Assistant Commissioner of Income Tax Circle-7(1)(2), Bangalore V. M/s Zenith G Corp Reality Pvt Ltd , Bangalore

ITA 367/BANG/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0010 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 17-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI JT BENGALURU
• Assessee Lawyers: CYRUS JAL BHARUCHA
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO. 367/BANG/2017 ASSESSMENT YEAR : 2012 - 13 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 7(1)(2), BANGALORE. VS. M/S. ZENITH G CORP REALITY PVT. LTD., 21/19, CRAIG PARK LAYOUT, OFF. M G ROAD, BANGALORE 560 001. PAN: AAACZ 2516M APP ELL ANT RESPONDENT A PP EL LANT BY : SMT. PADMAMEENAKSHI , JT.CIT(DR)(ITAT), BENGALURU. RE SPONDENT BY : SHRI CYRUS JAL BHARUCHA, CA DATE OF HEARING : 16.07 .201 8 DATE OF PRONOUNCEMENT : 14 . 0 9 .201 8 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORD ER DATED 24.11.2016 OF THE CIT(APPEALS)-7, BENGALURU RELATIN G TO ASSESSMENT YEAR 2012-13. 2. THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN T HE BUSINESS OF REAL ESTATE DEVELOPMENT, REAL ESTATE PROJECT MANAGEMENT, ETC. FOR THE AY 2012-13, THE ASSESSEE FILED A RETURN OF INCOME DECL ARING THE TOTAL INCOME AT A LOSS OF RS.31,16,888. THE ASSESSEE HAD INCOME UN DER THE HEAD INCOME FROM OTHER SOURCES OF RS.54,04,771. THE ASSESSEE CLAIMED LOSS UNDER THE ITA NO. 367/BANG/2017 PAGE 2 OF 3 HEAD INCOME FROM BUSINESS OF RS.85,21,658, AFTER SETTING OFF THE BUSINESS LOSS AGAINST INCOME FROM OTHER SOURCES, THE ASSESSE E DECLARED LOSS OF RS.31,16,888 IN THE RETURN OF INCOME AND SOUGHT CAR RY FORWARD OF UNABSORBED BUSINESS LOSS FOR SETTING OFF AGAINST IN COME IN SUBSEQUENT YEARS IN ACCORDANCE WITH THE LAW. 3. THE AO HELD THAT THE BUSINESS OF THE ASSESSEE HA D NOT BEEN SET UP AND HE THEREFORE IGNORED THE LOSS DECLARED UNDER TH E HEAD INCOME FROM BUSINESS LOSS AND RAISED A DEMAND FOR TAX ON THE I NCOME DECLARED UNDER THE HEAD INCOME FROM OTHER SOURCES. THE DEMAND F OR TAX WAS A SUM OF RS.16,25,330. 4. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) HELD THAT THE BUSINESS OF ASSESSEE HAD BEEN SET UP AND THEREFORE LOSS CLAI MED BY IT HAD TO BE ALLOWED. AGGRIEVED BY THE ORDER OF CIT(APPEALS), TH E REVENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. AS WE HAVE ALREADY SEEN, THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS.20 LAKHS, IN VIEW OF THE CBDT CIRCULAR NO.3/2018 DATED 11.07.2018, THE REVENUE CANNOT FILE APPEALS BEFORE THE TRIBUNAL WHE RE THE TAX EFFECT IS LESS THAN RS.20 LAKHS. SINCE THE TAX EFFECT IN THE PRES ENT APPEAL FOR THE PRESENT ASSESSMENT YEAR IS LESS THAN RS.20 LAKHS, THIS APPE AL OF THE REVENUE IS LIABLE TO BE DISMISSED AS NOT MAINTAINABLE. FOR TH E PURPOSE OF CLARITY, WE MAY REFER TO PARA 4 OF THE CIRCULAR NO.3/2018 DATED 11.07.2018 WHICH IS AS UNDER:- FOR THIS PURPOSE, 'TAX EFFECT' MEANS THE DIFFEREN CE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT W OULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY TH E AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEA L IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS 'DISPUTED I SSUES). ITA NO. 367/BANG/2017 PAGE 3 OF 3 6. THE TAX CHARGEABLE FOR THE PRESENT ASSESSMENT Y EAR, AS WE HAVE ALREADY SEEN IS LESS THAN RS.20 LAKHS AND THEREFORE THIS APPEAL BY THE REVENUE IS DISMISSED AS NOT MAINTAINABLE. 7. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF SEPTEMBER, 2018. SD/- SD/- ( INTURI RAMA RAO ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 14 TH SEPTEMBER, 2018. / D ESAI S MURTHY / COPY TO: 1. APP ELL ANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.