THE ORDER DATED 25.03.2014 OF CIT(A)-XVI, DELHI PERTAINING TO 2006-07 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,27,856/- MADE BY THE AO ON ACCOUNT OF PRODUCT DEVELOPMENT EXPENSES BY TREATI NG THE SAME AS REVENUE IN NATURE IGNORING THE FACT THAT THE EXPENS ES ARE OF ENDURING NATURE AND ASSESSEE WOULD TAKE BENEFIT OF THESE EXP ENSES IN SUBSEQUENT YEARS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4,98,439/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF SETTING OFF B/F LOSSES W ITH INTEREST INCOME ON FDR IGNORING THE FACT THAT INTEREST ON FDR COMES UN DER THE HEAD INCOME FROM OTHER SOURCES. 3. THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FRESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL . 2. CONSIDERING THE AMOUNT AT STAKE FOR THE REVENUE, BOTH THE PARTIES WERE REQUIRED TO ADDRESS CIRCULAR NO.21/2015 DATED 10TH DECEMBER, 2015 OF CBDT. CONSIDERING THE SAME IN THE FACTS ON RECORD, THE LD . SR. DR FAIRLY CONCEDED THAT DATE OF HEARING 02.05.2016 DATE OF PRONOUNCEMENT 05.05.2016 I.T.A .NO.-3641/DEL/2014 PAGE 2 OF 2 THE DEPARTMENTAL APPEAL HAS BEEN FILED WHEREIN THE TAX EFFECT INVOLVED IS MUCH LESS THAN RS.10 LAKH. 3. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES ON THIS ISSUE AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE CBDT VIDE THE AFORESAID CIRCULAR DATED 10.12.2015 HAS REVISED THE MONETARY LIMIT TO RS.10 LAKH FOR FILING THE APPEAL BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL . VIDE PARA 10 OF THE AFORESAID CIRCULAR PARA 3 HAS BEEN MADE APPLICABLE RETROSPECTIVELY. CONSIDERING THE SETTLED LEGAL PRECEDENT THAT THE BOARDS INSTRU CTIONS OR DIRECTIONS ISSUED TO THE INCOME TAX AUTHORITIES U/S 268A OF THE INCOME TAX A CT, 1961 ARE BINDING ON THE AUTHORITIES, WE DISMISS THE DEPARTMENTAL APPEAL CON SIDERING THE MATERIAL AVAILABLE ON RECORD. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05 MA Y, 2016. SD/- SD/- (L.P.SAHU) (DIVA SING H) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05/05/2016 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSI STANT REGISTRAR ITAT NEW DELHI