Deputy Commissioner of Income tax, V. Rasiklal Manikchand Dhariwal (HUF), Pune

ITA 37/PUN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6322 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 05-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Assessee Lawyers: CH NARESH ADJOURNMENT REFUSED
• Keywords: Tax effect; Rule 8D
• Section: 143(3); 2

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.37/PUN/2017 / ASSESSMENT YEAR : 2012-13 THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(1), PUNE. . / APPELLANT V/S RASIKLAL MANIKCHAND DHARIWAL (HUF), MANIKCHAND HOUSE, PLOT NO.100/101, D. KENNEDY ROAD, BEHIND HOTEL LE MERADIEN, PUNE 411 001. PAN : AABHD5583L. . / RESPONDENT ASSESSEE BY : SHRI CH. NARESH. (ADJOURNMENT REFUSED). REVENUE BY : SHRI PANKAJ GARG. PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) PUNE, 11 DATED 27.10. 2016 FOR A.YS. 2004-05 AND 2006-07 TO 2013-14. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN HUF. IT FILED ITS RETURN OF INCOME FOR A.Y. 2011- 12 ON 24.09.2012 DECLARING TOTAL INCOME OF RS. 41,68,09,580/- . THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMEN T WAS FRAMED / DATE OF HEARING : 02.05.2019 / DATE OF PRONOUNCEMENT: 03.05.2019 2 U/S 143(3) OF THE ACT VIDE ORDER DATED 30.11.2015 AND TH E TOTAL INCOME WAS DETERMINED AT RS.42,33,80,508/- AND AGRICULTURA L INCOME AT RS.73,441/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE C ARRIED THE MATTER BEFORE LD.CIT(A) WHO VIDE ORDER DT.27.10.2016 (IN APP EAL NO.PN/CIT(A)-11/DCIT, CEN. CIR.1(1), PUNE/147/2014-15) GRA NTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS R AISED THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LEARNED CIT(A) WAS JUSTIFIED IN RESTRICTING THE DIS ALLOWANCE UNDER RULE 8D(2)(III) TO RS.2 LAKHS IN EACH YEAR ADHOC BASIS WITHOUT APPRECIATING THAT SECTION 14A(2) MANDATES THAT THE AMOUNT OF EXP ENDITURE TO BE DISALLOWED IS TO BE DETERMINED AS PER THE METHOD PR ESCRIBED IN RULE 8D OF THE I.T. RULES, 1962 AND WHEN RULE 8D(2) USES TH E WORD SHALL AND THEREFORE COMPUTATION OF DISALLOWANCE IS ALSO MANDA TORY ? 2. THE ORDER OF CIT(A) MAY BE VACATED AND THAT OF T HE ASSESSING OFFICER BE RESTORED. 3. ON THE DATE OF HEARING, ADJOURNMENT APPLICATION WAS FILED BY THE LD.A.R. SEEKING ADJOURNMENT IN THE CASE. LD.D.R. BEFORE US FAIRLY ADMITTED THAT THE TAX EFFECT INVOLVED IN THE PRESENT APPE AL OF REVENUE IS WITHIN THE MONETARY LIMIT PRESCRIBED BY CBDT CIRCULAR DAT ED 11.07.2018. IN VIEW OF THE AFORESAID SUBMISSION OF LD.D.R. THE ADJOURNMENT WAS REFUSED AND WE THEREFORE PROCEED TO D ECIDE THE APPEAL EX-PARTE QUA THE ASSESSEE. 4. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL AV AILABLE ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENUE, WE FIND THAT REVENUE IS AGGRIEVED BY THE ORDER OF LD. CIT(A ) IN RESPECT OF THE RELIEF GIVEN BY HIM. AS PER THE RECENT ANNOUNCEME NT OF CENTRAL BOARD OF DIRECT TAXES (CBDT) DATED 11.07.2018 (CIRCULAR NO . 3 OF 3 2018), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF G IVEN BY LD. CIT(A) BEFORE THE INCOME TAX APPELLATE TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST, EXCEEDS RS.20 LAKHS AND IT FURTHER STA TES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDING APP EALS ALSO. IN THE PRESENT CASE, SINCE IT IS AN UNDISPUTED FACT THAT ON THE ADDITION WHICH IS IN DISPUTE, THE TAX EFFECT IS LESS THAN RS.20 LAKHS AND IN THE ABSENCE OF ANY MATERIAL PLACED ON RECORD BY THE REVENUE TO DEMONSTRATE THAT THE ISSUE IN THE PRESENT APPEAL IS COV ERED BY EXCEPTIONS PROVIDED IN PARA 10 OF THE AFORESAID CBDT CIRCU LAR, WE ARE OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY THE INST RUCTIONS OF THE AFORESAID CBDT CIRCULAR WOULD BE APPLICABLE TO THE PRES ENT APPEAL OF THE DEPARTMENT. WE THEREFORE HOLD THE PRESENT APPEA L OF REVENUE TO BE NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT AND AC CORDINGLY DISMISS THE APPEAL OF REVENUE WITHOUT EXPRESSING ANY OPIN ION ON MERITS OF THE CASE. HOWEVER, IN CASE THERE IS ANY ERROR IN THE COMPUTATION OF THE TAX EFFECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT CIRCULAR IS NOT APPLICABLE, IT WOULD BE OPEN T O THE REVENUE TO SEEK REVIVAL OF THE APPEAL. THUS, THE GROUNDS OF THE REVENUE ARE DISMISSED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON 3 RD DAY OF MAY, 2019. SD/- SD/- ( PARTHA SARATHI CHAUDHURY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER PUNE; DATED : 3 RD MAY, 2019. YAMINI 4 '#$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4 5. 6. THE CIT(A)-11, PUNE. THE PR. CIT(CENTRAL), PUNE. !,# ! , / DR, ITAT, B PUNE; %&'/ GUARD FILE. / BY ORDER // TRUE COPY // ( )*+ , / SR. PRIVATE SECRETARY # ! , / ITAT, PUNE.