ITO, New Delhi V. M/s. Jai Baba Traders Pvt. Ltd., New Delhi

ITA 5128/DEL/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6839 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 03-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 19-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV DUDEJA
• Keywords: Retrospective amendment; Accommodation entries; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.L.P.SAHU, ACCOUNTANT MEMBER I.T.A .NO.-5128/DE L/2010 (ASSESSMENT YEAR-2007- 08) ITO, WARD-4(1), NEW DELHI (APPELLANT) VS M/S JAI BABA TRADERS PVT.LTD., D-115, GALI NO.4, GANGA VIHAR, DELHI-110094. PAN-AAACJ7442E (RESPONDENT) APPELLANT BY MR. GAURAV DUDEJA, SR.DR RESPONDENT BY NONE ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AS SAILING THE CORRECTNESS OF THE ORDER DATED 16.09.2010 OF CIT(A)-VII, NEW DE LHI PERTAINING TO 2007-08 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE LD. CIT(APPEALS) IS ERRONEOUS & C ONTRARY TO FACTS & LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.10,50,266/- MADE U/S 68 OF THE I.T.ACT BEING THE CASH PAID FOR OBTAINING THE ACCOMMODATION ENTRIES. 2.1. THE LD. CIT(A) IGNORED THE FINDING RECORDED BY THE A.O AND THE FACT THAT THE ACCOMMODATION ENTRIES ARE PROVIDED BY THE ENTRY PROVIDERS ON RECEIVING CASH AS COMMISSION. 3. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR DEMA ND ANY GROUND OF THE APPEAL RAISED ABOVE AT THE TIME OF H EARING. 2. AT THE TIME OF HEARING, NO ONE WAS PRESENT ON BE HALF OF THE ASSESSEE. HOWEVER, CONSIDERING THE AMOUNT AT STAKE FOR THE RE VENUE THE LD. SR. DR, MR. G.DUDEJA WAS REQUIRED TO RESPOND WHY CONSIDERING TH E LATEST CIRCULAR NO.21/2015 DATED 10 TH DECEMBER, 2015 OF CBDT THE APPEAL OF THE REVENUE SHOULD NOT BE DISMISSED AS ADMITTEDLY THE T AX EFFECT IS LESS THAN RS.10 LACS. DATE OF HEARING 28.01.2016 DATE OF PRONOUNCEMENT 10.02.2016 I.T.A .NO.-5128/DEL/2010 PAGE 2 OF 4 3. MR. G.DUDEJA, LD. SR. DR CONSIDERING THE GROUNDS AND THE ADDITIONS AT STAKE FOR THE REVENUE SUBMITTED THAT THE TAX EFFECT IS MUCH BELOW THE LIMIT OF RS.10 LACS ACCORDINGLY THE DEPARTMENTAL APPEAL MAY BE TREATED AS NOT PRESSED. 4. IT MAY NOT BE OUT OF PLACE TO REFER TO SECTION 2 68A OF THE INCOME-TAX ACT, 1961 WHICH HAS BEEN INSERTED BY THE FINANCE ACT, 20 08 WITH RETROSPECTIVE EFFECT FROM 01.04.1999 WHICH MANDATES THE CBDT TO ISSUE NO TIFICATIONS AND CIRCULARS AS CIRCULAR NO.21/2015 DATED 10TH DECEMBER, 2015 OF CB DT, WHICH HAS REVISED THE MONETARY LIMIT FOR FILING OF THE DEPARTMENTAL APPEA L TO THE ITAT AT RS.10 LACS HAS BEEN ISSUED UNDER THE SAID PROVISIONS BY THE CBDT. THE RELEVANT PROVISION READS AS UNDER:- 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME-TAX AUTHORITIES, FIXING SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PURPOSE OF REGULATING FILING OF APPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME-TAX AUTHORITY UNDER THE PRO VISIONS OF THIS CHAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), AN INCOME-TAX AUTHORITY HAS NOT FILED ANY APPEAL OR APPLICATION FOR REFERENCE ON ANY ISSUE IN THE CASE OF AN ASSESSEE FOR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORI TY FROM FILING AN APPEAL OR APPLICATION FOR REFERENCE ON THE SAME ISSUE IN T HE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEA R; OR (B) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER A SSESSMENT YEAR. (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION F OR REFERENCE HAS BEEN FILED BY AN INCOME-TAX AUTHORITY PURSUANT TO THE OR DERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB-SECTION (1), IT SHALL N OT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME-TAX AUTHORITY HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUE BY NOT FILING AN APPEAL OR APPLICATION FOR REFERENC E IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH A PPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUCTIONS OR DIRECTIO NS ISSUED UNDER SUB- SECTION (1) AND THE CIRCUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NOT FILED IN RESPECT OF ANY CASE. (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH HAS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR FILING AN APPEAL OR APPL ICATION FOR REFERENCE SHALL BE DEEMED TO HAVE BEEN ISSUED UNDER SUB-SECTION (1) AND THE PROVISIONS OF SUB-SECTIONS (2), (3) AND (4) SHALL APPLY ACCORDING LY.] 5. RELEVANT EXTRACTS (PARAS 1 TO 4) FROM THE AFORES AID CBDT CIRCULAR NO. 21 OF 2015 DATED 10.12.2015 IS ALSO REPRODUCED HEREUNDER FOR READY REFERENCE: SUBJECT : REVISION OF MONETARY LIMITS FOR FI LING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL A ND HIGH COURTS AND SLP BEFORE SUPREME COURT MEASURES FOR REDUCING L ITIGATION REG. REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 5/2014 DATED 10.07.2014 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEPARTMENTAL I.T.A .NO.-5128/DEL/2010 PAGE 3 OF 4 APPEALS (IN INCOME-TAX MATTERS) BEFORE APPELLATE TR IBUNAL AND HIGH COURTS AND SLP BEFORE THE SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HAS BEEN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MER ITS BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE THE SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIED B ELOW. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HE REUNDER: S. NO APPEALS IN INCOME-TAX MATTER MONETARY LIMIT ( IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCR IBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE F ILED (HEREINAFTER REFERRED TO AS DISPUTED ISSUES). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITS ELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DI SPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RE TURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NO TIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFEC T WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEA LED AGAINST. 6. WE HAVE SEEN THAT THE MONETARY LIMITS HAVE BEEN MADE APPLICABLE RETROSPECTIVELY BY THE CBDT IN THE SAID CIRCULAR AS WOULD BE EVIDENT FROM THE FOLLOWING EXTRACT:- 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIB UNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE G OVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 7. IN VIEW OF THE ABOVE WHERE THE TAX EFFECT IS ADM ITTEDLY BELOW RS.10 LAC THE APPEAL FILED IS DISMISSED AS THE SAID CIRCULAR IS B INDING ON THE REVENUE. RELYING ON THE AFORESAID CIRCULAR THE DEPARTMENTAL APPEAL I N THE LIGHT OF THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 10 FEBRUARY, 2016. SD/- SD/- (L.P.SAHU) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10/02/2016 *AMIT KUMAR* I.T.A .NO.-5128/DEL/2010 PAGE 4 OF 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSI STANT REGISTRAR ITAT NEW DELHI