Income Tax Officer, Meerut V. M/s Mukesh Kumar Chawla & Sons, Meerut

ITA 5972/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0132 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 16-03-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 29-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PIYUSH SONKAR
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI B.C. MEENA. ACCOUNTANT MEMBER ITA NOS.5972 & 5973/DEL./2010 (ASSESSMENT YEAR : 1998-99) ITO, WARD 1(4), VS. MUKESH KUMAR CHAWLA & SONS, MEERUT. 15-B, SHAMBHOO NAGAR, MEERUT. (PAN/GIR NO.AABHM0615C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH, ADV. REVENUE BY : SHRI PIYUSH SONKAR, SR.DR ORDER PER RAJPAL YADAV: JM THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), GHAZIABA D, DATED 06.10.2010 PERTAINING TO ASSESSMENT YEAR 1998-99. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TA X (APPEALS) HAS ERRED BY DELETING DISALLOWANCE OF ` 8,0 5,977/- MADE BY THE AO ON ACCOUNT OF SALE OF ASSETS DESPITE THE AO HOLDI NG THE SALE BILLS ISSUED BY M/S BISHAN CHAND MUKESH KUMAR SARRAF, DEL HI AS BOGUS. 3. AT THE THRESHOLD, WE NOTE THAT THE TAX EFFECT IN THESE APPEAL IS LESS THAN ` 3 LAKHS. AS PER INSTRUCTION NO. 3/2011 (F.NO . 279/MISC./142/2007-ITJ) DATED 09.02.2011 ISSUED BY THE CBDT, THE TAX EFFECT FOR FILING APPEAL BEFORE THE APPELLATE TRIBU NAL SHOULD BE MORE THAN ` 3 LAKHS. IN THE PRESENT CASE, ADMITTEDLY THE T AX IS BELOW ` 3 LAKHS. HENCE, THE APPEALS ARE IN CONTRAVENTION OF THE AFORESAID CBDT CIRCULAR/INSTRUCTION. HENCE, THE SAME IS LIABLE TO BE DISMISSED. ACCORDINGLY, THESE APPEALS BY THE REVENUE STAND DISMISSED FOR TAX EFFECT. I.T.A. NOS.5972 & 5973/DEL./10 (A.Y. 1998-99) 2 4. THE LD.COUNSEL FOR THE ASSESSEE HAS ALSO SUBMITTED THAT THE CASE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE D ELHI HIGH COURT IN THE CASE OF CIT, DELHI-III VS. M/S P.S. JAIN AND CO., BEING I.T.A. NO.179/1991 DATED 2.8.2010, IN WHICH THE HONBLE HI GH COURT HAS OBSERVED THAT: IN CIT VS. ASHOK UMAR MANIBHA PATEL AND CO.(2009) 317 ITR 386 (MP), A DIVISION BENCH OF MADHYA PRADESH HAS HELD AS TH US: 13. QUITE APART FORM THE ABOVE, WE MAY ALSO NOTE THA T THIS COURT IN THE CASE OF CWT VS. DR. AJAD KUMAR JAIN( HUF), SAGAR (W.P. NO.162/98), WHILE TAKING NOTE OF THE TA X IMPACT AND PLACING RELIANCE ON THE DECISION RENDERED IN CIT V. PITHWA ENGINEERING WORKS (2005) 276 ITR 519 (BOM.), HAS OPINED THUS: 11. THE FACTUAL SCENARIO CAN BE PERCEIVED FROM ANOTHER ASPECT. SUBMISSION OF MR. A.K. SHRIVASTAVA, LEARNED COUNSEL FOR THE RESPONDENT IS THAT THE TAX IMPACT IS `52,565/- AND, THEREFORE, AS PER THE CIRCUL AR OF THE CENTRAL BOARD OF DIRECT TAXES THE REFERENCE NEED NOT BE ADVERTED TO. A DIVISION BENCH OF THE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. PITHWA ENGG. WORKS (2005) 276 ITR 519 (BOM.), IN PARAGRAPH 6 EXPRESSED THE VIEW AS UNDER (PAGE 520): THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF TH E FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, THE ASSESSEES ON THE FILE OF THE DEPARTMENTS HAVE BEEN INCREASED CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOCKED WITH HUGE TENDENCY OF CASES. IN THIS VIEW OF THE MATTER, THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT LESS THAN RS.2 LAKHS. THE SAME POLICY FOR OLD MATTERS NEED TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOARD S CIRCULAR DATED MARCH 27,2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. I.T.A. NOS.5972 & 5973/DEL./10 (A.Y. 1998-99) 3 THUS, THERE IS NO JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX EFFECT. 3. JUDGED FROM BOTH ANGLES WOULD ANSWER THE REFERENCE IN THE NEGATIVE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 4. IN THE RESULT, THE APPEALS FILED BY THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/03/2011 UP ON CONCLUSION OF HEARING. SD/- SD/- [B.C. MEENA] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 16/03/2011 SKB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A), GHAZIABAD. 5. CIT( ITAT) BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES