ACIT, New Delhi V. M/s Upkar International Pvt. Ltd., New Delhi

ITA 4797/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4295 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 11-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K RAVI RAM CHANDRAN
• Assessee Lawyers: J S KOCHAR
• Keywords: Question of law; Tax effect
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI DELHI DELHI DELHI, BENCH , BENCH , BENCH , BENCH H HH H , NEW DELHI NEW DELHI NEW DELHI NEW DELHI BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER AND SHRI K. D. RANJAN, ACCOUNTANT MEMBER ITA NO. 4797/DEL/2010 (ASSESSMENT YEAR 2005-06) ACIT, CIRCLE 18(1), VS. M/S. UPKAR INTERNATIONAL PV T. LTD., NEW DELHI. BLDG. NO.10812, 17 PRATAP NAGAR, NEW DELHI (APPELLANT) (RESPONDENT) PAN AAACU5468P APPELLANT BY: SHRI K. RAVI RAMCHANDRAN SR. DR RESPONDENT BY: SHRI J.S. KOCHAR, C.A. ORDER ORDER ORDER ORDER PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: 1. THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YE AR 2005-06 ARISES OUT OF THE ORDER OF LD. CIT(A) XXI, NEW DELH I. THE GROUNDS OF APPEAL RAISED ARE REPRODUCED AS UNDER: THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW DELET ING THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB OF ` 7 ,67,790/- IN RESPECT OF DUTY DRAWBACK IGNORING THAT DUTY DRAWBAC K CANNOT BE REGARDED AS PROFIT DERIVED FROM THE INDUSTRIAL U NDERTAKING SINCE ITS IMMEDIATE AND PROXIMATE SOURCE IS NOT THE INDUSTRIAL UNDERTAKING BUT THE SCHEME OF DUTY DRAWBACK. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE TAX EFFECT IN ASSESSEES APPEAL IS ` 2,80,953.56 WH ICH IS LESS THAN ` 3 LACS. THEREFORE, AS PER THE INSTRUCTION NO.3/201 1 DATED 09.02.2011 THE REVENUE IS NOT PERMITTED TO FILE APP EAL BEFORE THE TRIBUNAL IF THE TAX EFFECT IS LESS THAN ` 3 LACS. HE PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT DATED 25.03.2 011 IN I.T.A. NOS. 3 TO 5/2010. ON THE OTHER HAND, LD. D.R. FOR THE REVENUE I.T.A.NO. 4797/DEL/2010 2 SUBMITTED THAT INSTRUCTION NO.3/2011 IS NOT APPLICA BLE FOR THE APPEALS FILED PRIOR TO ISSUE OF THE SAID INSTRUCTIO NS. 3. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. INSTRUCTION NO.3/201 1 DATED 09.02.2011 HAS REVISED THE MONETARY LIMIT FOR FILI NG THE APPEAL BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL , HON'BLE HIGH COURT AND HON'BLE SUPREME COURT. MONETARY LIMIT FO R FILING THE APPEAL BEFORE THE TRIBUNAL IS ` 3 LACS; BEFORE HON' BLE HIGH COURT ` 10 LACS AND BEFORE HON'BLE SUPREME COURT ` 25 LACS. H ON'BLE HIGH COURT IN THEIR ORDER DATED 25.03.2011 REFERRED TO A BOVE HAS HELD AS UNDER: IT IS STATED THAT THE TAX IMPACT IN THE PRESENT CA SES IS LESS THAN ` 10 LAKHS. THE DEPARTMENT HAS RECENTLY ISSUE D AN INSTRUCTION BEARING NO.3/2011 DATED 09.02.2011, WHI CH IS IDENTICAL TO ITS EARLIER INSTRUCTION BEARING NO.5/2 008 DATED 15.05.2008 EXCEPT THAT IN SO FAR AS THE HIGH COURT IS CONCERNED, THE MONETARY LIMIT IN RESPECT OF APPEALS WHERE THE QUESTIONS OF LAW RAISED NEED NOT TO BE ANSWERED, HA S BEEN RAISED FROM ` 4 LAKHS TO ` 10 LAKHS. THE DIVISION BENCH OF THIS COURT IN I.T.A. NO. 89/1999 DECIDED ON 28.01.2011 H AS ALREADY HELD THAT THE INSTRUCTION BEARING NO.5/2008 DATED 1 5.05.2008 WOULD APPLY EVEN TO THE OLD PENDING REFERENCES AND APPEALS. THIS PRINCIPLE WOULD THUS NATURALLY EQUALLY APPLY T O THE INSTANT INSTRUCTION BEARING NO.3/2011 DATED 09.02.2011, AS WELL. THE TAX EFFECT BEING LESS THAN ` 10 LAKHS, THE QUESTION OF LAW DOES NOT REQUIRE TO BE ANSWERED. THE APPEALS ARE DISPOS ED OF ACCORDINGLY. 4. LD. A.R. FOR THE ASSESSEE HAS ALSO FILED COPY OF THE ORDER OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS DELH I RACE CLUB LTD. IN I.T.A.NO. 4797/DEL/2010 3 I.T.A. NO. 128/2008 DATED 03.03.2011 WHEREIN IT HAS BEEN HELD AS UNDER: THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS ` 4,65,860/-. AS PER THE RECENT GUIDELINES OF THE CB DT, APPEAL IN THOSE CASES WHERE THE TAX EFFECT IS LESS THAN ` 10 LACS, ARE NOT TO BE ENTERTAINED. THIS COURT IN THE CASE OF CIT DELHI III VS M/S. P. S. JAIN AND CO. BEING I.T.A. NO. 179/1991 DECIDED ON 2 ND AUGUST, 2010 HAS TAKEN A VIEW THAT SUCH CIRCULAR WOULD ALSO APPLY TO PENDING CASES. 5. IN VIEW OF THE DECISION OF HON'BLE DELHI HIGH CO URT IT IS CLEAR THAT INSTRUCTION NO.3/2011 DATED 09.02.2011 WILL AP PLY TO ALL PENDING APPEALS. RESPECTFULLY FOLLOWING THE PRECED ENT, IT IS HELD THAT THE APPEAL IS NOT MAINTAINABLE IN THE INSTANT CASE AS THE TAX EFFECT IS ` 2,80,380.56 WHICH IS LESS THAN ` 3 LACS . ACCORDINGLY, IT IS HELD THAT APPEAL FILED BY THE REVENUE IS NOT MAINTA INABLE. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED AS NOT MAINTAINABLE. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH APR., 2011. SD./- SD./- (A. D. JAIN) (K. D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:13 TH APR., 2011 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI