ITO, New Delhi V. M/s Escorts Farms Ltd., New Delhi

ITA 5550/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53335 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 30-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 08-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGADR
• Assessee Lawyers: JIGYASHA CHOPRAAR
• Keywords: Audit objection; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI I BENC H BEFORE SHRI RAJPAL YADAV, JM & SHRI A.N. PAHUJA, A M ITA NO.5 550 /DEL/201 0 ASSESSMENT YEAR:2007-08 ITO,WARD-11(2), ROOM NO. 321, CR BUILDING, NEW DELHI-110002 V/S . M/S ESCORTS FARMS LTD., B-1/E-3,MOHAN CO- OPERATIVE INDUSTRIAL ESTATE,NEW DELHI- 110044 (PAN:AA AC E 0075A ) (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- MISS JIGYASHA CHOPRA,AR REVENUE BY:- SHRI A.K.MONGA,DR DATE OF HEARING:- 30-11-2011 DATE OF PRONOUNCEMENT:- 30-11-2011 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 8.12.2010 BY THE REVENUE AGAIN ST AN ORDER DATED 25.10.2010 OF THE LD. CIT (APPEALS)-XIII, NEW DELHI, RAISES TWO GROUNDS RELATING TO DISALLOWANCE OF I) EXPENSES OF ` 2,53,564/- ON ACCOUNT OF SALARY, AUDIT FEE, FILING FEE, LEGAL CHARGES ETC.;& ,II) ` 4,66,607/- ON ACCOUNT OF AMOUNT EMBEZZLED BY ANY EMPLOYEE IN THE EARLIER YEARS . 2. AT THE OUTSET, THE LD. AR ON BEHALF OF THE ASS ESSEE POINTED OUT THAT THE TAX EFFECT IN THIS APPEAL FILED BY THE RE VENUE IS ABOUT RS. 2.60 LACS I.E BELOW THE LIMIT OF RS.3 LAKHS STIPUL ATED BY THE CBDT IN THEIR INSTRUCTION NO.3/2011 DATED 9 TH FEBRUARY, 2011.THE LD. DR APPEARING BEFORE US COULD NOT POINT OUT THAT THE CA SE FALLS WITHIN ANY OF THE FOLLOWING EXCEPTIONS IN THE AFORESAID CBDT I NSTRUCTION : A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR ITA NO.5550/DEL/2010 2 (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT. 3. WE FIND THAT A CO-ORDINATE BENCH VIDE THEIR D ECISION DATED 4.3.2011 IN THE CASE OF ITO VS. BHAVYA SOFTECH (P) LTD. IN ITA NO. 4514/DEL./2010 ,FOLLOWING THE DECISION DATED 18.2.2011 OF HONBLE DELHI HIGH COUR T IN CIT VS. RAJAN RAMANEE IN ITA NO. 230/D/2011, CONCLUDED AS UNDER; 2. AT THE VERY OUTSET, IT WAS SUBMITTED BY THE L D.AR OF THE ASSESSEE THAT IN THE PRESENT CASE THE TAX EFFECT OF THE DISPUTE IS BELOW RS.3 LAKHS AND HENCE THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE IN VIEW O F THE BOARDS NEW INSTRUCTIONS NO.3 DATED 9.2.2011. 3. LD. AR OF THE ASSESSEE HAS SUBMITTED A COPY OF R ECENT JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT V. RAJ AN RAMANEE IN I.T.A. NO.230/DEL/2011DATED 18.2.2011 IN WHICH HON'BLE DEL HI HIGH COURT HAS APPLIED THE BOARD INSTRUCTION NO.3 OF DATED 9TH FEBRUARY,2011, ALTHOUGH THE APPEAL WAS FILED BY THE REVENUE BEFORE THIS DATE. IT IS A SUBM ISSION OF THE LD. AR OF THE ASSESSEE THAT SINCE IT IS ACCEPTED BY HON'BLE DELHI HIGH COURT THAT THIS BOARD INSTRUCTION DATED 9.2.2011 IS APPLICABLE FOR ALL PE NDING APPEALS ALSO, THE PRESENT APPEAL OF THE REVENUE IS ALSO TO BE DISMISSED. 4. LD. DR OF THE REVENUE SUBMITTED THAT THIS BOARD INSTRUCTION IS APPLICABLE FOR ALL APPEALS OF THE REVENUE WHICH ARE FILED AFTER THE DA TE OF THIS BOARD INSTRUCTION AND THEREFORE, THIS BOARD INSTRUCTION IS NOT APPLICABLE TO THE PRESENT APPEAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE TAX EFFECT IN THE PRESENT CASE IS BELOW RS.3 LAKH AND WE FIND THAT AS PER THIS BOARD INSTRUCTION NO.3 DATED 9.2.2011, THE LIMIT OF TAX EFFECT FOR FILING THE APPEAL BEFORE THE TRIBUNAL HAS BEEN INCREASED TO RS.3 LAKHS AND THE SAME FOR FILING APPEAL BEFORE HONBLE HIGH COURT HA S BEEN INCREASED TO RS.10 LAKHS. IN THE CASE OF CIT V. RAJAN RAMANEE (SUPRA), THE HON'BLE DELHI HIGH COURT HAS APPLIED THIS BOARD INSTRUCTION DATED 9.2.2011 A ND DISMISSED THE APPEAL OF THE REVENUE BECAUSE OF LOW TAX EFFECT. IN THAT CASE ALSO, THE APPEAL WAS FILED BY THE REVENUE BEFORE THE HON'BLE DELHI HIGH COURT PRI OR TO THE DATE OF THIS BOARD INSTRUCTION AS SUBMITTED BY LD.AR OF THE ASSESSEE A ND HENCE, WE DO NOT FIND ANY MERIT IN THE SUBMISSION OF THE LD. DR OF THE REVENU E THAT THIS BOARD INSTRUCTION IS APPLICABLE ONLY TO THOSE APPEALS WHICH ARE FILED BY THE REVENUE AFTER THE DATE OF THIS BOARD INSTRUCTION. SINCE THIS BOARD INSTRUCTIO N WAS APPLIED BY HON'BLE DELHI HIGH COURT TO PENDING APPEALS ALSO, THE SAME IS APP LICABLE IN THE PRESENT CASE ALSO. LD. DR OF THE REVENUE COULD NOT SHOW THAT THE TAX EFFECT IN THE PRESENT CASE ITA NO.5550/DEL/2010 3 IS ABOVE RS.3 LAKHS AND HENCE, THIS APPEAL OF THE R EVENUE IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT AS PER BOARD INSTRUCTION NO.3 OF 9.2.2011. 4. FOLLOWING THE VIEW TAKEN BY THE CO-ORDINATE BENCH IN THEIR AFORESAID DECISION, WE HAVE NO ALTERNATIVE BUT TO DISMISS THIS APPEAL OF THE REVENUE IN LIMINE. ORDER PRONOUNCED IN THE COURT TODAY SD/- SD/- (RAJPAL YADAV) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) COPY OF THE ORDER FORWARDED TO :- 1. ACIT, CENTRAL CIRCLE-10, NEW DELHI. 2. SHRI SALEK CHAND JAIN, 685, CHITLA GATE, DELHI- 06 3. CIT (APPEALS)-II, DELHI 4. THE CIT CONCERNED. 5. THE DR, ITAT,I BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI