ACIT 25(3), MUMBAI V. PURVI PANKAJ PATEL, MUMBAI

ITA 4092/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1692 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 15-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP LD
• Assessee Lawyers: DEVDATTA MAINKAR
• Keywords: Business income; Earning of tax free income; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.4097/MUM/2016 ( / ASSESSMENT YEAR:2010-11) ASSISTANT COMMISSIONER OF INCOME TAX-25(2) ROOM NO.508, C-10, 5 TH FLOOR PRATAYKSHKAR BHAWAN BANDRA KURLA COMPLEX BANDRA (E), MUMBAI-400 051 / VS. DAMYANTI ASHWIN PATEL 5, DIVYA DARSHAN N.S.ROAD NO.5 JVPD SCHEME VILE PAREL (W) MUMBAI-400 056 ! ./ ./PAN/GIR NO. AABPP-2154-K ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) & ./I.T.A. NO.4092 /MUM/2016 ( / ASSESSMENT YEAR:2010-11) ASSISTANT COMMISS IONER OF INCOME TAX-25(3) C-10, 6 TH FLOOR PRATAYKSHKAR BHAWAN BANDRA KURLA COMPLEX BANDRA (E), MUMBAI-400 051 / VS. PURVI PANKAJ PATEL 5, DIVYA DARSHAN N.S.ROAD NO.5 JVPD SCHEME VILE PAREL (W) MUMBAI-400 056 ! ./ ./PAN/GIR NO. AABPP-7140-F ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : DEVDATTA MAINKAR REVENUE BY : POOJA SWAROOP, LD. SR. DR / DATE OF HEARING : 10/08/2018 / DATE OF PRONOUNCEMENT : 05/09/2018 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEALS BY REVENUE FOR ASSESSMENT YEAR [AY] 2010-11 CONTESTS SEPARATE ORDERS OF LD. FIRST APPELLATE AUT HORITY QUA CERTAIN RELIEF PROVIDED TO THE TWO DIFFERENT ASSESSEES. WE DISPOSE -OFF THE SAME BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENC E & BREVITY SINCE BOTH ARE COVERED BY LOW TAX EFFECT CIRCULAR RECENTLY ISSUED BY CBDT. ITA NO. 4097/MUM/2016, DAMYANTI ASHWIN PATEL 2. AT THE OUTSET, LD. SR. DR, MS. POOJA SWAROOP, PLACED ON RECORD LETTER DATED 30/07/2018 ISSUED BY ASSISTANT COMMISSIONER OF INCOME TAX-25(2), CERTIFYING THAT THE TAX EFFECT OF THE QUANTUM ADDIT ION AS CONTESTED BY THE REVENUE IS LESS THAN THRESHOLD LIM IT OF RS.20 LACS AND THE SAME IS COVERED BY RECENTLY ISSUED LOW TAX EFFECT CIRCULAR NO.03/2018 DATED 11/07/2018 ISSUED BY CENTRAL BOARD OF DIRECT TAXES [CBDT]. 3. WE HAVE GONE THROUGH THE CIRCULAR AND FIND THAT THE TAX EFFECT OF QUANTUM IN DISPUTE IS BELOW PRESCRIBED LIMIT OF RS. 20 LACS AND THE ASSESSEE STOOD BENEFITTED BY THE ABOVE CIRCULAR ISS UED BY CBDT WHEREIN THE MINIMUM MONETARY LIMIT FOR FILING THE A PPEALS BEFORE VARIOUS APPELLATE AUTHORITIES HAVE BEEN FIXED AS UNDER:- S. NO. APPEALS/ SLPS IN INCOME - TAX MATTERS MONETARY LIMIT (RS.) 1 BEFORE APPELLATE TRIBUNAL 20.00,000 2 BEFORE HIGH COURT 50.00,000 3 BEFORE SUPREME COURT 1,00.00,000 3 THE AFORESAID LIMITS, AS PER PARA 13 OF THE CIRCULAR APPLIES TO PENDING APPEALS ALSO. IN VIEW OF THE ADMITTED POSITION, WE DISMISS THE REVENUES APPEAL. ITA NO. 4092/MUM/2016, DAMYANTI ASHWIN PATEL 4. THE CAPTIONED ASSESSEE HAS BEEN ASSESSED U/S 143 (3) ON 28/03/2013 WHEREIN THE INCOME FROM SHARES AS OFFERED BY THE ASSESSEE UNDER THE HEAD CAPITAL GAINS HAS BEEN ASSESSED AS BUSINESS INCOME. THE LD.CIT(A), REVERSING THE STAND OF LD. AO, HAS A LLOWED THE CLAIM OF THE ASSESSEE, AGAINST WHICH THE REVENUE IS IN FURTH ER APPEAL BEFORE US. AT THE SAME TIME, LD. CIT(A) NOTED THAT THE CORRECT FIGURES OF LONG TERM CAPITAL GAINS WAS RS.35.94 LACS INSTEAD OF RS.49.91 LACS AS WRONG LY PICKED BY LD. AO. THE DIFFERENCE OF THE TWO REPRESE NTED EXEMPT DIVIDEND INCOME & INTEREST ON PPF AGGREGATING TO RS.13.96 LACS AND THE LD. AO WAS DIRECTED TO EXCLUDE THE EXEMPT AMOUNTS A FTER DUE VERIFICATION WHILE DETERMINING THE CORRECT INCOME O F THE ASSESSEE. THE REVENUE, IN GROUNDS OF APPEAL, HAS CONTESTED THE ST AND OF LD. CIT(A) IN DIRECTING THE AO TO ASSESS INCOME FROM SHARES UNDER THE HEAD CAPITAL GAINS AS AGAINST ASSESSED BY LD. AO AS BUSINESS INCOME. 5. THE LD. AUHTORIZED REPRESENTATIVE FOR ASSESSEE [ AR], SHRI DEVDATTA MAINKAR, BY WAY OF WORKINGS, SUBMITTED THAT THE TAX EFFECT O F THE QUANTUM ADDITION UNDER DISPUTE WAS LESS THAN TH RESHOLD LIMIT OF RS.20 LACS AND THEREFORE, THE APPEAL WAS NOT MAINTA INABLE. THE SAME HAS BEEN CONTROVERTED BY LD. SR. DR, MS. POOJA SWAROOP, WHO SUBMITTED THAT THE TAX EFFECT AS PER SYSTEM COMPUTA TION WAS MORE THAN RS.20 LACS. 4 6. WE HAVE CAREFULLY HEARD THE SUBMISSIONS AND PERU SED RELEVANT MATERIAL ON RECORD. WE FIND THAT ROOT OF DIFFERENCE LIES IN THE FACT THAT LD. AO PICKED UP WRONG FIGURES OF LONG TERM CAPITAL GAINS [LTCG] AS RS.49.91 LACS AS AGAINST CORRECT FIGURES OF RS.35.9 4 LACS AND THE DIFFERENTIAL AMOUNT I.E. RS.13.96 LACS AROSE TO THE ASSESSEE FROM DIVIDEND INCOME AND INTEREST ON PPF WHICH WAS EXEMPT AS PER THE STATUTORY PROVISIONS. THE LD. CIT(A) PROVIDE TWO RE LIEF TO THE ASSESSEE I.E. THE INCOME FROM SHARES WAS TO BE ASSESSED AS CAPITAL GAINS AND SECONDLY, THE LD. AO WAS DIRECTED TO PICK UP CORREC T FIGURES OF LTCG AFTER EXCLUDING THE STATED EXEMPT INCOME OF RS.13.9 6 LACS THERE-FROM AFTER DUE VERIFICATION . THE REVENUE, IN GROUNDS OF APPEAL, HAS AGITATED THE FIRST RELIEF PROVIDED TO THE ASSESSEE. THIS BEI NG THE CASE, THE TAX EFFECT OF THE QUANTUM ADDITIONS AS AGITATED BY THE REVENUE FALLS BELOW THRESHOLD LIMIT OF RS.20 LACS AND THE SAME IS SQUAR ELY COVERED BY THE RECENTLY ISSUED LOW TAX EFFECT CIRCULAR NO.03/2018 DATED 11/07/2018 ISSUED BY CENTRAL BOARD OF DIRECT TAXES [CBDT]. IN SUCH A SITUATION, THE APPEAL OF THE REVENUE, IN OUR OPINION, IS NOT MAINT AINABLE IN TERMS OF THE AFORESAID CIRCULAR. THEREFORE, THE SAME STAND DISMI SSED. CONCLUSION 7. BOTH THE APPEALS STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH SEPTEMBER, 2018. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 05.09.2018 SR.PS:-THIRUMALESH 5 ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. + ,$ - , - , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI