DCIT, Cir.1, Nashik, Nashik V. Shirin Anant Bagade, Nashik

ITA 405/PUN/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67087 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 01-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Question of law; Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.405/PN/2012 (ASSESSMENT YEAR : 2008-09) DY. COMMISSIONER OF INCOME TAX CIRCLE 1, NASHIK . APPELLANT VS. SHIRIN ANANT BAGADE C-3, SHEETAL PARADIES, GOVIND NAGAR, NASHIK PAN : ABAPB5700F . RESPONDENT APPELLANT BY : MS. ANN KAPTHUAMA RESPONDENT BY : MR. SUNIL PATHAK DATE OF HEARING : 21-06-2013 DATE OF PRONOUNCEMENT : 26-06-2013 ORDER PER SHAILENDRA KUMAR YADAV, JM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)I, NASHIK DATED 22.12.2011 WHICH, IN TURN , HAS ARISEN FROM AN ORDER OF THE ASSESSING OFFICER DATED 16.11.2010 PASSED UNDER SECTION 143(3) OF THE INCOM E-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE A SSESSMENT YEAR 2008-09. 2. THE GROUNDS OF APPEAL, AS RAISED BY THE REVENUE, READ AS UNDER :- ITA NO.405/PN/2012 SHIRIN ANANT BAGADE A.Y. 2008-09 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-1, NASHIK WAS JUSTIFIED IN ALLOWING IN THE ASSESSEES CLAIM OF EX PENDITURE WHICH WAS NOT SUPPORTED WITH SATISFACTORY DOCUMENTA RY EVIDENCE. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-1, NASHIK WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO D UE TO INVOKING OF THE PROVISIONS OF SECTION 145(3) OF THE INCOME TAX ACT. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I NASHIK WAS JUSTIFIED IN DELETING THE ADDITION MADE OF RS.3,65, 100/- ON ACCOUNT OF DISALLOWANCE MADE UNDER SECTION 40(A)(IA ) OF THE INCOME TAX ACT. 3. THE LEARNED COUNSEL FOR THE RESPONDENT-ASSESSEE AT THE OUTSET REFERRING TO THE GROUNDS FILED BY THE REVENU E SUBMITTED THAT THE REVENUE HAS BASICALLY CHALLENGED THE DELETION OF RS.3,65,100/-. THE TAX EFFECT ON THE GR OUNDS RAISED BY THE REVENUE IS LESS THAN RS. 3 LAKHS. TH EREFORE, IN VIEW OF THE LATEST CBDT INSTRUCTION NO.3 DATED 09-0 2-2011 AS WELL AS DECISIONS OF THE COORDINATE BENCHES OF T HE TRIBUNAL AND THE JURISDICTIONAL HIGH COURT THE APPE AL FILED BY THE REVENUE IS NOT MAINTAINABLE. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT TH E ABOVE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE. ITA NO.405/PN/2012 SHIRIN ANANT BAGADE A.Y. 2008-09 4. IN THE LIGHT OF THE RECENT GUIDELINES OF CBDT TH AT APPEAL IN THOSE CASES WHERE THE TAX EFFECT IS LESS THAN RS.10 LAKHS ARE NOT TO BE ENTERTAINED, THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DELHI RACE CLUB L TD. DISMISSED THE APPEAL PREFERRED BY THE REVENUE HAVIN G TAX EFFECT BELOW RS. 10 LAKHS. THE HONBLE DELHI HIGH COURT FOLLOWING ITS EARLIER DECISION IN THE CASE OF CIT V /S. M/S. P.S. JAIN & CO. (ITA NO. 179/1991 DECIDED ON 2 ND AUGUST 2010) HAS BEEN PLEASED TO HOLD THAT SUCH CIRCULAR WOULD A LSO APPLY TO PENDING CASES. HONBLE DELHI HIGH COURT I N THE CASE OF CIT V/S. M/S. P.S. JAIN & CO. (SUPRA) HAS B EEN PLEASED TO DISMISS THE REFERENCE APPLICATION HAVING TAX EFFECT OF RS.1,80,000/- FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S. PITHWA ENGINEERING WORKS (2005), 276 ITR 519 (BOM) AND HON BLE M.P. HIGH COURT IN THE CASE OF CIT V/S. ASHOKKUMAR MANIBHAI PATEL & CO., 317 ITR 386 (M.P.). 5. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CAS E OF CIT V/S. PITHWA ENGINEERING WORKS (SUPRA) IN PARA N O.6, HAS EXPRESSED FOLLOWING VIEW AT PAGE NO. 520 : THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF T HE FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, THE AS SESSES ON THE FILE OF THE DEPARTMENTS HAVE BEEN INCREASED CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT HAS ALS O INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE ITA NO.405/PN/2012 SHIRIN ANANT BAGADE A.Y. 2008-09 SUPERIOR COURTS ARE CHOCKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTE, THE BOARD HAS RIG HTLY TAKEN A DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT LESS THAN RS.2 LAKHS. THE SAME POLICY FOR OLD MATTE RS NEED TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOARDS CIRCULAR DATED MARCH 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STI LL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCE EDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX EFFECT . IN VIEW OF THESE DECISIONS, INCLUDING DECISION OF H ONBLE JURISDICTIONAL HIGH COURT, WE COME TO THE CONCLUSIO N THAT CBDT GUIDELINES FOR THE REVENUE NOT TO PREFER APPEA L AGAINST FIRST APPELLATE ORDER BEFORE THE TRIBUNAL H AVING TAX EFFECT UPTO RS. 3 LAKHS IS VERY MUCH APPLICABLE EVE N IN PENDING APPEALS. IN THE CASE OF CIT V/S. MADHUKAR K. INAMDAR (HUF) (SUPRA), THE HONBLE JURISDICTIONAL H IGH COURT HAS BEEN PLEASED TO HOLD AGAIN THAT CBDT CIRC ULAR DT.15 TH MAY 2008 WOULD BE VERY MUCH APPLICABLE TO THE PENDING CASES REQUIRING DEPARTMENT TO WITHDRAW THE CASES WHEREIN TAX EFFECT IS LESS THAN THE PRESCRIBED MONE TARY LIMITS. THE HONBLE HIGH COURT HAS BEEN FURTHER PL EASED TO HOLD THAT EVEN IF THE QUESTION OF LAW IS OF RECURRI NG NATURE, EVEN THEN THE REVENUE IS NOT EXPECTED TO FILE APPEA LS IN SUCH CASES, IF THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT FIXED BY THE CBDT. ITA NO.405/PN/2012 SHIRIN ANANT BAGADE A.Y. 2008-09 6. RESPECTFULLY FOLLOWING THESE DECISIONS INCLUDING DECISIONS OF HONBLE BOMBAY HIGH COURT CITED (SUPRA ) HAVING BINDING EFFECT ON THE TRIBUNAL, WE HOLD THAT THIS APPEAL HAVING MONETARY IMPACT BELOW RS.3 LAKHS I S NOT MAINTAINABLE AS THE APPEAL PREFERRED BY THE REVENUE IS IN VIOLATION OF THE ABOVE STATED GUIDELINES OF THE CBD T. ACCORDINGLY, WE DISMISS THE APPEAL FILED BY THE REV ENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JUNE, 2013. SD/- SD/- (R. K. PANDA) (SHAILENDRA KUMA R YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 26 TH JUNE, 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO: - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR, A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE