M/S. VENUS SCAN AND RESEARCH CENTER PRIVATE LIMITED, Bhopal V. THE ACIT3(1), Bhopal

ITA 616/IND/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5745 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 14-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: P K JAIN
• Keywords: Depreciation; Audit objection; Tax effect; Capital expenditure
• Section: 12A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER (SINGLE MEMBER CASE) I.T.A.NO. 617/IND/2015 A.Y. : 2005-06. DY. CIT, 5(1), BHOPAL M/S.VENUS SCAN & RESEARCH CENTRE PRIVATE LIMITED, VS. BHOPAL APPELLANT RESPONDENT I.T.A.NO. 616/IND/2015 A.Y. : 2005-06. M/S.VENUS SCAN & RESEARCH CENTRE PRIVATE LIMITED, DY. CIT, 5(1), BHOPAL BHOPAL VS. APPELLANT RESPONDENT PAN NO. AAACV4896R A PPELLANT S BY : SHRI P.K.JAIN, C. A. RESPONDENT BY : SHRI R.A.VERMA, DR DATE OF HEARING : 23.02.2016 DATE OF PRONOUNCEMENT : 26 . 02.2016 DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 2 2 O R D E R THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER OF CIT(A), BHOPAL, DATED 05.06.2015 FOR THE ASSESSMENT YEAR 2005-06. I.T.A.NO. 616/IND/2015 : ASSESSEES APPEAL: 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - 1. WITHOUT PREJUDICE TO GROUNDS OF APPEAL MENTIONED BELOW, THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AND NOT JUSTIFIED IN SUSTAINING EX-PARTE RECTIFICATION ORDE R U/S 154, WITHOUT APPRECIATING THAT IT IS WELL SETTL ED LAW THAT POWERS OF THE AO U/S 154 ARE LIMITED TO RECTIFY ONLY THE MISTAKES WHICH ARE APPARENT ON THE FACT OF THE RECORD AND THAT AO U/S 154, CERTAINLY HAS NO POWERS TO GO INTO THE DEBATABLE ISSUES WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY, BE TWO OPINIONS. DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 3 3 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AND NOT JUSTIFIED IN SUSTAINING THE UNLAWFUL ADDITION OF RS. 2,00,000/- AS MADE BY THE ASSESSING OFFICER TO THE APPELLANT COMPANYS TOTAL INCOME ALLEGING THAT IT HAS ESCAPED ASSESSMENT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF RUNNING OF DI AGNOSTIC CENTRE WHICH PROVIDES FACILITIES OF C. T. SCANNING, ULTRA SONOGRAPHY, X-RAY AND PATHOLOGICAL INVESTIGATION. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE COMPANY HAS PURCHASED ULTRA SCANNER SYSTEM KNOWN ALSO KNOWN AS COLOR DOPPLER F OR RS. 30,50,000/- FROM WIPRO GE MEDICAL SYSTEMS PVT.LTD. VIDE INVOICE NO. 45510214 DATED 29.12.2004. THE VENDOR R AISED ABOVE INVOICE FOR RS. 32.50 LACS, IN VIEW OF THE NO N-OBSERVANCE OF CERTAIN SPECIFICATIONS, THE ASSESSEE HAS PAID RS . 30.50 LACS INSTEAD OF INVOICE PRICE OF RS. 32.50 LACS. THE LD. AO ADDED THIS DIFFERENCE OF RS. 2,00,000 TO THE ASSESSEES T OTAL INCOME DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 4 4 ALLEGED TO BE UNDISCLOSED INVESTMENT. THE AMOUNT RE PRESENTED DISCOUNT ON PURCHASE OF THE EQUIPMENT AND NOT ANY UNDISCLOSED INVESTMENT BEING SUBJECT TO TAX. 5. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS CONFIRMED THE SAME. 6. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. AUTHORIZED REPRESENTATIVE HAS FILED WRITTEN SUBMISS ION AS WELL AS ORAL ARGUMENTS THAT THE ASSESSEE HAS PRODUCED TH E ORIGINAL INVOICES ON PAGE 1 TO 4 OF THE PAPER BOOK IN WHICH IT IS WRITTEN THAT THE BILL IS SETTLED FOR RS. 30.50 LACS. THE AS SESSEE HAS PAID THIS AMOUNT FOR COLOR DOPPLER. THE ASSESSEE IN HIS BOOKS OF ACCOUNT HAS ALSO DEBITED TO WIPRO GE MEDICAL SYSTEM S PVT.LTD. RS. 30.50 LACS. THEREFORE, WHEN THE ASSESS EE HAS PAID LESS AMOUNT FOR PURCHASE OF ULTRA SCANNER SYSTEM, T HE ASSESSEE HAS SHOWN THE LESS PRICE IN HIS BOOKS OF A CCOUNT. THEREFORE, WHEN THE ASSESSEE HAS PURCHASED THE ULTR A SCANNER SYSTEM ON LESSER PRICE AND THE ASSESSEE HAS SHOWN T HE PRICE IN HIS BOOKS OF ACCOUNT, NO ADDITION IS CALLED FOR. THEREFORE, THE APPEAL MAY BE ALLOWED. HE RELIED ON VARIOUS DEC ISIONS. DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 5 5 7. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDER S OF REVENUE AUTHORITIES. THE LD. DR SUBMITTED THAT B EFORE THE CIT(A), THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS PAID LESSER AMOUNT. NO DOCUME NTARY EVIDENCE REGARDING ALLEGED CLAIM OF DISCOUNT OF RS. 2 LACS HAVE BEEN BROUGHT BY THE ASSESSEE. THEREFORE, THE ADDITI ON WAS CONFIRMED. THE ASSESSEE HAS PRODUCED THESE DOCUMENT ARY EVIDENCE BEFORE THE TRIBUNAL. THEREFORE, THE MATTER MAY BE REMANDED FOR VERIFICATION. 8. HAVING HEARD BOTH THE PARTIES AND LOOKING TO THE FA CTS AND CIRCUMSTANCES OF THE CASE, I FIND FROM THE INVO ICE NO. 45510214 DATED 29.2.2004 AND LEDGER ACCOUNT OF PLAN T AND MACHINERY AND VENDOR, WHEREIN IT IS SHOWN THAT THE ASSESSEE HAD PURCHASED THE SAME FROM WIPRO GE MEDICAL SYSTEM S PVT.LIMITED. THE SYSTEM HAS BEEN MENTIONED AS ULTRA SOUND SCANNER SYSTEM MACHINE WAS NOT AS PER THE ORDER. TH EREAFTER, AFTER NEGOTIATION, BILL WAS SETTLED AT RS. 30.50 LA CS. THE ASSESSEE HAS PRODUCED THE LEDGER ACCOUNT FORM THE A SSESSEE COMPANY AND THE ASSESSEE COMPANY HAS PAID RS. 30.50 LACS TO DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 6 6 WIPRO GE MEDICAL SYSTEMS PVT.LTD. I FIND THAT THE A SSESSEE HAS PAID RS. 30.50 LACS BY CHEQUE. THEREFORE, THE A O IS DIRECTED TO VERIFY THIS PAYMENT AND IF THE ASSESSEE HAS PAID RS. 30.50 LACS TO WIPRO GE MEDICAL SYSTEMS PVT.LTD., BA NGALORE, THEN NO ADDITION IS CALLED FOR. THEREFORE, NO ADDIT ION IS CALLED FOR SUBJECT TO VERIFICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D AS INDICATED ABOVE. I.T.A.NO. 617/IND/2015 DEPARTMENTS APPEAL : 10. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN :- 1. DELETING THE ADDITION MADE ON ACCOUNT OF ACCESS DEPRECATION CLAIMED ON ULTRA SOUND MACHINE AND TREAD MILL SYSTEM. 2. JUSTIFIED IN TREATING THE ULTRASOUND SCANNER SYSTEM AND TREAD MILL SYSTEM AS LIFESAVING MACHINES. 11. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY HAS FURNISHED THE COPY OF REPAIRS AND MAINT ENANCE DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 7 7 ACCOUNT. ON PERUSAL OF THE DOCUMENTS, IT WAS FOUND THAT MANY EXPENSES DEBITED UNDER THE HEAD PROFIT AND LOSS AC COUNT WERE CAPITAL EXPENDITURE. THE AO FOUND THAT THE ASS ESSEE HAS CLAIMED EXCESS DEPRECIATION ON THE ULTRA SOUND MACH INE AND TREAD MILL SYSTEM. THE AO FOUND THAT TREAD MILL SYS TEM IS AN EQUIPMENT, WHICH DOES NOT FALL UNDER THE CATEGORY O F LIFE SAVING EQUIPMENT AND ON WHICH 40% DEPRECIATION IS N OT ALLOWABLE AND ONLY 25 % DEPRECIATION IS ALLOWABLE. THEREFORE, HE HAS DISALLOWED THE DEPRECIATION @ 40%. 12. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) AFTER VERIFICATION HAS ALLOWED THE DEPRECATION @ 40 % BY OBSERVING AS UNDER :- 4.6 AS REGARDS DISALLOWANCE OF EXCESS DEPRECIATION OF RS. 3,91,875/- IT IS SEEN THAT THE AO HAS NOT MA DE ANY ADVERSE REMARKS OR REBUTTED APPELLANTS SUBMISSIONS, AS SENT TO HIM THAT THE SAID ULTRASOUN D MACHINE IS A COLOR DOPPLER, AS CERTIFIED BY WIPRO I.E. THE SELLER. THE SAID MACHINERY IS INCLUDED IN SUB- CLAUSE (E) OF CLAUSE (XIA) OF ITEM III IN PART A OF DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 8 8 APPENDIX I TO I.T. RULES, 1962, IN THE CATEGORY OF LIFE SAVING EQUIPMENT. THUS, THE APPELLANT IS ENTITLED T O CLAIM DEPRECIATION @ 40% THEREON. AFTER PERUSAL, APPELLANTS SUBMISSIONS REGARDING ALLOWANCE OF EXCESS CLAIM OF DEPRECIATION AT RS. 1,66,375/-, AS AGAINST COMPUTED BY THE ASSESSING OFFICER AT RS. 3,95,125/-, ARE FOUND ACCEPTABLE. ACCORDINGLY, ADDITION OF RS. 1,66,375/- IS, HEREBY, CONFIRMED O N ACCOUNT OF EXCESS CLAIM AND ALLOWANCE OF DEPRECIATION. THIS GROUND OF APPEAL IS PARTLY7 ALLOWED. 13. HAVING HEARD BOTH THE PARTIES, I FOUND THAT THE APP EAL UNDER CONSIDERATION IS BELOW TAX LIMIT. THEREFORE, THE APPEAL IS NOT MAINTAINABLE AS PER C.B.D.T. CIRCULAR NO. CIRCULAR NO. 21/2015 . I AM TAKING A CONSISTENT VIEW THAT IF THE TAX EFF ECT IS BELOW RS. 10 LAKHS THEN THE DEPARTMENT SHOULD NOT F ILE THE APPEAL. I HAVE TAKEN A VIEW WHICH IS AS UNDER :- CIRCULAR NO. 21/2015 DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 9 9 F NO 279/MISC. 142/2007-ITJ (PT) CENTRAL BOARD DIRECT TAXES NEW DELHI THE 10 TH DECEMBER, 2015 SUBJECT : REVISION OF MONETARY LIMITS FOR FIL ING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT MEASURES FOR REDUCING LITIGATION REG. REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 5/2014 DATED 10.07.2014 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEPARTMENTAL APPEAL S (IN INCOME-TAX MATTERS) BEFORE APPELLATE TRIBUNAL A ND HIGH COURTS AND SLP BEFORE THE SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HAS BEEN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE APPELLATE TRIBUNAL AN D HIGH COURTS AND SLP BEFORE THE SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 10 10 S.NO. APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETA RY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH C ASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTEN DED TO BE FILED (HEREINAFTER REFERRED TO AS DISPUTED ISSUES). HOWEVER THE TAX WILL NOT INCLUDE ANY INTE REST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITS ELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST I S THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL B E THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS RED UCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 11 11 NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN M ORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH T HE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEED S THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMI T SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPE CT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFEC T IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MONETARY LIMIT DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 12 12 PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A CO URT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEIN G LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY RECOR D THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION. FURTHER, IN SUCH CA SES, THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NO T BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FO R ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OT HER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONETARY LIMIT S. 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIMED RELIEF FROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN T HE DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 13 13 CASE OF THE ASSESSEE FOR ANY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR A NY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON T HE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT TH AT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMIT TED ONLY FOR THE REASON OF THE TAX EFFECT BEING LESS TH AN THE SPECIFIED MONETARY LIMIT AND, THEREFORE, NO INFEREN CE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THE Y SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE ANY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APPEAL DUE TO THIS INSTRUCTI ON MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSIT MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSU ES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY L IMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT : (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, O R (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTIO N OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRE S, OR DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 14 14 (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOR EIGN ASSETS/ BANK ACCOUNTS. 9. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SH ALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OT HER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT PROVISIONS OF STATUTE & RULES. FURTHER, FILING OF A PPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTIO N 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY T HE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO F ILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 15 15 11. THIS ISSUES UNDER SECTION 268A (1) OF THE INCOM E- TAX ACT 1961. 14. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD . AUTHORIZED REPRESENTATIVE SUBMITTED THAT THOUGH TAX EFFECT IS LESS THAN MONETARY LIMIT PRESCRIBED BY C.B.D.T. FOR FILING THE APPEAL. HOWEVER, THE APPEAL IS AUTHORIZED BEING CO VERED UNDER 8-C OF C.B.D.T. INSTRUCTION NO.5/2004 AND ADV ERSE JUDGEMENT RELATING TO REVENUE AUDIT OBJECTION MUST BE TESTED. I FIND THAT THE AO FAILED TO APPLY HIS MIND ON MERIT S ON THIS ISSUE WHETHER THE COLOR DOPPLER IS LIFE SAVING EQUI PMENT OR NOT AND I FIND THAT THE SAID MACHINE IS INCLUDED IN SUB (E) OF CLAUSE (XIA) OF ITEM III IN PART A OF APPENDIX I TO I.T.RULES, 1962 IN THE CATEGORY OF LIFE SAVING EQUIPMENT. THER EFORE, THE DEPARTMENT SHOULD NOT HAVE FILED THE APPEAL. THEREF ORE, THE APPEAL IS NOT MAINTAINABLE ON TAX EFFECT AS WELL AS ON MERIT. IT IS DISMISSED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D AND THE APPEAL OF THE DEPARTMENT IS DISMISSED. DY. CIT, BHOPAL VS. M/S. VENUS SCAN & RESEARCH CENT RE PRIVATE LIMITED, BHOPAL - I.T.A.NO.617/IND/2015 A.Y. 2005-06 16 16 THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 26 TH FEBRUARY, 2016, SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 26 TH FEBRUARY, 2016. CPU* 2324.2