ACIT, Noida V. M/s. Pluto Software Pvt. Ltd., Noida

ITA 3868/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96907 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 05-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 04-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ON FACTS
• Keywords: Bogus Share capital; Retrospective amendment; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - II , NEW DELHI BEFORE SHRI H.S.SIDHU, JUDICIAL MEMBER ITA NO. 3868 /DEL/2014 ASSESSMENT YEAR : 200 6 - 07 ORDER THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER DATED 30.04.2014 OF LD. CIT(A) - NOIDA FOR THE ASSESSMENT YEAR 2006 - 07 ON THE FOLLOWING GROUNDS: - 1. THAT THE LEARNED CIT ( APPEALS) HAS ERRED IN LAW AND ON FACTS BY DELETING THE ADDITION OF RS.11,00 ,000 / - MADE BY THE ASSESSING OFFICER BY HOLDING THE SHARE APPLICATION MONEY AS BOGUS AFTER MAKING DUE INQUIRIES AS DISCUSSED IN ASSESSMENT ORDER. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 11,00.0007 - ON ACCO UNT OF BOGUS SHARE APPLICATION MONEY BY MONEY RELYING UPON THE RATIO LAID DOWN IN THE CASE OF CIT VS. PONDEY METAL AND ROLLING MILLS PVT. LTD. & CIT VS. DWARIKADISH INVESTMENT PVT. LTD. (DELHI) BUT THE FACT OF THE CASE OF THE ASSESSEE ARE DIFFERENT FROM TH E CASES RELIED UPON. 3. THAT LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 11,00,000/ - WITHOUT CONSIDERING THE FACT THAT GENUI NE NESS OF TRANSACTION HAS NOT BEEN PROVED. 4. THAT THE APPELLANT CRAVES TO LEAVE, ADD, AFTER AND AMEND ANY OF THE GROUNDS OF APPEAL ON OR M BEFORE HEARING. 5. THAT THE ORDER OF C1T (APPEALS) BEING ERRONEOUS IN LAW AND OIL FACTS DESERVES TO BE SET ASIDE/CANCELED AND THE ORDER OF THE AO TO BE RESTORED. ACIT, CIRCLE - 2, NOIDA VS. PLUTO SOFTWARE PVT. LTD., B - 13, SECTOR - 4 NOIDA PAN:AADCP5717D (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIRANJAN SENAPATI, SR. DR RESPONDENT BY : SH. K.P. GARG, CA DATE OF HEARING : 05 .08.2015 DATE OF PRONOUNCEMENT : 05 .08.2015 PAGE 2 OF 4 2. AT THE TIME OF HEARING , LD. COUNSEL FOR THE ASSESSEE SHRI K.P. GARG, CA STATED THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS. 4,00,000/ - , AND THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. HE REQUESTED THAT THE APPEAL FILED BY TH E REVENUE MAY BE DISMISSED IN LI MINE. 3. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDER OF AO AND THE GROUNDS RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL. 4 . I HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD SPECIALLY THE ORDER OF THE REVENUE AUTHORITIES A LONG WITH THE CONTENTION RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL AND I AM OF THE CONSIDERED VIEW THAT THE TAX EFFECT IN THE PRESENT APPEAL IS LESS THAN RS.4,00,000/ - , AND THE PRESENT APPEAL IS NOT MAINTAINABLE. IT IS ALSO NOTICED THAT SECTION 268A H AS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01/04/1999. THE RELEVANT PROVISIONS CONTAINED IN SECTION 268A READ AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME - T AX AUTHORITIES, FIXING SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PURPOSE OF REGULATING FILING OF APPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME - TAX AUTHORITY UNDER THE PROVISIONS OF THIS CHAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1), AN INCOME - TAX AUTHORITY HAS NOT FILED ANY APPEAL OR APPLICATION FOR REFERENCE ON ANY ISSUE IN THE CASE OF AN ASSESSEE FOR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORITY FROM FILING AN APPE AL OR APPLICATION FOR REFERENCE ON THE SAME ISSUE IN THE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR; OR (B) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR; (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION FOR REFERENCE H AS BEEN FILED BY AN INCOME - TAX AUTHORITY PURSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1), IT SHALL NOT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME - TAX AUTHORITY HAS ACQUI ESCED IN THE DECISION ON THE DISPUTED ISSUE BY NOT FILING AN APPEAL OR APPLICATION FOR REFERENCE IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER S UB - SECTION (1) AND THE CIRCUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NOT FILED IN RESPECT OF ANY CASE. (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH HAS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR FILING AN APP EAL OR APPLICATION FOR REFERENCE SHALL BE PAGE 3 OF 4 DEEMED TO HAVE BEEN ISSUED UNDER SUB - SECTION (1) AND THE PROVISIONS OF SUB - SECTIONS (2), (3) AND (4) SHALL APPLY ACCORDINGLY. 5 . IT IS NOT IN DISPUTE THAT THE BOARDS INSTRUCTION OR DIRECTIONS ISSUED TO THE OTHER INCOME - TAX AUTHORITIES ARE BINDING ON THOSE AUTHORITIES, THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED THE APPEAL IN VIEW OF THE ABOVE MENTIONED SECTION 268A SINCE THE TAX EFFECT IN THE INSTANT CASE IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FILING TH E APPEAL. 6 . IT IS NOTICED THAT THE CBDT HAS ISSUED INSTRUCTION NO. 5/2014 DATED 10 TH JULY, 2014, BY WHICH THE CBDT HAS REVISED THE MONETARY LIMIT TO RS. 4,00,000/ - FOR FILING THE APPEAL BEFORE THE TRIBUNAL. 7 . KEEPING IN VIEW THE CBDT INSTRUCTION NO. 5 OF 2014 DATED 10 TH JULY, 2014 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, I AM OF THE VIEW THAT THE REVENUE SHOULD NOT HAVE FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL. WHILE TAKING SUCH A VIEW, I FORTIFIED BY THE FOLLOWING DECISIONS O F THE HONBLE PUNJAB & HARYANA HIGH COURT: 1. CIT VS. OSCAR LABORATORIES P. LTD. (2010) 324 ITR 115 (P&H); 2. CIT VS. ABINASH GUPTA (2010) 327 ITR 619 (P&H); 3. CIT VS. VARINDERA CONSTRUCTION CO. (2011) 331 ITR 449 (P&H) (FB). 8 . SIMILARLY, THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DELHI RACE CLUB LTD. IN ITA NO. 128/2008, ORDER DATED 03.03.2011 BY FOLLOWING THE EARLIER ORDER DATED 02.08.2010 IN ITA NO. 179/1991 IN THE CASE OF CIT DELHI - III VS. M/S P.S. JAIN & CO. HELD THAT SUCH CIRCULAR WOULD ALSO BE AP PLICABLE TO PENDING CASES. 9 . THUS, FROM THE RATIO LAID DOWN BY THE HONBL DELHI HIGH COURT, IT IS CLEAR THAT THE INSTRUCTIONS ISSUED IN THE CIRCULARS BY CBDT ARE APPLICABLE FOR PENDING CASES ALSO. THEREFORE, BY KEEPING IN VIEW THE RATIO LAID DOWN IN THE AFORESAID REFERRED TO CASE, I AM OF THE CONSIDERED VIEW THAT INSTRUCTION NO. 5 OF 2014 DATED 10 TH JULY, 2014 ISSUED BY THE CBDT ARE APPLICABLE FOR THE PENDING CASES ALSO AND IN THE SAID INSTRUCTIONS, MONETARY TAX LIMIT FOR NOT FILING THE APPEAL BEFORE THE ITAT IS RS. 4,00,000/ - . PAGE 4 OF 4 1 0 . IN VIEW OF THE ABOVE, WITHOUT GOING INTO MERIT OF THE CASE, I DISMISS THE APPEAL FILED BY THE REVENUE. 1 1 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH AUGUST , 2015 . - S D / - ( H.S.SIDHU ) ACCOUNTANT MEMBER DATED: 5 TH AUGUST, 2015 AKK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR