The ACIT, 3(1), Bhopal V. Shri Nathulal Jain, Vidisha

ITA 475/IND/2010

• Counselvise Citation: 47522714 RSA 2010
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 14-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Tax effect
• Section: 260A; 131; 68; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.475/IND/2010 AY: 2006-07 ASSTT. COMMISSIONER OF INCOME TAX 3(1), INDORE ..APPELLANT V/S. NATHULAL JAIN VIDISHA PAN ADUPJ-2821P ..RESPONDENT C.O.NO.26/IND/2010 ARISING OUT OF ITA NO. 475/IND/2010 NATHULAL JAIN VIDISHA .....OBJECTOR VS ASSTT. COMMISSIONER OF INCOME TAX 3(1), INDORE 2 DEPTT. BY : SHRI ARUN DEWAN, SR. DR ASSESSEE : SHRI PRAKASH JAIN, FCA ORDER PER JOGINDER SINGH, JUDICIAL MEMBER AGGRIEVED BY THE ORDER DATED 3 RD MARCH, 2010 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE IS IN APPEAL ON THE GROUND THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS. 7,85,000/- OUT OF TOTA L ADDITION OF RS. 8,85,000/- MADE BY THE ASSESSING OF FICER ON ACCOUNT OF UNEXPLAINED LOAN CREDIT U/S 68 OF TH E ACT WHEREAS THE ASSESSEE HAS FILED THE CROSS OBJECTION ON THE GROUND THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE ACTIO N OF THE ASSESSING OFFICER IN RESPECT OF THE ADDITION OF RS. 1 LAC MADE U/S 68 OF THE ACT WITHOUT CONSIDERING THE FACT S OF THE CASE AND SUBMISSIONS MADE BEFORE HIM. 2. DURING HEARING OF THIS APPEAL, THE LD. COUNSEL F OR ASSESSEE CONTENDED THAT THE TAX EFFECT IN THE PRESE NT 3 APPEAL IS BELOW THE PRESCRIBED LIMIT, THEREFORE, TH E APPEAL OF THE REVENUE DESERVES TO BE DISMISSED ON THIS COU NT ITSELF BY FURTHER SUBMITTING THAT THE TAX EFFECT IS RS. 2,52,450/-, THEREFORE, NO APPEAL CAN BE FILED BEFOR E THE TRIBUNAL WHICH IS HAVING THE TAX EFFECT LESS THAN R S. 3 LACS. THIS FACTUAL MATRIX WAS FAIRLY CONSENTED BY T HE LEARNED SR. DR BUT SUBMITTED THAT THE CIRCULAR OF C BDT IS EFFECTIVE FROM A PARTICULAR DATE, THEREFORE, THE SUBMISSION OF THE ASSESSEE IS NOT TENABLE. IN REPLY , THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT IDENTICALLY THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT IT IS APPLICABLE TO THE APPEALS WHICH ARE PENDING BEFORE THE TRIBUNAL AND PLACED RELIANCE UPON THE DECISION IN C IT V. ASHOK KUMAR MANIBHAI PATEL & COMPANY (2009) 317 ITR 386 (MP), ITO VS. M/S LAXMI JEWELS PRIVATE LIMITED (ITA NO. 2165/MUM/2010). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON FILE. UNDISPUTED LY, THE 4 TAX EFFECT IN THE PRESENT APPEAL IS BELOW THE PRESC RIBED MONETARY LIMIT IN FILING THE APPEAL BEFORE THE TRIB UNAL. THEREFORE, WE ARE REPRODUCING HEREUNDER THE DECISIO N OF THE TRIBUNAL IN THE CASE OF RAJAN CLOTH STORES (ITA NO. 365/IND/2010) ORDER DATED 31.5.2011 :- THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, INDORE, DATED 4.3.2010 ON THE GROUND THAT THE LD. CIT(A) ERRED IN OVERLOOKING THE PROVIS ION OF SEC. 275(1A) OF I.T. ACT AND DELETING PENALTY U/S 271(1)(C) FOR RS.2,32,780/-. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I PRADEEP KUAMR MITRA, LD. SR. DR FOR THE REVENUE AND SHRI S.S. DESHPANDE, LD. COUNSEL FOR THE ASSESSEE. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE TAX EFFECT IN THE PRESENT APPEAL IS BELOW PRESCRIBED MONETARY LIMIT, THEREFORE, STRAIGHT WAY, THE APPEAL OF THE REVENUE MAY BE DISMISSED. THE LD. SR. DR FAIRLY ADMITTED THAT THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSIO N, ON THE ISSUE OF TAX EFFECT, THE BENCH IN THE CASE O F ACIT VS. M/S. SHRIRAM NUTRIENTS LTD. IN ITA NO.123/IND/2010 (A.Y. 2002-03) VIDE ORDER DATED 28.10.2010 HELD AS UNDER: THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER O F THE LEARNED CIT(A)-UJJAIN, DATED 16.12.2009 ON THE GROUND WHETHER IN THE FACTS AND CIRCUMSTANCES OF TH E CASE, LD. CIT(A) ERRED IN TREATING THE ASSESSMENT M ADE BY THE A.O. AS INFRUCTUOUS, WITHOUT APPRECIATING TH E FACT THAT OTHERWISE ON 6.3.2006 (THE DATE OF ISSUE OF NOTICE) THE A.O. WAS EMPOWERED TO ISSUE NOTICE U/S 148 FOR THE A.Y. 2002-03, IN VIEW OF THE PROVISIONS OF 5 SECTION 149(1)(A) READ WITH SECTION 151(1) OF THE I T ACT, 1961? 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I S.S. DESHPANDE, LD. COUNSEL FOR THE ASSESSEE AND SHRI P.K. MITRA, LEARNED SENIOR DR. THE CRUX OF ARGUMENT IS THAT THE TAX EFFECT IN THE PRESENT APPE AL IS BELOW MONETARY PRESCRIBED LIMIT, THEREFORE, STRAIGH T WAY THE APPEAL OF THE REVENUE MAY BE DISMISSED. THE LD. SR. DR SHRI P.K. MITRA FAIRLY ADMITTED THAT THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. IN THE PRESENT APPEAL, THE INC OME ASSESSED IS RS.1,37,880/- AND THE TAX INVOLVED IS RS.40,611/- ONLY, THEREFORE, WITHOUT GOING INTO MER ITS OF THE CASE ON THE PRIMARY OBJECTION OF MONETARY LIMIT , THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. OUR VIEW IS SUPPORTED BY THE DECISION OF THE TRIBUNAL I N HIMANSHU FLOUR MILLS (ITA NO.506/IND/2009, ORDER DATED 26.5.2010). THE RELEVANT PORTION OF THE SAME IS REPRODUCED HEREUNDER: THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 26.8.2009 ON THE GROUND TH AT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 5,46,831/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON FIXED ASSETS AN D ALSO IN DIRECTING THE ASSESSING OFFICER TO ALLOW CA RRY FORWARD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD THE LEARNED COUNSELS FROM BOTH THE SIDES AND CONSIDERED THE ARGUMENTS ADVANCED BY THEM. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE RAISED A PRELIMINARY OBJECTION THAT SINCE THE TAX EFFECT IS BELOW THE PRESCRIBED MONETARY LIMIT, THEREFORE, THE DEPARTMEN T IS NOT PERMITTED TO FILE THIS APPEAL AND THE SAME DESE RVES TO BE DISMISSED ON THIS SHORT GROUND ITSELF. HOWEVE R, 6 THE LEARNED SR. DR FAIRLY AGREED THAT THE TAX EFFEC T IS BELOW PRESCRIBED MONETARY LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. IN VIEW OF THE ABOVE ASSERTI ON OF THE LEARNED RESPECTIVE COUNSELS, WE ARE OF THE CONSIDERED OPINION THAT THIS APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. OUR VIEW FINDS SUPPORT FR OM THE DECISION DATED 2 ND DECEMBER, 2009 OF THE TRIBUNAL IN THE CASE OF HIMANSHU FLOOR MILLS (ITA NO. 507/IND/2009). THE RELEVANT PORTION OF THE SAME IS REPRODUCED HEREUNDER :- THIS APPEAL IS BY THE REVENUE CHALLENGING THE ORD ER OF THE CIT(A) DATED 26.8.2009. DURING HEARING OF THIS APPEAL, I HAVE HEARD SMT. APARNA KARAN, LEARNED SENIOR DR, AN D NO- BODY WAS PRESENT FOR THE ASSESSEE. REGISTERED NOTI CE OF HEARING WAS SENT TO THE ASSESSEE ON 11.11.2009. TH E ASSESSEE NEITHER PRESENTED ITSELF NOR MOVED ANY APP LICATION FOR ADJOURNMENT, THEREFORE, I HAVE NO OPTION BUT TO PROCEED EX-PARTE QUA THE ASSESSEE AND DISPOSE OF THIS APPEA L ON THE BASIS OF MATERIAL AVAILABLE IN THE FILE. 2. THE FIRST GROUND RAISED IS THAT THE LEARNED FIRS T APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF RS.4,26 ,936/- MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON THE FIXED ASSETS. ON QUESTIONING FROM THE BENCH ABOUT THE TAX EFFECT, IT WAS FAIRLY POINTED OUT THAT THE TAX EFFE CT IS BELOW THE PRESCRIBED MONETARY LIMIT. I HAVE CONSIDERED T HE SUBMISSIONS PUT-FORTH BY THE LEARNED SENIOR DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. BRIEF FACTS ARE THAT THE ASSESSEE CLAIMED DEPREC IATION OF RS. 8,53,871/- ON THE FIXED ASSETS. THE LEARNED AS SESSING OFFICER BASED UPON THE COMMENTS OF THE AUDITORS IN THE NOTES TO ACCOUNTS AND THE NATURE OF THE BUSINESS, D ISALLOWED 50% OF THE DEPRECIATION CLAIMED BY THE ASSESSEE WHI CH WAS 7 WORKED OUT AT RS.4,26,936/-. BEFORE THE LEARNED FI RST APPELLATE AUTHORITY THE SUBMISSION OF THE ASSESSEE WAS THAT THE FIXED ASSETS WERE DULY REFLECTED IN THE BALANCE SHEET DURING THE RELEVANT PERIOD AND THERE WAS NO NEW ADD ITION IN THE ASSETS. THE DEPRECIATION ON ALL THE ASSETS WAS REGULARLY ALLOWED SINCE THE DATE OF INCLUSION IN THE BALANCE SHEET. EVEN IN THE IMPUGNED ORDER THERE IS A FACTUAL FINDI NG THAT THE ASSESSEE FROM THE DATE OF INCLUSION HAS NOT SHO WN IN ADDITION TO THE BLOCK OF ASSETS AS THE WDV AS ON 31 .3.2002 WAS TAKEN AS BASIS AFTER REDUCING THE SALE OF SOME ASSETS FOR THE CALCULATION OF ALLOWABLE DEPRECIATION FOR THE A SSESSMENT YEAR 2003-04 AND THE ASSESSEE WAS ALLOWED DEPRECIAT ION FOR THE ASSESSMENT YEAR 2002-03. THE REVENUE HAS NOT A DDUCED ANY EVIDENCE CONTROVERTING THE FACTUAL FINDING MENT IONED IN THE IMPUGNED ORDER, THEREFORE, THE DISALLOWANCE IS DESIRABLE IN THE IMPUGNED APPEAL. EVEN OTHERWISE ON THE TAX EFFECT THIS APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSE D. THIS VIEW FINDS SUPPORT FROM THE DECISION OF THE TRIBUNA L IN THE CASE OF R.K. HOTELS (ITA NO.383/IND/09). THE RELEVA NT PORTION OF THE ORDER IS REPRODUCED HEREUNDER :- THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER O F LD. CIT-(A)-II, BHOPAL, DATED 31.3.2009 FOR THE AY 2005 -06 ON THE GROUND THAT THE LD. FIRST APPELLATE AUTHORITY E RRED IN DELETING THE ADDITION OF 6,37,206/- MADE BY THE AO BY APPLYING THE PROVISIONS OF SEC. 154(3) ON ACCOUNT O F INCORRECTNESS AND INCOMPLETENESS OF BOOKS OF ACCOUN T.. 2. DURING HEARING OF THE APPEAL, WE HAVE HEARD SMT. APARNA KARAN, LD. SR. DR AND SHRI H.P. VERMA ALONG WITH SHRI ASHISH GOYAL, LD. COUNSEL FOR ASSESSEE. AT THE OUTSET, IT WAS POINTED OUT THAT THERE IS TYPOGRAPHICAL ERRO R IN MENTIONING THE FIGURE OF RS.6,37,206/- IN THE GROU ND OF APPEAL AS THE CORRECT FIGURE IS RS.3,94,732/-. THE ASSERTION OF THE ASSESSEE WAS CONSENTED TO BE CORRECT BY THE LD. SR. DR. FURTHER, IT WAS POINTED OUT THAT THE TAX EFFECT IS ALSO BELOW MONETARY LIMIT, THEREFORE, THE APPEAL OF THE REVENUE 8 MAY BE DISMISSED. THE LD. SR. DR FAIRLY AGREED TO T HE SUBMISSION OF THE ASSESSEE TO THE EXTENT THAT THE T AX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT FOR FILING THE A PPEAL BEFORE THE TRIBUNAL. S.NO. AUTHORITY MONETARY LIMIT (IN RS.) 1 ITAT 2,00,000/ - 2 APPEAL UNDER SECTION 260A BEFORE HIGH COURT 4,00,000/ - 3 SUPREME COURT 10,00,000/ - THE BOARD FURTHER CLARIFIED THE TAX EFFECT, WHICH M EANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABL E, HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAINST WHICH APPEAL IS INTENDED TO BE FILED. HOWEVER, THE TAX WILL NOT I NCLUDE ANY INTEREST THEREON. IN CASES OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDU CED IN THE ORDER TO BE APPEALED AGAINST. IN THE PRESE NT APPEAL, THE TOTAL DISPUTED ADDITION IS RS.3,94,732 /-, THEREFORE, AS AGREED/CANVASSED BY LD. REPRESENTATIV ES FROM BOTH SIDES, THE TAX EFFECT IS BELOW RS.2 LAKHS , THE LIMIT PRESCRIBED FOR FILING APPEAL BEFORE THE TRIBU NAL, THEREFORE, APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. OUR VIEW FINDS SUPPORT FROM THE DECISIO N OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASES O F SHRI J.S. LUTHRA (ITA NO.712 TO 715/CHD/2009) AND ITO, W ARD 2(2), ROPAR VS. THE JHALLIAN KALAN PRI. COOP MILK P RODUCE SOCIETY LTD., JHALLIAN KALAN DISTT. ROPAR (ITA NO.721/CHD/2009). THEREFORE, WITHOUT GOING INTO THE MERITS OF THE CASE, FACTS AND THE JUDICIAL PRONOUNC EMENTS (SUPRA), THIS APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES ON 6.10.2009. IN THE LIGHT OF THE ABOVE, THIS GROUND OF THE REVEN UE IS HAVING NO MERIT, THEREFORE, THE STAND OF THE LEARNE D CIT(A) IS AFFIRMED CONSEQENTLY, THIS GROUND OF THE REVENUE IS DISMISSED. 9 4. THE NEXT GROUND RAISED IS THAT THE LEARNED FIRST APPELLATE AUTHORITY ERRED IN DIRECTING THE ASSESSIN G OFFICER TO ALLOW CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS WITHOUT ANY BASIS. THE CONTENTION RAISED ON BEHALF OF THE REVENUE IS THAT IN COMING TO A PARTICULAR CO NCLUSION, NO BASIS HAS BEEN ADDUCED BY THE LEARNED FIRST APPE LLATE AUTHORITY AND IT WAS RIGHTLY DISALLOWED BY THE ASSE SSING OFFICER IN THE ABSENCE OF PROOF FURNISHED BY THE AS SESSEE. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. THE STAND OF THE REV ENUE IS THAT PROOF OF LAST YEARS LOSSES WAS NOT FURNISHED BY THE ASSESSEE CONSEQUENTLY THESE ARE NOT ALLOWABLE WHERE AS BEFORE THE LEARNED FIRST APPELLATE AUTHORITY THERE IS A FACTUAL FINDING THAT IN ALL PREVIOUS YEARS RETURNS WERE DULY FILED BY THE ASSESSEE AND THE SAME WERE AVAILABLE O N RECORD OF THE ASSESSING OFFICER. IN THE IMPUGNED OR DER THE LEARNED FIRST APPELLATE AUTHORITY HAS DIRECTED THE ASSESSING OFFICER TO ALLOW CARRY FORWARD OF BROUGHT FORWARD L OSSES OF EARLIER YEARS WHICH WERE NOT SET OFF AFTER VERIFICA TION OF RECORDS OF EARLIER YEARS. EVEN OTHERWISE, IT IS A CASE OF ASSESSED LOSS WHICH HAS NOT BEEN SET OFF. CONSEQUE NTLY, WE ARE IN AGREEMENT THAT IN VIEW OF THE PROVISIONS OF SECTION 72 IT SHOULD BE ALLOWED. CONSEQUENTLY, THE RE IS NO GRIEVANCE TO THE REVENUE SINCE IT HAS BEEN REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER TO DO THE NEED FUL AFTER VERIFICATION OF RECORDS OF EARLIER YEARS. MY VIEW FINDS SUPPORT FROM THE RATIO LAID DOWN IN CIT V. J.H. GOT LA; 156 ITR 323 (SC); TARA DEVI BEHL V. CIT; 218 ITR 541 ( P&H). THE HONBLE APEX COURT IN THE CASE OF CIT V. MAHALA XMI SUGAR MILLS CO. LTD.; 160 ITR 920 EVEN WENT TO THE EXTENT THAT ITO MUST ALLOW SET OFF EVEN IF IT IS NOT CLAIM ED BY THE ASSESSEE BECAUSE A DUTY IS CAST UPON THE ITO TO APP LY THE RELEVANT PROVISIONS OF THE INDIAN INCOMETAX ACT FOR THE PURPOSE OF DETERMINING THE TRUE FIGURE OF ASSESSEE S TAXABLE INCOME AND THE CONSEQUENTIAL TAX LIABILITY. MERELY BECAUSE THE ASSESSEE FAILS TO CLAIM THE BENEFIT OF SET OFF CANNOT RELIEVE THE ITO OF HIS DUTY TO APPLY SECTION 72 IN AN APPROPRIATE CASE. IN VIEW OF THESE FACTS AND JUDIC IAL PRONOUNCEMENTS, I HAVE FOUND NO INFIRMITY IN THE IMPUGNED ORDER, CONSEQUENTLY, THIS GROUND OF THE RE VENUE 10 ALSO FAILS. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF HEARING ON 1.12.2009. IN THE AFORESAID CASE, THE TRIBUNAL HAS PASSED A DE TAILED ORDER, THEREFORE, WITHOUT GOING INTO THE MERITS OF THE CASE AND RESPECTFULLY FOLLOWING THE AFORESAID DECISION, THIS APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 26 TH MAY, 2010. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 28.10.2010. 4. HOWEVER, THE CBDT VIDE INSTRUCTION NO.3/2011 DATED 9.2.2011 REVISED/RAISED THE MONETARY LIMIT FO R FILING THE APPEAL BY THE DEPARTMENT AS UNDER: S.NO. AUTHORITY MONETARY LIMIT (IN RS.) 1 ITAT 3,00,000/ - 2 APPEAL UNDER SECTION 260A BEFORE HIGH COURT 10,00,000/ - 3 SUPREME COURT 25,00,000/ - THE ABOVE INSTRUCTIONS ARE APPLICABLE TO THE APPEAL S FILED ON OR AFTER 9.2.2011, ISSUED U/S 268A(1) OF T HE I.T. ACT, 1961. AS FAR AS THE MERIT OF THE CASE IS CONCE RNED, IT HAS ALREADY BEEN EXAMINED BY THE LD. CIT(A) BY KEEPING THE PROVISIONS OF SEC. 275(1)(A) OF THE ACT . SINCE THE APPEAL OF THE ASSESSEE WAS DECIDED BY THE LD. CIT(A) VIDE ORDER DATED 4.11.2004, CONSEQUENTLY , THE PENALTY PROCEEDINGS WERE SUPPOSED TO BE DISPOSED OF BY 31.3.2006 WHEREAS THE SAME WAS DECIDED VIDE ORDER DATED 22.4.2009. IN VIEW OF THIS FACT, THE ORDER WAS RIGHTLY QUASHED, CONSEQUENTLY, WE 11 FIND NO INFIRMITY IN THE STAND OF THE LD. CIT(A). T HE SAME IS UPHELD. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES A T THE CONCLUSION OF THE HEARING ON 31.5.2011. IDENTICALLY THE BENCH IN THE CASE OF VINOD BANSAL, ITA NO. 275/IND/2010 VIDE ORDER DATED 22.6.2011 DISMISS ED THE APPEAL OF THE REVENUE ON THE ISSUE OF TAX EFFEC T. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T V. ASHOK KUMAR MANIBHAI & COMPANY (2009) 317 ITR 386 HELD AS UNDER :- THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF T HE FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, THE ASSESSEE ON THE FILE OF THE DEPARTMENT HAVE BEEN INCREASED CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW O F THE MATTER, THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT LESS THAN RS. 2 LAKHS. THE SAME POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOARD S CIRCULAR DATED MARCH 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STI LL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCE WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX EFFECT. 12 4. VIDE BOARD INSTRUCTION NO. 5/2008 DATED 15.5.200 8 THE MONETARY LIMIT AND OTHER CONDITIONS FOR FILING THE APPEAL OF THE DEPARTMENT (IN INCOME TAX MATTERS) BE FORE THE APPELLATE TRIBUNAL, HIGH COURT AND SUPREME COUR T WAS SPECIFIED. HOWEVER, IN SUPPRESSION OF THESE INSTRUCTIONS, VIDE INSTRUCTION NO. 3/2011 DATED 9.2 .2011 THE BOARD INCREASED THE MONETARY LIMIT AS DISCUSSED ABOVE (TABLE). THE TRIBUNAL (MUMBAI BENCH) IN THE CASE OF M/S LAXMI J. JEWEL PRIVATE LIMITED (ITA NO. 2165/MUM/2010) BY FOLLOWING THE DECISION IN THE CAS E OF HONBLE BOMBAY HIGH COURT IN CIT V. MADHUKAR K. INAMDAR (HUF) WHEREIN IT WAS HELD THAT THE CIRCULAR WILL BE APPLICABLE TO THE CASES PENDING BEFORE THE COURT EITHER FOR ADMISSION OR FOR FINAL DISPOSAL AND HELD THAT INSTRUCTION NO. 3 DATED 9.2.2011 IS APPLICABLE FOR THE APPEAL PREFERRED BY THE REVENUE AND DISMISSED THE S AME ON TAX EFFECT BY FURTHER CONSIDERING THE DECISION I N THE CASE OF LIVING STONES JEWELLERY PRIVATE LIMITED VS. DCIT; 31 SOT 323. RESPECTFULLY FOLLOWING THE AFORESAID 13 DECISIONS, WE DISMISS THE APPEAL OF THE REVENUE ON THE ISSUE OF TAX EFFECT/MONETARY LIMIT. 5. NOW WE SHALL TAKE UP THE CROSS OBJECTION FILED B Y THE ASSESSEE WHEREIN THE ONLY GROUND RAISED IS THAT LD. FIRST APPELLATE AUTHORITY ERRED IN CONFIRMING THE ADDITIO N OF RS. 1 LAC MADE U/S 68 WITHOUT CONSIDERING THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE HIM. THE FACTS , IN BRIEF ARE THAT THE ASSESSEE HAS TAKEN A LOAN OF RS . 1 LAC FROM SHRI RAVINDRA JAIN BY ACCOUNT PAYEE CHEQUE. TH E ASSESSING OFFICER DID NOT ACCEPT THE GENUINENESS OF THE CASH CREDIT AND MADE THE ADDITION U/S 68 OF THE ACT . BY THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) CONFIRMED THE ADDITION AND THE ASSESSEE IS BEFORE US. THE LD. COUNSEL FOR ASSESSEE INVITED OUR ATTENTION TO THE SUMMONS DATED 11.8.200 8 ISSUED U/S 131 OF THE ACT TO SHRI RAVINDRA KUMAR JA IN, COPY OF ACCOUNT FOR THE PERIOD FROM 1.4.2005 TO 31.3.2006, CERTIFICATE OF MEMBERSHIP FOR THE YEARS 2005 14 TO 2007 FROM VIDISHA VYAPAR MAHASANGH AND THE AFFIDAVIT OF THE ASSESSEE DATED 18.7.2008 (SWORN ON 19.7.2008). A PLEA WAS ALSO RAISED THAT THE ASSESS EE IS HAVING AGRICULTURAL INCOME AND READ OVER THE CONTEN TS OF THE AFFIDAVIT BEFORE US. 6. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECOR D PERUSED. THE ADDITION HAS BEEN MADE BY THE ASSESSI NG OFFICER U/S 68 OF THE ACT. THERE IS NO DISPUTE TO T HE WELL SETTLED PROPOSITION OF LAW THAT IN CASE OF CASH CRE DIT, NOT ONLY IDENTITY BUT GENUINENESS OF THE TRANSACTION AN D CREDIT WORTHINESS OF LOAN CREDITOR IS ALSO REQUIRED TO BE PROVED BY THE ASSESSEE. IN THE INSTANT CASE BEFORE US, THE ASSESSEE HAS TAKEN LOAN OF RS. 1 LAC FROM SHRI RAVINDRA JAIN SON OF SHRI GURUPRASAD JAIN WHO WAS RUNNING A SHOP OF ELECTRIC EQUIPMENTS. HE WAS ALSO CARRYING OUT REPAIRING WORK IN THE SAID SHOP. APAR T FROM THE INCOME FROM THIS SHOP, THE ASSESSEE WAS HAVING AGRICULTURAL LAND ADMEASURING 10 BIGHAS IN VILLAGE 15 MANUPURA, SIYASI VIKAS KHAND, VIDISHA, WHICH IS TOT ALLY IRRIGATED. TO PROVE THE OWNERSHIP AND CULTIVATION OF THE LAND, THE ASSESSEE HAS FILED COPY OF KHASRA GIRDAVA RI BEFORE THE ASSESSING OFFICER AND AN AFFIDAVIT WAS A LSO FILED AS REQUIRED BY THE ASSESSING OFFICER. SHRI RA VINDRA JAIN WAS MAINTAINING HIS SAVINGS BANK ACCOUNT WITH BHOPAL KSHETRIYA GRAMIN BANK WITH EFFECT FROM JANUA RY, 1988 AND ADVANCE RS. 1 LAC TO THE ASSESSEE WAS GIVE N VIDE ACCOUNT PAYEE CHEQUE OUT OF HIS SAVINGS AND AGRICULTURAL PROCEEDS. HE HAS DULY EXPLAINED THE S OURCE OF INCOME BEFORE THE ASSESSING OFFICER. BY ISSUING NOTICE U/S 131 THE ASSESSING OFFICER HAS EXAMINED SHRI RAVINDRA JAIN WHO HAD ACCEPTED THE FACT OF ADVANCIN G THE LOAN AND SOURCE OF HIS INCOME AND THE DEPOSIT I N THE BANK ACCOUNT. THUS, NOT ONLY THE IDENTITY OF THE L OAN CREDITOR IS ESTABLISH BUT ALSO CREDIT WORTHINESS AN D GENUINENESS OF THE TRANSACTION HAS ALSO BEEN ESTABLISHED. THUS, THE ASSESSEE HAS DISCHARGED THE PRIMARY ONUS CASTED UPON HIM WITH REGARD TO CASH CR EDIT 16 OF RS. 1 LAC. WE, THEREFORE, DO NOT FIND ANY MERIT IN THE ORDERS OF THE LOWER AUTHORITIES IN MAKING THE ADDIT ION OF RS.1 LAC AND DELETE THE SAME. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED WHEREAS THE CROSS OBJECTION OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 29 TH JUNE, 2011. SD/- SD/- (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29 TH JUNE, 2011 COPY TO:APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD FI LE D/- 17