ACIT, New Delhi V. Smt. Pavan Kapoor, New Delhi

ITA 3679/DEL/2010

• Counselvise Citation: 367920114 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 06-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 02-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK SENIOR
• Assessee Lawyers: RAJIV AGARWAL
• Keywords: Question of law; Tax effect
• Section: 37(1)

Judgement Text

BEFORE THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH F, NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3679/DEL.2010 (ASSESSMENT YEAR : 2006-07) ACIT, CIRCLE 32 (1), VS. SMT. PAVAN KAPOOR, NEW DELHI. 1/23 B, ASAF ALI ROAD, NEW DELHI. (PAN NO.AAIPK1012A) (APELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJIV AGARWAL, CA DEPARTMENT BY : SMT. PRATIMA KAUSHIK, SENIOR DR O R D E R PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE ARISES OUT OF THE ORDER OF THE CIT (APPEALS)-XXVI, NEW DELHI DATED 19.05.2010 FOR THE ASSESSMENT YEAR 2006-07. THE GROUNDS OF APPEAL TAKEN BY THE REVENU E ARE AS UNDER :- THE LD. CIT (A) HAS ERRED IN DELETING THE DISALLOWANCE OF TRAVELING EXPENSES PAID TO THE HUSB AND OF THE ASSESSEE WHO WAS IN RECEIPT OF COMMISSION ON SA LES ALSO, AS IT WAS A CONTRIVE ARRANGEMENT TO REDUCE TH E BUSINESS PROFIT OF THE ASSESSEE AND NOT ALLOWABLE U /S 37(1) OF THE I.T. ACT, 1961. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TAX EFFECT IN THIS CASE IS LESS THAN RS.3.00 LAKHS. THIS POSITION IS ADMITTED BY THE LD. D.R. THEREFORE, AS PER THE INSTRUCTION NO. 3/2011 DATED ITA NO.3679/DEL/2010 2 09.02.2011 THE REVENUE IS NOT PERMITTED TO FILE A PPEAL BEFORE THE TRIBUNAL IF THE TAX EFFECT IS LESS THAN RS. 3.00 L AKH. HE PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT DATED 25.03.2011 IN ITA NOS. 3 TO 5/2010. ON THE OTHER HAND, LD. DR FOR THE REVENUE SUBMITTED THAT INSTRUCTION NO. 3/2011 IS NOT APPL ICABLE FOR THE APPEALS FILED PRIOR TO ISSUE OF THE SAID INSTRUCTIONS. IT IS ALSO SUBMITTED THAT THE DECISION OF FULL BENCH OF PUNJAB & HARYANA HIGH CO URT IN THE CASE OF CIT VS. VIRENDRA CONSTRUCTION CO., 239 CTR 1, T HAT REVISED MONETARY LIMITS ARE NOT APPLICABLE TO THE PENDING APPEALS, IS IN FAVOUR OF THE REVENUE. 3. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE MATERIAL AVAILABLE ON RECORD. INSTRUCTION NO. 3/2011 DATED 09.02.2011 HAS REVISED THE MONETARY LIMIT FOR FILING THE APPEAL BY THE DEPARTMENT BEFORE INCOME-TAX APPELLATE TRIBUNAL, HONBLE HI GH COURTS AND HONBLE SUPREME COURT. MONETARY LIMIT FOR FILI NG THE APPEAL BEFORE THE TRIBUNAL IS RS. 3.00 LAKH; BEFORE HONBLE HIGH COURT RS. 10.00 LAKH AND BEFORE HONBLE SUPREME COURT RS. 25.00 LAKH. HONBLE HIGH COURT IN THEIR ORDER DATED 25.03.2011 REFERRED TO ABOVE HAS HELD AS UNDER:- IT IS STATED THAT THE TAX IMPACT IN THE PRESENT CASES IS LESS THAN RS. 10.00 LAKHS. THE DEPARTMENT HAS RECENT LY ISSUED AN INSTRUCTION BEARING NO. 3/2011 DATED 09.02.20 11, WHICH IS IDENTICAL TO ITS EARLIER INSTRUCTION BEARIN G NO. 5/2008 DATED 15.05.2008 EXCEPT THAT IN SO FAR AS THE HIGH COURT ITA NO.3679/DEL/2010 3 IS CONCERNED, THE MONETARY LIMIT IN RESPECT OF AP PEALS WHERE THE QUESTIONS OF LAW RAISED NEED NOT TO B E ANSWERED, HAS BEEN RAISED FROM RS. 4.00 LAKHS TO RS. 10.00 LAKHS. THE DIVISION BENCH OF THIS COURT IN ITA NO . 89/1999 DECIDED ON 28.01.2011 HAS ALREADY HELD THAT THE INSTRUCTION BEARING NO. 5/2008 DATED 15.05.2008 WOULD APPLY EVEN TO THE OLD PENDING REFERENCES AND AP PEALS. THIS PRINCIPLE WOULD THUS NATURALLY EQUALLY APPLY TO T HE INSTANT INSTRUCTION BEARING NO.3/2011 DATED 09.02.2011, A S WELL. THE TAX EFFECT BEING LESS THAN RS. 10.00 LAKHS, THE QUESTION OF LAW DOES NOT REQUIRE TO BE ANSWERED. THE APP EALS ARE DISPOSED OF ACCORDINGLY. 3.1 LD. AR FOR THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DELHI RACE CLUB LTD. IN ITA NO. 128/2008 DATED 03.03.2011 WHEREIN IT H AS BEEN HELD AS UNDER:- THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS RS. 4,65,860/-. AS PER THE RECENT GUIDELINES OF THE CBDT, APPEAL IN THOSE CASES WHERE THE TAX EFFECT IS LE SS THAN RS. 10.00 LAKHS, ARE NOT TO BE ENTERTAINED. THIS COURT IN THE CASE OF CIT, DELHI-III VS. M/S P .S. JAIN & CO., BEING ITA NO. 179/1991 DECIDED ON 2 ND AUGUST, 2010 HAS TAKEN A VIEW THAT SUCH CIRCULAR WOULD ALSO APPLY TO PENDING CASES. 3.2 IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT, WHICH IS THE JURISDICTIONAL HIGH COURT IN THIS CASE, IT IS HEL D THAT INSTRUCTION NO. 3/2011 DATED 09.02.2011 WILL APPLY TO ALL PENDI NG APPEALS. RESPECTFULLY FOLLOWING THE PRECEDENT, IT IS HELD THAT THE APPEAL IS NOT MAINTAINABLE IN THE INSTANT CASE AS THE TAX EFFE CT IS LESS THAN RS. 3.00 ITA NO.3679/DEL/2010 4 LAKHS. ACCORDINGLY, IT IS HELD THAT APPEAL FILED B Y THE REVENUE IS NOT MAINTAINABLE. 4. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT IS DISMISSED IN LIMINE WITHOUT GOING INTO THE MERITS. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF SEPTEMBER, 2011. SD/- SD/- (C.L. SETHI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : THE 6 TH DAY OF SEPTEMBER, 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT