ITO, New Delhi V. M/s R.S. Traders, New Delhi

ITA 513/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9992 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 31-03-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 31-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRENDRA KUMAR
• Keywords: Gift; Additional evidence; Question of law; Block assessment; Tax effect
• Section: 260A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO. 513/DEL/2011 ASSESSMENT YEAR: 20 03-04 THE INCOME TAX OFFICER, VS. R.S. TRADERS, WARD-29(2), ROOM NO.112, C/O M.M. BHALLA, DRUM SHAPED BLDG., IP ESTATE, C-347, VIKAS PURI, NEW DELHI. NEW DELHI. PAN NO. ABLPK0524F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMRENDRA KUMAR, SR. DR RESPONDENT BY : NONE. ORDER PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRE CTED AGAINST THE ORDER OF THE CIT (A) DATED 22 ND NOVEMBER, 2010 FOR ASSESSMENT YEAR 2003-04. GROUNDS OF APPEAL READ AS UNDER:- 01. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT (A) HAS ERRED IN RELYING UPON THE DOCUM ENTS FILED BY THE ASSESSEE U/R 46A(4) AND REDUCING THE A DDITION TO RS.25000/- FROM RS.6,00,000/-. 02. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A) IS NOT JUSTIFIED IN LAW IN ENTERTAINING THE ADDITIONAL EVIDENCES AND AUDIT REPORT WHICH HAS BEE N DONE AFTER A LAPSE OF 4 YEARS AND ALSO ADMITTING TH E EVIDENCES SO FILED AS TRUE WITHOUT EXAMINING THE SA ME. 03. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND (S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. ITA NO. 513/D/11 2 2. THE ASSESSEE IS A FIRM. IT HAS BEEN ASSESSED BY THE ASSESSING OFFICER U/S 144 OF THE INCOME-TAX ACT, 19 61 VIDE ORDER DATED 27 TH MARCH, 2006 FOR ASSESSMENT YEAR 2003-04 AT AN INCOME OF ` 6 LAC. THE SAID ASSESSED INCOME HAS BEEN REDUCED BY THE CIT (A) TO A SUM OF ` 25,000/- AND T HE BALANCE ADDITION OF ` 5,75,000/- HAS BEEN DELETED. IT IS A GAINST THE SAID ORDER OF THE CIT (A) THE DEPARTMENT HAS FILED THE A PPEAL. 3. THE TAX CALCULATION (EXCLUDING INTEREST) SHOWS T HAT ON THE TOTAL INCOME ASSESSED BY THE ASSESSING OFFICER AT ` 6 LAC, THE TAX INCLUDING SURCHARGE WILL BE ` 1,61,700/-. THE AMOUNT DELETION OF WHICH IS CONTESTED BY THE REVENUE IS ` 5,75,000/- ON WHICH THE TAX EXCLUDING INTEREST INCLUDING SURCHARG E WILL BE A SUM OF ` 1,53,825/-. IN BOTH THE CIRCUMSTANCES, TH E TAX EFFECT WOULD BE MUCH LESS THAN ` 2 LAC. 4. ACCORDING TO THE C.B.D.T. INSTRUCTIONS NO. 2 DAT ED 24.10.2005, THE DEPARTMENT SHOULD NOT HAVE FILED TH E APPEAL BEFORE THE TRIBUNAL. FOR THIS PURPOSE RELIANCE MAY BE PLACED ON THE DECISION OF ITAT DELHI BENCH IN CASE OF SHRI VIKRAM BHATNAGAR ITA NO. 60/D/2002, ORDER DATED 10-3-2006. 5. IT IS ALSO SEEN THAT RECENTLY THE HONBLE JURI SDICTIONAL HIGH COURT VIDE THEIR ORDER DATED 1.8.2007 IN ITA N O. 683/2007 IN THE CASE OF CIT V. MANISH BHAMBRI HAVE UPHELD TH E ORDER OF TRIBUNAL VIDE WHICH THE APPEAL FILED BY THE REVENUE WAS REFUSED TO BE ENTERTAINED BECAUSE OF LOW TAX EFFECT. THE SAID ORDER OF HONBLE JURISDICTIONAL HIGH COURT IS REPRODUCED BEL OW FOR THE SAKE OF CONVENIENCE:- THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8TH AUGUST, 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH 'D' IN IT(SS) NO. 513/DEL/200 3 RELEVANT FOR THE BLOCK PERIOD 1ST APRIL, 1990 TO 14 TH FEBRUARY, 2001. ITA NO. 513/D/11 3 THE QUESTION THAT AROSE BEFORE THE ASSESSING OFFICE R WAS WITH REGARD TO CERTAIN DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE AND SINCE THE AMOUNTS WERE NOT EXPLAINED, TAX WAS LEVIED. IN APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE AND HELD THAT THE EXPLANATION GIVEN BY HIM WAS ACCEPTABLE AND, IN ANY CASE, THE ASSESSEE CANNOT BE EXPECTED TO RECOLLECT EACH AND EVERY ENTRY MADE IN THE BANK. IT MAY BE MENTIONED THAT THE AMOUNT IN DISPUTE IS RS.30,000/- FOR THE ASSESSMENT YEAR 1999-2000 AND RS.83,000/- FOR THE ASSESSMENT YEAR 2001-2002. IT MAY ALSO BE MENTIONED THAT FOR THE ASSESSMENT YEAR 1999-2000, THE ASSESSING OFFICER HAS ALREADY ACCEPTED THE EXPLANATION WITH REGARD TO A GIFTOFRS.60,000/-. AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS),-AN APPEAL WAS FILED BEFORE THE INCOME TA X APPELLATE TRIBUNAL. THE TRIBUNAL FOUND THAT IN VIEW OF INSTRUCTIONS ISSUED BY THE CBDT WHERE THE TAX EFFEC T IS LESS THAN RS.L LAC, THE DEPARTMENT SHOULD NOT FI LE AN APPEAL BEFORE THE TRIBUNAL. IN THE PRESENT CASE, TH E TAX EFFECT IS LESS THAN RS.L LAC. UNDER THE CIRCUMSTANCES, THE TRIBUNAL DID NOT ENTERTAIN THE APPEAL. THE REVENUE, FEELING AGGRIEVED BY THE DECISION OF T HE TRIBUNAL, HAS COME UP BEFORE US UNDER SECTION 260A OF THE INCOME TAX ACT, 1961. IT IS CONTENDED BY LEARNED COUNSEL FOR THE REVENUE THAT THE TRIBUNAL I S A FACT FINDING AUTHORITY AND SHOULD HAVE ADJUDICATED THE MATTER ON MERITS. WE ARE OF THE VIEW THAT THE ISSUE RAISED BY THE REVENUE IS NOT AT ALL SUBSTANTI AL AND THE AMOUNT IN DISPUTE IS QUITE INSIGNIFICANT, CONSIDERING THAT THE CASE IS ONE OF A BLOCK ASSESSMENT. THERE IS NO JUSTIFICATION FOR THE INCOM E TAX DEPARTMENT TO GO ON BURDENING THE TRIBUNAL, THE COURT WITH EVERY CASE RIGHT UP TO THE END. APART FR OM BURDENING THE TRIBUNAL AND COURTS, IT ALSO CAUSES AVOIDABLE EXPENSES TO THE ASSESSEE. IT IS COMMON KNOWLEDGE THAT THE ASSESSEE HAS TO PAY FOR LEGAL FE ES AND MERELY BECAUSE THE INCOME TAX DEPARTMENT HAS GOT UNLIMITED RESOURCES, THERE IS NO JUSTIFICATION THAT EVERY CASE SHOULD BE DRAGGED ON. ITA NO. 513/D/11 4 UNDER THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT TH E TRIBUNAL WAS JUSTIFIED IN REFUSING TO ENTERTAIN THE APPEAL BECAUSE OF THE INSIGNIFICANT AMOUNT INVOLVED IN THE MATTER. NO SUBSTANTIAL QUESTION OF LAW ARISE S. WE, THEREFORE, DISMISS THIS APPEAL. 6. IN VIEW OF ABOVE DISCUSSION THE APPEAL FILED BY THE REVENUE IS DISMISSED BEING UN-ADMITTED ON ACCOUNT O F LOW TAX EFFECT. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31.03.2 011 SD/- SD/- (K.G. BANSAL) (I.P. BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31.03.2011 DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR