ACIT, Meerut V. M/s. Vats Sports, Meerut

ITA 5755/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91043 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 07-05-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 09-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKER
• Assessee Lawyers: GIRISH KUMAR ARORA
• Keywords: Retrospective amendment; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J .S. REDDY, ACCOUNTANT MEMBER ITA NO . 5 755 / DEL/201 2 ASSESSMENT YEAR: 200 5 - 0 6 ASSISTANT COMMISSIONER VS. M/S VATS SPORTS OF INCOME TAX, CHHIPPI TANK, CIRCLE - 2 , RG COLLEGE ROAD, MEERUT MEERUT (PAN: AABFV6611P) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. J.P. CHANDRAKER, SR. DR RESPONDENT BY : SH. GIRISH KUMAR ARORA, CA DATE OF HEARING : 07 - 0 5 - 2015 DATE OF ORDER : 07 - 0 5 - 2015 ORDER PER H.S. SIDHU, J.M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER DATED 06 / 8 / 201 2 OF L D. CIT(A), MEERUT PERTAINING TO ASSESSMENT YEAR 200 5 - 0 6 . 2. THE GROUNDS RA ISED IN THE APPEAL OF THE DEPARTMENT READ AS UNDER: 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (APPEALS) HAS ERRED IN LAW IN ADMITTING THE ASSESSEE'S APPEAL ON THE AGREED DISALLOWANCE OF RS.2,74,590/ - OUT OF COMMISSION EXPENSES IG NORING THE PRONOUNCEMENTS AND DELETING THE SAID ADDITION WHICH WAS OFFERED BY THE ASSESSEE IN WRITING BEFORE THE A.O. WHEREAS THE APPEAL ON THIS ISSUE OUGHT TO HAVE BEEN DISMISSED IN LIMINE IN VIEW OF THE FOLLOWING JUDICIAL PRONOUNCEMENTS STERLING MACHIN E TOOLS VS. CIT (ALL.) 123 ITR 181 RAMESHCHANDRA & CO. VS. CIT (BORN) 168 ITR 375 ITA NO. 5 755 / D EL /20 1 2 ( ACIT V. M/S VATS SPORTS ) 2 RAMANLAL KAMDAR VS. CIT (MAD) 108 ITR 73 MAHESH B, SHAH VS. CIT (KER) 238 ITR 130 JAYSHREE CHIT FUNDS & SERVICES (P) LTD. VS. CIT (KAR) 127 ITR 740 TURNER MORRISON & CO. LTD. VS. HUNGERFORD INVESTMENT TRUST LTD. (SC) 85 ITR 607. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN DIRECTING THE A.O. TO ALLOW THE DEDUCTION OF COMMISSION OF RS. 7,43,660 / - IN A.Y. 2006 - 07 WHEREAS THE APPEAL WAS FOR A.Y. 2005 - 06 AND THUS THE LD. CIT(A) HAS TRAVELED BEYOND HIS JURISDICTION AS APPELLATE JURISDICTION IS STRICTLY CONFINED TO ASSESSMENT ORDER OF EACH YEAR UNDER APPEAL - NO POWER IS CONFERRED TO MAKE AN ORDER OR ISS UE DIRECTIONS IN RESPECT OF AN ASSESSMENT ORDER WHICH IS NOT SUBJECT MATTER OF APPEAL AS HELD IN FOLLOWING CASES: ITO VS. MURLIDHAR BHAGWAN DAS (SC) 52 ITR 335 CIT VS. MANIK SONS (SC) 74 ITR 1 CIT VS. TPSH SELWA SAROJA (MAD.) 244 ITR 671 RH DAVE VS. C IT(CAL.) 140 ITR 1035 CONSOLIDATED COFFEE LTD. VS, ITO(KAR.) 155 ITR 729 CIT VS. RAFIULLAH TEA INDUSTRIES (P) LTD. (GAU.) 234 ITR 433 MARUBENI INDIA (P) LTD. VS. CIT(DEL.) 328 ITR 306 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMM ISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN DIRECTING THE A.G. TO ALLOW THE DEDUCTION OF RS. 38,641/ - TOWARDS LATE PAYMENT OF PROVIDENT FUND MADE U/S 2(24)(X) READ WITH SECTION 36(1) (VA) OF THE LT. ACT, 1961 IN A.Y. 2006 - 07 WHEREAS THE APPEAL WAS FOR A.Y. 2005 - 06 AND THUS THE LD. CIT(A) HAS TRAVELED BEYOND HIS JURISDICTION AS HELD IN THE JUDGMENTS IN THE CASES AS MENTIONED IN THE GROUND NO. 2 ABOVE. 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN DELETING THE DISALLOWANCES OUT OF VARIOUS EXPENSES IGNORING THE FACT THAT THE ASSESSEE FAILED TO PROVE THE SAME AS ALSO FAILED TO PROVE IF ALL THE EXPENSES WERE INCURRED WHOLLY AND NECESSARILY AND EXCLUSIVELY FOR PURPOSES OF BUSINESS. WHILE DELETING DISALLOWANCE OUT OF CAR, SCOOTER AND OTHER EXPENSES OF PERSONAL NATURE. THE LD. CIT(A) ALSO IGNORED THE FOLLOWING JUDGMENTS IN WHICH IT IS HELD THAT DISALLOWANCES OF EXPENSES FOR PERSONAL USE OF CAR AND TELEPHONE IS JUSTIFIED EVEN IN THE CAS E OF A PUBLIC LIMITED COMPANY ALSO - NEW AMBANI ESTATES PVT. LTD. VS. STATE OF TAMIL NADU 256 ITR 64 MALHOTRA INDUSTRIAL CO. VS DCIT 247 ITR 8 (AT) ITA NO. 5 755 / D EL /20 1 2 ( ACIT V. M/S VATS SPORTS ) 3 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, MODIFY AND/OR DELETE ANY GROUND(S) OF APPEAL. 6. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SET ASIDE AND THAT OF THE A.O. RESTORED. 3. AT THE TIME OF HEARING , SHRI GIRISH KUMAR ARORA, CA/AUTHORISED REPRESENTATIVE OF THE ASSESSEE STATED THAT THE TA X EFFECT IN THIS APPEAL IS LESS THAN RS.4,00,000/ - , THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED THIS APPEAL IN VIEW OF THE CIRCULAR ISSUED BY THE CBDT AND THE PROVISIONS CONTAINED IN THE SECTION 268A OF THE INCOME TAX ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT). 4. ON THE OTHER HAND, L D. DR SUPPORTED THE ORDER OF AO , BUT COULD NOT CONTROVERT THIS FACT THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS. 4,00,000/ - . 5. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT SECTION 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01/04/1999. THE RELEVANT PROVISIONS CONTAINED IN SECTION 268A READ AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, IN STRUCTIONS 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 PROVISIONS OF THIS CHAPTER. (2) WHE RE, 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 SU CH AUTHORITY FROM FILING AN APPEAL OR APPLICATION FOR REFERENCE ON THE SAME ISSUE IN THE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR; OR (B) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR; (3) NOTWITHSTANDING THAT NO APPEA L OR APPLICATION FOR REFERENCE HAS BEEN FILED BY AN INCOME - TAX AUTHORITY PURSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1), IT SHALL NOT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT T HE INCOME - TAX AUTHORITY HAS ACQUIESCED IN THE DECISION ITA NO. 5 755 / D EL /20 1 2 ( ACIT V. M/S VATS SPORTS ) 4 ON THE DISPUTED ISSUE BY NOT FILING AN APPEAL OR APPLICATION FOR REFERENCE IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUCT IONS OR DIRECTIONS 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 APPLICATION 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 ACCORDINGLY. 6 . IT IS NOT IN DISPUTE THAT T HE BOARD S INSTRUCTION OR DIRECTIONS ISSUED TO THE OTHER INCOME - TAX AUTHORITIES ARE BINDING ON THOSE AUTHORITIES, THEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED THE APPEAL IN VIEW OF THE ABOVE MENTIONED SECTION 268A SINCE THE TAX EFFECT IN THE INSTANT CASE IS LESS THAN THE AM OUNT PRESCRIBED FOR NOT FILING THE APPEAL. 7 . IT IS NOTICED THAT THE CBDT HAS ISSUED INSTRUCTION NO. 5/2014 DATED 10 TH JULY, 2014, BY WHICH THE CBDT HAS REVISED THE MONETARY LIMIT TO RS. 4,00,000/ - FOR FILING THE APPEAL BEFORE THE TRIBUNAL. 8 . KEEPING IN VIEW THE CBDT INSTRUCTION NO. 5 OF 2014 DATED 10 TH JULY, 2014 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961 , WE ARE OF THE VIEW THAT THE REVENUE SHOULD NOT HAVE FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL. WHILE TAKING SUCH A VIEW, WE A RE FORTIFIED BY THE FOLLOWING DECISIONS OF THE HON BLE PUNJAB & HARYANA HIGH COURT: 1. CIT VS. OSCAR LABORATORIES P. LTD. (2010) 324 ITR 115 (P&H); 2. CIT VS. ABINASH GUPTA (2010) 327 ITR 619 (P&H); 3. CIT VS. VARINDERA CONSTRUCTION CO. (2011) 331 ITR 449 (P&H) (FB ). 9 . SIMILARLY, THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DELHI RACE CLUB LTD. IN ITA NO. 128/2008, ORDER DATED 03.03.2011 BY FOLLOWING THE EARLIER ORDER DATED 02.08.2010 IN ITA NO. 179/1991 IN THE CASE OF CIT ITA NO. 5 755 / D EL /20 1 2 ( ACIT V. M/S VATS SPORTS ) 5 DELHI - III VS. M/S P.S. JAIN & CO. HELD THAT SUCH CIRCULAR WOULD ALSO BE APPLICABLE TO PENDING CASES. 1 0 . THUS, FROM THE RATIO LAID DOWN BY THE HON BL DELHI HIGH COURT, IT IS CLEAR THAT THE INSTRUCTIONS ISSUED IN THE CIRCULARS BY CBDT ARE APPLICABLE FOR PENDING CASES ALSO. THEREFORE, BY KE EPING IN VIEW THE RATIO LAID DOWN IN THE AFORESAID REFERRED TO CASE, WE ARE OF THE CONSIDERED VIEW THAT INSTRUCTION NO. 5 OF 2014 DATED 10 TH JULY, 2014 ISSUED BY THE CBDT ARE APPLICABLE FOR THE PENDING CASES ALSO AND IN THE SAID INSTRUCTIONS, MONETARY TAX LIMIT FOR NOT FILING THE APPEAL BEFORE THE ITAT IS RS. 4,00,000/ - . 1 1 . IN VIEW OF THE ABOVE, WITHOUT GOING INTO MERIT OF THE CASE, WE DISMISS THE APPEAL FILED BY THE REVENUE. 1 2 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE O PEN COURT ON 07 / 5 /201 5 . SD/ - SD/ - ( J.S. REDDY ) ( H.S. SIDHU ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07 / 5 /201 5 * SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE C OPY BY ORDER, ASSISTANT REGISTRAR ITA NO. 5 755 / D EL /20 1 2 ( ACIT V. M/S VATS SPORTS ) 6