The ITO-5(1), Indore V. M/s. Sanghvi Metal Processing and Manufacturing Pvt. Ltd., Indore

ITA 416/IND/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6401 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 02-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B J BORICHA
• Keywords: Tax effect
• Section: 144

Judgement Text

SANGHVI METAL PROCESSING AND MANUFACTURING PVT.LTD ITA 416/IND/2017 1 IN THE INCOME TAX APPELLATE TRIBUNA L INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, HONBLE JUDICIAL MEM BER AND SHRI MANISH BORAD, HONBLE ACCOUNTANT ME MBER ITA NO. 416/IND/2017 A.Y. 2008-09 INCOME TAX OFFICER 5(1) INDORE ::: APPELLANT VS SANGHVI METAL PROCESSING AND MANUFACTURING PVT.LTD, INDORE ::: RESPONDENT APPELLANT BY SHRI B.J. BORICHA, SR.DR RESPONDENT BY SMT.SHREYA JAIN, CA DATE OF HEARING 24 .7.20 18 DATE OF PRONOUNCEMENT 26 .7.2018 O R D E R PER SHRI MANISH BORAD, AM THIS APPEAL BY THE REVENUE PERTAINING TO ASSES SMENT YEAR 2008- 09 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONE R OF INCOME-TAX (APPEALS)-II, INDORE, DATED 15.3.2017 WHICH IS ARIS ING OUT OF THE ORDER U/S 144 OF THE INCOME TAX ACT FRAMED BY THE I TO-3(1), INDORE. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: SANGHVI METAL PROCESSING AND MANUFACTURING PVT.LTD ITA 416/IND/2017 2 1. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE CASE IS NOT COVERED U /S 148/147 OF THE IT ACT EVEN WHEN THE ASSESSEE HAS FAILED TO DISCLOS E FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT DUR ING THE ORIGINAL ASSESSMENT PROCEEDINGS. 2. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.51,70,500/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INCOME FROM LTCG FR OM SALE OF 3.447 HECTARE AGRICULTURAL LAND SITUATED AT VILLAGE PIGDAMBER, TEHSIL MHOW WITHOUT APPRECIATING THE FACT THAT THE SAID LAND WAS NOT PART AND PARCEL OF ANY PROJECT BEING CARRIED OU T BY THE COMPANY, HENCE IT CANNOT BE TREATED AS STOCK IN TRA DE. FROM THE SALE DEED IT IS EVIDENT THAT THE LAND WAS SOLD AS I T IS WITHOUT CARRYING OUT ANY DEVELOPMENTAL ACTIVITY. 3. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT SALE OF LAND FOR RS.51,70 ,500/- IS NOT LIABLE TO TAX AS PER ACCOUNTING STANDARD VII HELD TO BE AP PLICABLE IN CASE OF ASSESSEE. 3. AT THE OUTSET OF HEARING OF THIS APPEAL, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE INSTANT APPEAL FILE D BY THE REVENUE IS LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFF ECT IN VIEW OF CIRCULAR NO. 3/2018 DATED 11.7.2018 ISSUED BY CENTR AL BOARD OF DIRECT TAXES. SHE SUBMITTED THAT THE TAX EFFECT IN THE INSTANT APPEAL IS RS.10,65,123/- WHICH IS LESS THAN THE PRE SCRIBED LIMIT OF RS.20 LACS REFERRED IN THE CBDT CIRCULAR REQUIRED F OR FILING APPEAL SANGHVI METAL PROCESSING AND MANUFACTURING PVT.LTD ITA 416/IND/2017 3 BY THE REVENUE BEFORE ITAT. SHE PLACED ON RECORD TH E COPY OF INCOME TAX COMPUTATION FORM SHOWING THE NET TAX PAY ABLE OF RS.10,65,123/-. SHE ALSO SUBMITTED THAT THE PRESEN T APPEAL DOES NOT FALL INTO ANY OF THE EXCEPTIONS MENTIONED IN CB DT CIRCULAR NO.3/2018 DATED 11.7.2018. PER CONTRA LD. DEPARTM ENTAL REPRESENTATIVE COULD NOT POINT OUT THAT THE ISSUE R AISED IN THIS APPEAL WAS UNDER ANY OF THE EXCEPTIONS MENTIONED IN THE CIRCULAR WHICH COULD HAVE PRECLUDED THE CASE FROM BEING DISM ISSED FOR LOW TAX EFFECT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. IN THE INSTANT APPEAL OF REVENUE THE TAX EFFECT IS RS.10,65,123/-. WE FIND THAT CBDT ISSUED CIRCULAR NO.3 OF 2018 DATED 11.7.2018 VIDE NOTIFICATION NO. F.NO.279/MISC .142/2007- ITJ(PT.) AND AS PER THIS CIRCULAR THE MONETARY LIMI TS AND OTHER CONDITIONS FOR FILING DEPARTMENTAL APPEALS (IN INCO ME TAX MATTERS) BEFORE THE INCOME TAX APPELLATE TRIBUNAL HAS BEEN S PECIFIED. AS PER THIS CIRCULAR DEPARTMENT SHALL NOT FILE THE APP EAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN CASE THE E FFECT OF TAX DOES NOT EXCEED THE MONETARY LIMIT OF RS.20 LACS. IT IS FURTHER SPECIFIED SANGHVI METAL PROCESSING AND MANUFACTURING PVT.LTD ITA 416/IND/2017 4 IN PARA 13 OF THE CBDT CIRCULAR NO.3/2018 THAT THE CIRCULAR WILL ALSO APPLY RETROSPECTIVELY ON ALL THE PENDING APPEA LS/CROSS OBJECTIONS IF THE TAX EFFECT IS BELOW THE SPECIFIED TAX LIMIT AND SUCH APPEALS SHALL BE WITHDRAWN/NOT PROCESSED. IT IS AL SO ACCEPTED BY BOTH THE PARTIES THAT THE ISSUE RAISED IN THIS APPE AL DOES NOT FALL IN ANY OF THE EXCEPTIONS PROVIDED IN PARA 10 OF THE CI RCULAR. WE THEREFORE WITHOUT GOING IN TO THE MERITS OF THE CAS E, DISMISS THE REVENUES APPEAL IN LEMINE ON ACCOUNT OF LOW TAX EFFECT. 5. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON 26 JULY, 2018. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER JULY 26 , 2018 /DEV