ITO 9(3)(4), MUMBAI V. RAM & COMPANY (INTERORS ) P. LTD, MUMBAI

ITA 6155/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56176 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-12-2011
• Assessment Year: 1995-1996
• Appeal Filed On: 11-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C G K NAIK
• Assessee Lawyers: JAIDEV
• Keywords: Depreciation; Question of law; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER, A ND SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO. 6155/MUM./2010 (ASSESSMENT YEAR : 1995-96 ) INCOME TAX OFFICER WARD-9(3)(4)M AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. APPELLANT V/S M/S. RAM & COMPANY (INTERIOR) P. LTD. RAM HOUSE, 4, GAIWADI INDL. ESTATE S.V. ROAD, GOREGAON (WEST) MUMBAI 400 062 AAACR5089D .... RESPONDENT REVENUE BY : MR. C.G.K. NAIK ASSESSEE BY : MR. JAIDEV DATE OF HEARING 13.12.2011 DATE OF ORDER 23.12.2011 O R D E R PER J. SUDHAKAR REDDY, A.M. APPEAL PREFERRED BY THE ASSESSEE, IS DIRECTED AGAIN ST THE IMPUGNED ORDER DATED 10 TH JUNE 2010, PASSED BY THE COMMISSIONER (APPEALS)-XX , MUMBAI, FOR ASSESSMENT YEAR 1995-96. THE GROUND RAI SED BY THE ASSESSEE, READS AS FOLLOWS:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) ERRED IN CANCELING THE PENALTY OF RS.2,50 ,000/- LEVIED M/S. RAM & COMPANY (INTERIOR) P. LTD. MANAGEMENT LTD. ITA NO. 6269 & 6618/M./2006 2 S.271(1)(C) OF THE L.T. ACT, 1961, IN SPITE OF THE FINDING OF THE FACT MADE IN THE ASSESSMENT ORDER THAT THE TRANSACTION R ESULTING IN CLAIM DEPRECIATION, FROM WHICH THE PENALTY EMANATES WAS N OT GENUINE . 2. BOTH THE PARTIES AGREE BEFORE US THAT THE TAX EFFEC T IN THE REVENUES APPEAL IS LESS THAN ` 3,00,000. AS PER CBDT INSTRUCTION NO.3 OF 2011, DA TED 9 TH FEBRUARY 2011, THE APPEAL BEFORE THE APPELLATE TRI BUNAL CAN BE FILED BY THE REVENUE, WHEN THE TAX EFFECT EXCEEDS THE MONITO RY LIMIT OF ` 3,00,000. 3. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V/ S MADHUKAR K. INAMDAR (HUF), 318 ITR 149 (BOM.) HELD AS FOLLOWS:- THE CIRCULAR DATED MAY 15, 2008 IN GENERAL AND PAR AGRAPH (5) THEREOF IN PARTICULAR LAY DOWN THAT EVEN IF THE SAME ISSUE, IN RESPECT OF THE SAME ASSESSEE, FOR OTHER ASSESSMENT YEARS IS INVOLV ED, THE DEPARTMENT SHOULD NOT FILE APPEAL, IF THE TAX EFFEC T IS LESS THAN ` 4 LAKHS. IN OTHER WORDS, EVEN IF THE QUESTION OF LAW IS OF RECURRING NATURE, THE REVENUE IS NOT EXPECTED TO FILE APPEALS IN SUCH CASES, IF THE TAX IMPACT IS LESS THAN THE MONETARY LIMIT FIXE D BY THE CENTRAL BOARD OF DIRECT TAXES. THE BOARD HAS ALSO ISSUED A CIRCULAR ON JUNE 5, 2007, DIRECTING THE DEPARTMENT TO EXAMINE ALL APPEA LS PENDING BEFORE THE COURT ON A CASE TO CASE BASIS WITH FURTHER DIRE CTION TO WITHDRAW CASES WHEREIN THE CRITERIA OF MONETARY LIMITS AS PE R THE PREVAILING INSTRUCTION ARE NOT SATISFIED, UNLESS THE QUESTION OF LAW INVOLVED OR RAISED IN APPEAL OR REFERRED TO THE HIGH COURT FOR OPINION IS OF A RECURRING NATURE REQUIRED TO BE SETTLED BY THE HIGH ER COURT. THE CIRCULAR MAKES IT CLEAR THAT ON THE DATE OF ISSUANC E OF THE CIRCULAR, PREVAILING INSTRUCTIONS FIXING MONETARY LIMIT WILL HOLD GOOD EVEN FOR PENDING CASES. THE CIRCULAR DATED MAY 15, 2008 WOUL D BE APPLICABLE TO PENDING CASES REQUIRING THE DEPARTMENT TO WITHDRAW CASES WHEREIN THE TAX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS. THE CIRCULAR DATED MAY 15, 2008, WOULD BE APPLICABLE TO CASES PE NDING BEFORE THE COURT EITHER FOR ADMISSION OR FOR FINAL DISPOSAL AN D IT IS BINDING ON THE REVENUE. 4. SIMILAR VIEW WAS TAKEN BY THE HON'BLE JURISDICTIONA L HIGH COURT IN THE JUDGMENT IN CIT V/S PITHWA ENGINEERING WORKS, (2005 ) 276 ITR 519 (BOM.), AND THE HON'BLE DELHI HIGH COURT IN M/S. P.S. JAIN & CO., 335 ITR 591 (DEL.). APPLYING THE PROPOSITIONS LAID DOWN IN THESE CASE L AWS TO THE FACTS OF THE PRESENT CASE, WE DISMISS THE REVENUES APPEAL. M/S. RAM & COMPANY (INTERIOR) P. LTD. MANAGEMENT LTD. ITA NO. 6269 & 6618/M./2006 3 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DECEMBER 2011 SD/- V. DURGA RAO JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 23 RD DECEMBER 2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, D BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI