ITO, TONK V. SHRI MOHAN LAL AGARWAL, TONK

ITA 564/JPR/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5409 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 06-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R PAREEK JCIT DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Tax effect

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO.563 & 564/JP/12 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 & 2008-09 INCOME TAX OFFICER, TONK CUKE VS. SHRI MOHANLAL AGARWAL PROP. M/S BALA BUX MOHANLAL & CO. NEWAI( TONK) LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABFPA 0302H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT CO NO.47 & 48/JP/12 (ARISING OUT OF ITA NO. 5 63 & 564/JP/12) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 & 2008-09 SHRI MOHANLAL AGARWAL PROP. M/S BALA BUX MOHANLAL & CO. NEWAI( TONK) CUKE VS. INCOME TAX OFFICER, TONK LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABFPA 0302H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR (ADV.) JKTLO DH VKSJ LS@ REVENUE BY :S HRI G.R. PAREEK (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18.04.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 18/04/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AND THE CROS S OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-II I, JAIPUR DATED 05.03.2012. ITA NO. 563 & CO NO.47 AND ITA NO. 564 & CO. 48/JP/ 12 ITO, TONK VS. SHRI MOHANLAL AGARWAL NEWAI TONK. 2 THE CO-ORDINATE BENCH HAD EARLIER DISPOSED OF THE R EVENUES APPEAL AND CROSS OBJECTION BY THE ASSESSEE BY ITS ORDER DATED 23.01. 2013. SUBSEQUENTLY THE REVENUE HAD MOVED AN M.A. PETITION U/S 254(2) OF IT ACT 1961 (MA NO. 17 & 18/JP/14) WHICH WAS DISPOSED OFF BY THE CO-ORDINATE BENCH BY ITS ORDER DATED 31.10.2014. THE CO-ORDINATE BENCH HAS HELD THAT TH ERE IS A MISTAKE IN DISPOSAL OF GROUND NO. 2 OF THE REVENUES APPEAL AS WELL AS CROSS OBJECTION NO.2 OF THE ASSESSEES CROSS OBJECTION FOR BOTH THE YEARS WHE REBY THE EARLIER ORDER OF THE CO-ORDINATE BENCH DATED 23.01.2013 WAS RECALLED ON THE SPECIFIC GROUND NO.2 OF THE REVENUES APPEAL AS WELL AS CROSS OBJECTION NO.2 FILED BY THE APPELLANT FOR BOTH THE YEARS. IN THE ABOVE BACKGROUND, THE PRESENT APPEAL FILED B Y THE REVENUE AND THE C.O BY THE APPELLANT HAS COME UP FOR HEARING BE FORE THIS BENCH. THE GROUND NO. 2 OF THE REVENUES APPEAL AND CROSS OBJE CTION NO. 2 FILED BY THE APPELLANT IS AS UNDER: ITA NO. 563/JP/12 (1) THE CIT(A) HAS PASSED A PERVERSE ORDER IN DIRECTI NG THE AO TO RECOMPUTED THE DISALLOWANCE OF INTEREST U/S 40A(2 )(B) BY HOLDING THE INTEREST PAYMENT OF 18% IS FAIR, EVEN WHEN THE ASS ESSEE HAD PAID MUCH LESS INTEREST TO UNRELATED PERSONS AND ON THE BANK LOAN. CO NO. 47/JP/12 (BY ASSESSEE) (I) UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO FOR DISALLO WANCE O F INTEREST U/S 40A(2)(B) OF THE IT ACT BEYOND 18% INTEREST RATE WH ICH IS NOT JUSTIFIED. ITA NO. 564/JP/12 (1) THE CIT(A) HAS PASSED A PERVERSE ORDER IN DIRECTIN G THE AO TO RECOMPUTED THE DISALLOWANCE OF INTEREST U/S 40A(2 )(B) BY HOLDING THE INTEREST PAYMENT OF 18% IS FAIR, EVEN WHEN THE ASS ESSEE HAD PAID MUCH LESS INTEREST TO UNRELATED PERSONS AND ON THE BANK LOAN. CO NO. 48/JP/12(BY ASSESSEE) (I) THE CIT(A) HAS PASSED A PERVERSE ORDER IN DIRE CTING THE AO TO RECOMPUTED THE DISALLOWANCE OF INTEREST U/S 40A(2 )(B) BY HOLDING THE INTEREST PAYMENT OF 18% IS FAIR, EVEN WHEN THE ASS ESSEE HAD PAID MUCH LESS INTEREST TO UNRELATED PERSONS AND ON THE BANK LOAN. ITA NO. 563 & CO NO.47 AND ITA NO. 564 & CO. 48/JP/ 12 ITO, TONK VS. SHRI MOHANLAL AGARWAL NEWAI TONK. 3 2. AT THE OUTSET, LD AR SUBMITTED THAT THE TAX EFFECT IN REVENUES APPEAL IS LESS THAN 10 LACS AND THE SAME IS NOT MAINTAINABLE IN LIGHT OF CBDT CIRCULAR CIRCULAR NO.21 OF 2015 DATED 10.12.2015. 3. THE LD. DR AGREE THAT THIS APPEAL OF THE DEPARTM ENT MAY BE TREATED AS NOT PRESSED/WITHDRAWN IN VIEW OF THE CBDT CIRCULAR. 4. WE HAVE HEARD THE LD AR DR AND LD DR. FROM PERU SAL OF THE MATERIAL AVAILABLE ON THE RECORD IN RESPECT OF THE ABOVE APP EAL, IT IS OBSERVED THAT THE DEMAND/ TAX EFFECT IN THIS REVENUE APPEAL IS NOT EXCEEDING RS. 10 LACS. UNDER THE POWERS VESTED BY SEC. 268A(1) OF THE I.T. ACT, CBDT HAS RECENTLY ISSUED CIRCULAR NO.21 OF 2015 DATED 10.12.2015(F.NO.279/MI SC. 142/2007-ITJ(PT) INSTRUCTING THE AUTHORITIES BELOW THAT DEPARTMENTAL APPEAL SHOULD NOT BE FILED BEFORE ITAT WHERE THE DEMAND/TAX EFFECT DOES NOT EX CEED RS.10 LACS. THE CIRCULAR SPECIFICALLY MENTIONS THAT IT WILL BE APPL ICABLE TO ALL PENDING APPEALS ALSO. 4.1. SUBJECT TO SOME EXCEPTIONS, IT IS FURTHER DIR ECTED BY CBDT THAT ALL THE DEPARTMENTAL APPEALS PENDING BEFORE ITAT WHERE THE DEMAND/TAX EFFECT IS NOT EXCEEDING RS. 10 LACS SHOULD BE EITHER WITHDRAWN OR NOT PRESSED BY THE DEPARTMENTAL REPRESENTATIVES AT THE TIME OF HEARING . 4.2 THE REVENUES APPEAL IS NOT COVERED BY ANY EXCE PTIONS MENTIONED IN THE SAID CBDT CIRCULAR. SINCE THE TAX DEMAND IN DISPUTE IN THE REVENUES APPEAL DOES NOT EXCEED THE LIMIT OF RS. 10 LACS AS SET OUT BY CBDT, SUCH APPEAL IS NOT MAINTAINABLE. HENCE, GROUND NO. 2 OF REVENUES APP EAL IS DISMISSED FOR BOTH THE YEARS. 5. REGARDING GROUND NO. 2 TAKEN IN CO NOS. 47& 48/J P/12 WHICH ARE EXACTLY ON THE SAME GROUND AS TAKEN BY THE REVENUE, SINCE T HE GROUND TAKEN BY THE REVENUE IS DISMISSED, THE GROUND NO. 2 IN CROSS OBJ ECTION FOR BOTH YEARS BECOMES ANFRACTUOUS AND HENCE THE SAME IS DISMISSED . ITA NO. 563 & CO NO.47 AND ITA NO. 564 & CO. 48/JP/ 12 ITO, TONK VS. SHRI MOHANLAL AGARWAL NEWAI TONK. 4 IN THE RESULT, THE APPEALS FILED BY THE REVENUE AND CROSS OBJECTIONS BY THE ASSESSEE FOR BOTH YEARS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/04 /2016. SD/- SD/- ( R.P. TOLANI ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 18/ 04 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE INCOME TAX OFFICER, TONK 2. THE RESPONDENT- SHRI MOHANLAL AGARWAL, NEWAI, T ONK 3. THE CIT(A) III, JAIPUR 4. THE CIT-III, JAIPUR 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 654 & CO N. 47 AND 564 & CO NO. 48 /JP/12) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR