The ACIT.,Circle-2(1)(1), Ahmedabad V. Gujarat State Financial Services Limited., Ahmedabad

ITA 433/AHD/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5111 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 21-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P SRIVASTAVA
• Keywords: Tax effect
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER ./ITA NO. 433/AHD/2018 ( / ASSESSMENT YEAR : 2014-15) THE ACIT CIRCLE-2(1)(1) AHMEDABAD / VS. GUJARAT STATE FINANCIAL SERVICES LTD. PLOT NO.9 SANGHI CEMENT GODOWN, SARKHEJ SANAND HIGHWAY, VILLAGE: ULARIA AHMEDABAD-382 210 ./ ./ PAN/GIR NO. : AAACG 5581 B ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI B.P. SRIVASTAVA, SR.DR / RESPONDENT BY : SHRI SANJAY R. SHAH, AR / DATE OF HEARING 31/07/2019 !'# / DATE OF PRONOUNCEMENT 16 /10/2019 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS), AHMEDABAD-5, [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A )-5/DCIT CIR.2(1)(1)/10134/2017-18 DATED 13/11/2017 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS 'THE ACT') DATED 27/10/2016 RELEVAN T TO ASSESSMENT YEAR (AY) 2014-15. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- ITA NO.433/AHD/2018 ACIT VS. GUJARAT STATE FINANCIAL SERVICES LTD. ASST .YEAR - 2014-15 - 2 - 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE DISALLOWANCE OF RS.68,29,540/- MADE U/S.14A OF THE ACT IN RESPECT OF INTEREST EXPENDITURE? 1.1. THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ON US LIES ON THE ASSESSEE TO DEMONSTRATE THAT IT HAD INTEREST FR EE FUNDS AVAILABLE WITH IT FOR MAKING SUCH INVESTMENT AND NO T OTHER WAY AROUND. 1.2. THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT AS PER SECTION 106 OF EVIDENCE ACT, WHEN ANY FACT IS ESPECIALLY WI THIN THE KNOWLEDGE OF ANY PERSON, THE BURDEN OF PROVING THE FACT IS UPON HIM. 2. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 2. AT THE TIME OF DICTATION, IT WAS NOTICED THAT T HE TAX EFFECT IN THE IMPUGNED APPEAL FILED BY THE REVENUE IS LESS THAN 50 LAKHS. THEREFORE, THE SAME IS NOT MAINTAINABLE IN VIEW OF THE RECENT CIRCULAR ISSUED BY THE CBDT BEARING NO. 17/2019 DATED 8 TH AUGUST 2019. HOWEVER, WE NOTE THAT THE IMPUGNED APPEAL WAS HEARD DATED 31 JULY 20 19 BEFORE THE ISSUANCE OF SUCH CIRCULAR BY THE CBDT. BUT THE ORDE R AFTER HEARING THE APPEAL WAS RESERVED FOR THE PRONOUNCEMENT. AS THE O RDER WAS NOT PRONOUNCED TILL 8 TH AUGUST 2019 WHEN CBDT WITHDREW ITS APPEALS PENDING BEFORE THE ITAT INVOLVING TAX EFFECT LESS T HAN 50 LAKHS, THEREFORE, WE ARE OF THE VIEW THAT THE IMPUGNED CBD T CIRCULAR IS ALSO APPLICABLE IN SUCH CASES I.E. THE HEARING WAS CONCL UDED BUT THE ORDERS ITA NO.433/AHD/2018 ACIT VS. GUJARAT STATE FINANCIAL SERVICES LTD. ASST .YEAR - 2014-15 - 3 - WERE RESERVED FOR PRONOUNCEMENTS TILL THE DATE OF T HE ANNOUNCEMENT OF SUCH CIRCULAR. 2.1 THE RELEVANT EXTRACT OF THE CIRCULAR ISSUED DAT ED 8 AUGUST 2019 READS AS UNDER: 2. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGA TION. IT HAS BEEN DECIDED BY THE BOARD THAT MONETARY LIMITS FOR FILIN G OF APPEALS IN INCOME-TAX CASES BE ENHANCED FURTHER THROUGH AMENDM ENT IN PARA 3 OF THE CIRCULAR MENTIONED ABOVE AND ACCORDINGLY. THE T ABLE FOR MONETARY LIMITS SPECIFIED IN PARA 3 OF THE CIRCULAR SHALL RE AD AS FOLLOWS: S.NO. APPEALS/SLPS IN INCOME-TAX MATTERS MONETARY L IMIT (RS.) 1 BEFORE APPELLATE TRIBUNAL 50,00,000 2 BEFORE HIGH COURT 1,00,00,000 3 BEFORE SUPREME COURT 2,00,00,000 FROM THE ABOVE, IT IS CLEAR THAT THE IMPUGNED APPEA LS FILED BY THE REVENUE ARE NOT MAINTAINABLE AS THE TAX EFFECT/PENA LTY AMOUNT IS LESS THAN 50 LAKHS. THIS FACT CAN ALSO BE VERIFIED FROM THE G ROUNDS OF APPEAL FILED BY THE ASSESSEE AS MENTIONED ABOVE. 3. BEFORE PARTING, WE ALSO NOTE THAT THERE ARE CERT AIN EXCEPTIONS SPECIFIED IN THE CBDT CIRCULAR BEARING NO. 17 OF 20 19 DATED 8 AUGUST 2019 READ WITH CIRCULAR NO. 3 OF 2018 DATED 11 TH JULY 2018 WHERE THE TAX LIMIT/ PENALTY AMOUNT OF RS. 50 LAKHS WILL NOT BE A PPLIED. AS SUCH, IN THOSE CASES THE APPEAL OF THE REVENUE WILL STAND AN D THE SAME WILL NOT BE HIT BY THE IMPUGNED CIRCULAR DESPITE THE TAX EFFECT IS LESS THAN 50 LAKHS. THEREFORE, WE WANT TO MAKE IT CLEAR THAT IF THE REV ENUE ON THE ITA NO.433/AHD/2018 ACIT VS. GUJARAT STATE FINANCIAL SERVICES LTD. ASST .YEAR - 2014-15 - 4 - VERIFICATION FINDS THAT THE IMPUGNED CASE OF THE AS SESSEE FALLS IN THE EXCEPTION AS PROVIDED IN THE CIRCULAR OR TAX EFFECT EXCEEDS, THEN IT WILL BE AT ITS LIBERTY TO MOVE AN APPLICATION FOR THE RECAL LING OF THIS ORDER OF THE TRIBUNAL WITHIN THE PRESCRIBED TIME UNDER THE PROVI SIONS OF SECTION 254(2) OF THE ACT. IN VIEW OF THE ABOVE, WE DISMISS THE AP PEAL FILED BY THE REVENUE AS NOT MAINTAINABLE. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 16/10/20 19 SD/- SD/- (MS. MADHUMITA ROY) (WASEEM A HMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 16/10/2019 &.., .(.. / T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A), AHMEDABAD-5. 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) $%, / ITAT, AHMEDABAD