ITO WD 9(3)(3), MUMBAI V. TWINKLE HOTELS P. LTD, ULHASNAGAR

ITA 5386/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55665 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 19-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOPA B SHAH
• Keywords: Tax effect
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, H BENCH, MUMBAI. BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO,, JUDICIAL MEMBER I.T.A NO.5386/ MUM/2010 ASSESSMENT YEAR: 2006-07 INCOME TAX OFFICER 9(3)(3) .. APPELLANT AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. VS TWINKLE HOTELS P.LTD. .. APPELLANT BLOCK NO.1566, BIJANI BROTHERS BLDG., SECTION 29, OPP; OLD POST OFFICE, ULHASNAGAR PA NO.AABCT 3210 F VS APPEARANCES: V.V.SHASTRI, FOR THE APPELLANT LOPA B SHAH , FOR THE RESPONDENT DATE OF HEARING : 19.10.2011 DATE OF PRONOUNCEMENT : 21-10-2011 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CALLE D INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 22 ND APRIL, 2010, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, F OR THE ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GROUND: I.T.A NO.5386/ MUM/2010 ASSESSMENT YEAR: 2006-07 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN HOLDING THAT INTEREST UNDER SECTION 2 34B AND 234C IS NOT CHARGEABLE WHEN INCOME TAX IS COMPUTED ON THE BA SIS OF BOOK PROFITS DETERMINED U/S.115JB OF THE INCOME TAX ACT, 1 961 DESPITE THE FACT THAT THE CASE OF SNOWCEM INDIA LTD V. DCIT(313 ITR 170) RELIED ON BY THE LD CIT(A) WAS IN THE CONTEXT OF SECTION 115JA WHEREAS THE ASSESSEES CASE IS GOVERNED BY SECTION 115JB AND THE LEVY OF INTEREST U/S.234B AND 234C IS MANDATORY EVEN WHEN INCOME TAX I S COMPUTED ON THE BASIS OF BOOK PROFITS FOLLOWING THE RATIO OF TH E DECISION IN THE CASE OF ACIT V. ASHIMA SYNBTEX LTD (SB) ITAT, AHEMEDA BAD IN ITA NO.2001/AHD/2002 AND 2002/AHD/2001. 2. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE CHARG ABILITY OF INTEREST U/S.234B AND 234C IS IN DISPUTE IN THIS CASE AND THE AMO UNT INVOLVED IS LESS THAN EVEN RS.1,00,000 AS THE AO HAS LEVIED THE INTEREST U/S.2 34B AT RS.81,343 AND U/S.234C AT RS.12,916 TOTALING TO RS.94,259. THEREFOR E, SHE URGES THAT THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE IN VIEW OF THE INSTRUCTIONS ISSUED BY CBDT. 3. LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT CON TROVERT THE AFORESAID SUBMISSION OF LEARNED COUNSEL FOR THE ASSESSEE. 4. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PER USED THE MATERIAL ON RECORD, WE FIND THAT THE TAX EFFECT INVOLVED IN TH IS APPEAL IS LESS THAN RS.3 LAKHS AS PER THE LIMIT PRESCRIBED BY THE CBDT VIDE INSTRUCTION NO.3 OF 2011 FOR FILING OF APPEAL BY THE REVENUE BEFORE THE TRIBUNAL. IN SUCH A SITUATION THE APPEAL FILED IN CONTRAVENTION OF SUCH LIMIT CANNOT BE SUSTAINED. THIS V IEW IS DULY SUPPORTED BY THE DECISION IN THE CASE OF ACIT VS. SATISH CHANDRA, 10 SOT 383. SIMILAR VIEW HAS BEEN TAKEN BY THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CAMCO COLOUR CO. 254 ITR 565, WHEREIN IT HAS BEEN HELD THAT THE TAX EFFECT IN VOLVED IN THE APPEAL FILED BY THE REVENUE BEING LESS THAN THE MONETARY LIMIT AS PRESCRIBE D IN BOARD CIRCULAR, THE SAME IS NOT MAINTAINABLE. 5. ACCORDINGLY, IN VIEW THE CIRCULAR OF 2011 AS APPL ICABLE TO THE APPEALS FILED EARLIER, THE HONBLE JURISDICTIONAL HIGH COURT HAS HE LD IN THE CASE OF CIT VS MADHUKAR K INAMDAR (HUF) REPORTED IN 318 ITR 149 THAT THE AP PEALS FILED BY THE REVENUE I.T.A NO.5386/ MUM/2010 ASSESSMENT YEAR: 2006-07 3 PRIOR TO THE CIRCULAR SHALL ALSO BE GOVERNED THE MO NETARY LIMIT OF THIS CIRCULAR. SIMILAR VIEW HAS BEEN REITERATED BY THE MUMBAI BENCH OF THE TRIBUNAL VIDE ORDER DATED 29.04.2011 IN ITO VS INDIA SAFETY VAULTS LTD., IN ITA NO. 648-651/M/2010. RESPECTFULLY FOLLOWING THE PRECEDENTS, WE HOLD THAT T HE APPEAL FILED BY THE REVENUE CANNOT BE TAKEN UP FOR DECISION ON MERITS AS THE TAX EFFECT IN THIS CASE IS ADMITTEDLY LESS THAN RS. 3.00 LACS. WE, THEREFORE, DISMISS THE APPE AL FILED BY THE REVENUE AS NOT MAINTAINABLE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 21ST OCTOBER, 2011 SD/- (VIJAY PAL RAO) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 21 ST OCTOBER, 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS), 20, MUMBAI 4. COMMISSIONER OF INCOME TAX, 9 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH H MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI