ACIT, New Delhi V. M/s. Cepco Industries Pvt. Ltd., New Delhi

ITA 4376/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5060 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 09-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Assessee Lawyers: RINKY SHARMA ITP
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.4376/DEL/2016 ASSESSMENT YEAR: 2012-13 ACIT, CIRCLE-5(2), NEW DELHI,. VS CEPCO INDUSTRIES PVT. LTD., PLOT NO.8, BALAJI ESTATE, GURU RAVI DAS MARG, KALKAJI, NEW DELHI 110 019. PAN: AAACC1194N (APPELLANT) (RESPONDENT) ASSESSEE BY : MS RINKY SHARMA, ITP REVENUE BY : MS ASHIMA NEB, SR. DR DATE OF HEARING : 20.08.2019 DATE OF PRONOUNCEMENT : 20.08.2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 25 TH MAY, 2016 OF THE CIT(A)-2, NEW DELHI RELATING TO AS SESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.3,77,271/- ON ACCOUNT OF TRANSACTION LOSSES. ITA NO.4376/DEL/2016 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.83,95,320/- ON ACCOUNT OF RENTAL INCOME FROM PROPERTY. 3. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE TAX EFFECT INVOLVED IN THE GROUNDS RAISED BY THE REVENUE IS BE LOW RS.50 LAKHS. THEREFORE, IN VIEW OF THE RECENT CBDT CIRCULAR DATED 8 TH AUGUST, 2019, WHEREIN THE CBDT HAS RAISED THE MONETARY LIMIT FOR FILING OF THE APPEAL BY THE REVENUE BEFORE THE TRIBUNAL TO RS.50 LAKHS, THE APPEAL FILED BY THE RE VENUE IS NOT MAINTAINABLE. REFERRING TO THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. DINESH MADHAVLAL PATEL, VIDE ITA NO.1398/AH D/2004, ORDER DATED 14 TH AUGUST, 2019 , HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISI ON, WHILE DISMISSING THE APPEAL OF THE REVENUE ON ACCOUNT OF LOW TAX EFF ECT HAS HELD THAT THE SAID CBDT CIRCULAR DATED 8 TH AUGUST, 2019 SHALL BE APPLICABLE TO THE PENDING AP PEALS IN ADDITION TO THE APPEALS TO BE FILED HENCEFORTH. HE ACCORDINGLY SUBMITTED THAT THE APPEAL FILED BY THE REVENUE SHOULD BE DISMISSED AS NOT MAINTAINABLE. 4. THE LD. DR, ON THE OTHER HAND, FAIRLY CONCEDED T HAT THE TAX EFFECT INVOLVED IN THE GROUNDS RAISED BY THE REVENUE IS, ADMITTEDLY, B ELOW RS.50 LAKHS. ITA NO.4376/DEL/2016 3 5. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS AN ADMITTE D FACT THAT THE TAX EFFECT INVOLVED IN THE GROUNDS RAISED BY THE REVENUE IS BELOW RS.50 LAKHS. THE CBDT, VIDE CIRCULAR NO.17/2019 DATED 8 TH AUGUST, 2019, HAS RAISED THE MONETARY LIMITS FOR FILING OF THE APPEALS BY THE REVENUE BEFORE THE TRI BUNAL TO RS.50 LAKHS. THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. DINESH MADHAVLAL PATEL(SUPRA) HAS HELD THAT THE SAID CIRCULAR DATED 8 TH AUGUST, 2019 SHALL BE APPLICABLE TO THE PENDING APPEALS IN ADDITION TO TH E APPEALS TO BE FILED HENCEFORTH. THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL F ROM PARA 5 TO 7 OF THE ORDER READS AS UNDER:- 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND HAV ING PERUSED THE MATERIAL ON RECORD, WE DO NOT HAVE SLIGHTEST OF HESITATION I N HOLDING THAT THE CONCESSION EXTENDED BY THE CBDT NOT ONLY APPLIES TO THE APPEAL S TO BE FILED IN FUTURE BUT IT IS ALSO EQUALLY APPLICABLE TO THE APPEALS PENDIN G FOR DISPOSAL AS ON NOW. OUR LINE OF REASONING IS THIS. THE CIRCULAR DATED 8TH A UGUST 2019 IS NOT A STANDALONE CIRCULAR. IT IS TO BE READ IN CONJUNCTIO N WITH THE CBDT CIRCULAR NO 3 OF 2018 (AND SUBSEQUENT AMENDMENT THERETO), AND ALL IT DOES IS TO REPLACE PARAGRAPH NOS. 3 AND 5 OF THE SAID CIRCULAR. THIS I S EVIDENT FROM THE FOLLOWING EXTRACTS FROM THE CIRCULAR DATED 8TH AUGUST 2019: 2. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGATI ON. 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 MONET ARY LIMIT (RS.) 1 BEFORE APPELLATE TRIBUNAL 50,00,000 2 BEFORE HIGH COURT 1,00,00,000 3 BEFORE SUPREME COURT 2,00,00,000 3. FURTHER, WITH A VIEW TO PROVIDE PARITY IN FILING OF APPEALS IN SCENARIOS WHERE SEPARATE ORDER IS PASSED BY HIGHER APPELLATE AUTHORITIES FOR EACH ASSESSMENT YEAR VIS-A-VIS WHER E COMPOSITE ORDER ITA NO.4376/DEL/2016 4 FOR MORE THAN ONE ASSESSMENT YEARS IS PASSED. PARA 5 OF THE CIRCULAR IS SUBSTITUTED BY THE FOLLOWING PARA: 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX E FFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTE D ISSUES IN THE CASE OF EVERY ASSESSEE. IF IN THE CASE OF AN ASSESS EE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPE AL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS I N WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS TH E MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. FURTHER, EVEN I N THE CASE OF COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTH ORITY WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON I SSUES IN MORE THAN ONE ASSESSMENT YEAR NO APPEAL SHALL BE FI LED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFF ECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN CASE WHE RE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, E ACH ASSESSEE SHALL BE DEALT WITH SEPARATELY 4. THE SAID MODIFICATIONS SHALL COME INTO EFFECT FR OM THE DATE OF ISSUE OF THIS CIRCULAR. 6. CLEARLY, ALL OTHER PORTIONS OF THE CIRCULAR NO. 3 OF 2018 (SUPRA) HAVE REMAINED INTACT. THE PORTION WHICH HAS REMAINED INT ACT INCLUDES PARAGRAPH 13 OF THE AFORESAID CIRCULAR WHICH IS AS FOLLOWS: 13. THIS CIRCULAR WILL APPLY TO SLPS/ APPEALS/ CROS S OBJECTIONS/ REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNA L AND IT SHALL ALSO APPLY RETROSPECTIVELY TO PENDING SLPS/ APPEALS/ CRO SS OBJECTIONS/REFERENCES. PENDING APPEALS BELOW THE SP ECIFIED TAX LIMITS IN PARE 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. 7. IN VIEW OF THE ABOVE DISCUSSIONS, WE HEREBY HOLD THAT THE RELAXATION IN MONETARY LIMITS FOR DEPARTMENTAL APPEALS, VIDE CBDT CIRCULAR DATED 8TH AUGUST 2019 (SUPRA) SHALL BE APPLICABLE TO THE PEND ING APPEALS IN ADDITION TO THE APPEALS TO BE FILED HENCEFORTH. 6. SINCE, IN THE INSTANT CASE, ADMITTEDLY, THE TAX EFFECT INVOLVED IN THE GROUNDS RAISED BY THE REVENUE IS BELOW RS.50 LAKHS, THEREFO RE, FOLLOWING THE DECISION OF THE AHMEDBAD BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. DINESH MADHAVLAL ITA NO.4376/DEL/2016 5 PATEL(SUPRA) WHEREIN IT IS HELD THAT THE SAID CIRCULAR IS APPLIC ABLE EVEN TO PENDING APPEALS, WE HOLD THAT THE APPEAL FILED BY THE REVEN UE IS NOT MAINTAINABLE AND HAS TO BE DISMISSED. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEALS FILED BY THE RE VENUE IS DISMISSED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON C ONCLUSION OF THE HEARING TODAY ITSELF I.E., ON 20.08.2019. SD/- SD/- (SUCHITRA KAMBLE) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMFBER DATED: 20 TH AUGUST, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI