ASST CIT 19(3), MUMBAI V. VISHAL DIAMONDS, MUMBAI

ITA 4543/MUM/2015

• Counselvise Citation: 454319914 RSA 2015
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 05-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISHWAS JADHAV
• Keywords: Cost of acquisition; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' SMC ' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA NO S . 4543 & 4547 /MUM/2015 (ASSESSMENT YEAR S : 2007 - 08 & 2011 - 12 ) A C I T - 19(3) VS. M/S. VISHAL DIAMONDS MATHRU MANDIR TARDEO ROAD, MUMBAI 400007 100A - PANCHRATNA, OPERA HOUSE , MUMBAI 400004 PAN - AACFV0161D APPELLANT RESPONDENT APPELLANT BY: SHRI VISHWAS JADHAV RESPONDENT BY: NONE DATE OF HEARING: 24.09. 2015 DATE OF PRONOUNCEMENT: 24 .0 9 .2015 O R D E R PER D. MANMOHAN, V.P. THESE TWO APPEALS ARE FILED AT THE INSTANCE OF THE REVENUE AND THEY PERTAIN TO ASSESSMENT YEARS 2007 - 08 AND 2011 - 12. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. THE LEARNED D.R. SUBMITTED THAT THE AO MADE AN ADDITION OF ` 29,290/ - IN A.Y. 2007 - 08 AND ` 1,22,096/ - IN A.Y. 2011 - 12 BY ESTIMATING 20% OF THE PURCHASE AS BOGUS AND ALSO DISALLOWED THE ENTIRE PURCHASE COST WHEREAS THE LEARNED CIT(A) OBSERVED THAT THE PAYMENT S ARE MADE BY ACCOUNT PAYEE CHEQUES AND THEREFORE HE DIRECTED THE AO TO DISALLOW 12.5% OF THE PURCHASES MADE IN RESPECTIVE YEARS. THE LEARNED D.R. ADMITTED THAT THE TAX EFFECT IN EACH YEAR IS LESS THAN ` 1,00,000/ - 3. IT IS WELL SETTL ED, AS PER THE CBDT INSTRUCTION NO.5/2014 DATED 10.07.2014 , THAT THE REVENUE SHOULD NOT PREFER AN APPEAL IF THE TAX EFFECT IS BELOW ` 4,00,000/ - UNLESS THERE ARE JUSTIFIABLE REASONS WHICH ARE RECORDED IN THE AUTHORISATION MEMO. THE LEARNED D.R. ADMITTED THAT THERE IS NO SUCH REASON RECORDED IN THE INSTANT CASE. ITA NO S . 4543 & 4347 /MUM/2015 M/S. VISHAL DIAMONDS 2 4. HAV ING REGARD TO THE CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT THE APPEALS FILED BY THE REVENUE DESERVE TO BE DISMISSED ON THE GROUND THAT THE TAX EFFECT INVOLVED IN EACH CASE IS LESS THAN ` 4,00,000/ - AND HENCE THE APPEALS FILED ARE IN CONTRAVENTION TO THE MANDATORY INSTRUCTION ISSUED BY THE CBDT, WHICH IS BINDING UPON THE REVENUE. 5. IN THE RESULT, APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH SEPTEMBER , 2015. SD/ - (D. MANMOHAN) VICE PRESIDENT MUMBAI, DATED: 24 TH SEPTEMBER , 2015 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 29 , MUMBAI 4. THE CIT 18 , MUMBAI CITY 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI