The ITO, Ward-1(3)(3), Ahmedabad V. Shri Manoharlal Bhuralal Kothari, Ahmedabad

ITA 449/AHD/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9582 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 25-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Assessee Lawyers: S N DIVATIA
• Keywords: Tax effect
• Section: 2(22)(e); 40(a)(ia); 268A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 449/AHD/2016 ( / ASSESSMENT YEAR : 2012-13) THE INCOME TAX OFFICER WARD-1(3)(3) AHMEDABAD / VS. SHRI MANOHARLAL BHURALAL KOTHARI PROP. MAHAVIR PAPER TRADING CO. 641, OPP. BHRAMPURI NI POLE NAVA DARWAJA, KHADIA, AHMEDABAD ./ ./ PAN/GIR NO. : ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S.K. DEV, SR.DR / RESPONDENT BY : SHRI S.N. DIVATIA, AR / DATE OF HEARING 02/07/2019 !'# / DATE OF PRONOUNCEMENT 03/07/2019 / O R D E R PER SHRI RAJPAL YADAV, JUDICIAL MEMBER : THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGA INST THE ORDER OF LD.COMMISSIONER OF INCOME TAX(APPEALS)-10, AHMEDABA D [CIT(A) IN SHORT] DATED 01/01/2016 PASSED FOR ASSESSMENT YEAR (AY) 2012-13. ITA NO.449/AHD/ 2016 ITO VS. SHRI MANOHARLAL B.KOTHARI ASST.YEAR 2012-13 - 2 - 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: (1) THAT THE LD. CIT(A), ERRED IN LAW AND ON THE F ACTS BY DELETING ADDITION OF RS.9,86,867/- MADE BY THE AO U/S.2(22)( E) OF THE I.T.ACT, WITHOUT APPRECIATING THE FACT THAT AS PER CONDITIONS OF PROVISIONS U/S.2(22)(E) OF THE ACT, THE CASE OF THE ASSESSEE CLEARLY FALLS UNDER THE AMBIT OF SECTION 2(22)(E) OF THE AC T. (2) THAT THE LD.CIT(A), ERRED IN LAW AND ON THE F ACTS BY DELETING ADDITION OF RS.5,76,239/-, MADE BY THE AO ON ACCOU NT OF COMMISSION EXPENSES WITHOUT APPRECIATING THE FACT T HAT, EXPENDITURE WAS INCURRED WITHOUT RENDERING ANY SERV ICES AND PURPOSELY DEBITED TO AVOID TAX LIABILITY. (3) THAT THE LD.CIT(A) ERRED IN LAW AND ON THE FAC TS BY DELETING ADDITION OF RS.42,11,125/- MADE BY THE ASSESSING OF FICER U/S.40(A)(IA) OF THE ACT WITHOUT APPRECIATING THE F ACT THAT THE CONDITIONS OF PROVISIONS U/S.40(A)(IA) ARE NOT FULF ILLED BY THE ASSESSEE. 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITTED THAT THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED ON A CCOUNT OF LOW TAX EFFECT INVOLVED IN IT. HE SUBMITTED THAT THE TAX E FFECT ON THE ADDITION DISPUTED BY THE REVENUE OF RS.17,84,237/- WHICH IS BELOW RS.20 LAKHS, AND THEREFORE, BY VIRTUE OF THE CBDT INSTRUCTION BE ARING NO.3 OF 2018 DATED 11.08.2018, THE REVENUE IS PROHIBITED FROM FI LING SUCH APPEAL BEFORE THE TRIBUNAL THEREFORE, THE PRESENT APPEAL I S NOT MAINTAINABLE AT THE THRESHOLD. THE TAX EFFECT ON THE IMPUGNED ADDI TION CALCULATED BY THE ASSESSEE IS AS UNDER: ITA NO.449/AHD/ 2016 ITO VS. SHRI MANOHARLAL B.KOTHARI ASST.YEAR 2012-13 - 3 - GROUND NO. ISSUE AMOUNT RS. 1 2(22)(E) 986,867 2 COMMISSION EXPENSE 576,239 3 40(A)(IA) 4,211,125 TOTAL 5,7 74,231 TAX @ 30. 9% 1,784,237 4. ON THE OTHER HAND, LD.DR IS UNABLE TO CONTROVERT THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE FOR WANT OF REQUISI TE DETAILS. THUS, ON THE STRENGTH OF THE SUBMISSIONS OF THE LD.COUNSEL FOR T HE ASSESSEE AND IN VIEW OF THE ABOVE CBDT CIRCULAR WHICH IS APPLICABLE TO A LL PENDING APPEALS AND PROVISIONS OF SECTION 268A OF THE INCOME TAX AC T, WE ARE OF THE VIEW THAT THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. IT IS ACCORDINGLY DISMISSED. HOWEVER, IT IS OBSERVED THAT IN CASE ON RE-VERIFICA TION AT THE END OF THE AO IT COMES TO THE NOTICE THAT THE TAX EFFECT I S MORE OR REVENUES CASE FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE CIRCULAR, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE T RIBUNAL FOR RECALL OF ITA NO.449/AHD/ 2016 ITO VS. SHRI MANOHARLAL B.KOTHARI ASST.YEAR 2012-13 - 4 - THIS ORDER. SUCH APPLICATION SHOULD BE FILED WITHI N THE TIME PERIOD PRESCRIBED IN THE ACT. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D DUE TO LOW TAX EFFECT. ORDER PRONOUNCED IN THE COURT ON 3 RD JULY-2019 AT AHMEDABAD. SD/- SD/- ( PRADIP KUMAR KEDIA) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 03/ 07 /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)-10, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 03.07.2019 (DICTATION-PAD 1 PAGE ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..03.07.2019 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.3.7.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 3.7.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER