The ACIT, Navsari Circle, Navsari V. Shri Hiteshkumar Mohanlal Desai, Navsari

ITA 3797/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8775 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-03-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 04-10-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P ORAMDR
• Keywords: Audit objection; Question of law; Tax effect
• Section: 268A

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL AHEMADABAD B BENCH BEFORE S/SHRI D.T.GARASIA, JUDICIAL MEMBER & A.N.PAHUJA, ACCOUNTANT MEMBER ITA NOS.3797/AHD/2007 ASSESSMENT YEAR: 2004-05 ASSISTANT COMMISSIONER OF INCOME-TAX ,NAVSARI CIRCLE,NAVSARI (APPELLANT) V. SHRI HITESHKUMAR MOHANLAL DESAI, 6,LIC BRANCH-2,ADITYA COMPLEX,NEAR OLD TELEPHONE EXCHANGE,FUVARA, NAVSARI. [PAN :ACCPD5938Q] (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI P ORAM,DR ORDER A.N.PAHUJA :THIS APPEAL OF THE REVENUE ARISING OUT OF AN ORDER DATED 13.7.2007 OF LD. CIT(A)-VALSAD, RAISES GROUN DS RELATING TO CLAIM OF THE ASSESSEE FOR DEDUCTION OF 30% INCENTIVE BONUS COMMI SSION AMOUNTING TO RS.1,93,895/- 2. AT THE OUTSET, WE FIND THAT THE TAX EFFECT I N THIS APPEAL FILED BY THE REVENUE IS BELOW THE LIMIT OF RS.2 LAKHS S TIPULATED BY THE CBDT IN THEIR INSTRUCTION FOR FILING APPEALS. THE LD. DR APPEARING BEFORE US COULD NOT POINT OUT THAT THE CA SE FALLS WITHIN ANY OF THE FOLLOWING EXCEPTIONS IN CBDT INSTRUCTION NO.279/MISC.- 64/05-ITJ DATED 24.10.2005 OR EARLIER INSTRUCTION N O. 1979 DATED 27.3.2000 AS CLARIFIED VIDE SUBSEQUENT INSTRUCTION NO. 1985 DATED 29.6.2000 OR EVEN IN LATEST INSTRUCTION NO. 5 OF 20 08 DATED 15.5.2008: ITA NOS.3797/AHD/2007 2 (A) WHERE THE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, (B) WHERE THE BOARD'S ORDER, NOTIFICATION, INSTRUCT ION OR CIRCULAR IS THE SUBJECT-MATTER OF AN ADVERSE ORDER, (C) WHERE PROSECUTION PROCEEDINGS ARE CONTEMPLATED AGAINST THE ASSESSEE, AND (D) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF THE ACT IS UNDER CHALLENGE. 2.1 RECENTLY, HONBLE BOMBAY HIGH COURT IN THEIR DECISION IN THE CASE OF CIT VS. MADHUKAR K INAMDAR(HUF),229 CTR(BOM.)77 WHI LE REFERRING TO THE CIRCULAR DATED 5.6.2007 ISSUED BY THE CBDT, THE RE LEVANT PROVISIONS OF SEC. 268A OF THE ACT AND THEIR OWN DECISION IN THE CASE OF CIT VS. POLYCOTT CORPORATION,20 DTR(BOM.)16 HELD THAT INSTRUCTION NO . 5 OF 2008 DATED 15.5.2008 IS APPLICABLE EVEN TO MATTERS FILED B EFORE THAT DATE I.E. PENDING BEFORE THE COURT. THE INSTRUCTION NO. 5 OF 2008 D ATED 15.5.2008 SEEMS TO LIMIT THE ISSUES IN SO FAR AS THE SAME QUESTION OF LAW OR RECURRING ISSUE EXCEPT TO THE EXTENT PROVIDED IN PARA.5. ON A PROPER READI NG OF PARA.5 OF THE INSTRUCTIONS IT WOULD BE CLEAR THAT A DUTY IS CAST ON THE ASSESSING OFFICER THAT EVEN IF THE DISPUTED QUESTIONS ARISE FOR MORE THAN ONE ASSESSMENT YEAR THEN AN APPEAL SHOULD BE FILED ONLY IN RESPECT OF THOSE YEARS WHERE THE MONETARY LIMIT EXCEEDS THE LIMITS AS SPECIFIED IN PARA.3 OF THE INSTRUCTIONS. 3. EVEN OTHERWISE THE LD. CIT(A) ALLOWED THE CLA IM FOR DEDUCTION OF 30% OF THE INCENTIVE BONUS IN THE LIGHT OF DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN CIT VS. KIRAN H SHELAT,235 ITR 635(GUJ.) 4. IN VIEW OF THE FOREGOING AND IN THE LIGHT OF AFORES AID INSTRUCTION DATED 24.10.2005 OF THE CBDT AND DECISION DATED 5.8.2008 OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. CO NCORD PHAMACEUTICALS IN TAX ITA NOS.3797/AHD/2007 3 APPEAL NOS. 1402 TO 1405 OF 2007 AS ALSO CONSISTE NT VIEW TAKEN BY VARIOUS HIGH COURTS IN THE CASE OF CIT VS. MADHUKA R K INAMDAR(HUF),229 CTR(BOM.)77, CIT VS. POLYCOTT CORP ORATION,20 DTR(BOM.)16,CIT VS. CHHAJER PACKAGING AND PLASTICS P.LTD., 300 ITR 180(BOM.),CIT VS. CAMCO COLOUR CO,254 ITR 565(B OM.), CIT VS. ZOEB Y TOPIWALA,284 ITR 379(BOM),& CIT VS. S.ANNAMALAI,258 ITR 675(MADRAS) AND HONBLE DELHI H IGH COURT IN THEIR ORDER DATED 1.8.2007 IN ITA NO. 683/2007 I N THE CASE OF CIT VS. MANISH BHAMBRI, THIS APPEAL CAN NOT BE ENT ERTAINED. 5. RESPECTFULLY FOLLOWING THE AFORESA ID DECISIONS OF THE HON'BLE JURISDICTIONAL HIGH COURT AND OTHER HIGH COURTS, T HIS APPEAL IS DISMISSED, IN LIMINE. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 25TH MARCH, 2010 SD/- SD/- (D.T.GARASIA) (A.N.PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 25TH MARCH, 2010 AHMEDABAD COPY OF THE ORDER FORWARDED TO:- THE ASSESSEE/ ACIT,NAVSARI CIRCLE,NAVSARI / CIT CONCERNED/ CIT(A)-VALSAD /THE DR/GUARD FILE DY REGISTRAR