ITO 10(2)(3), MUMBAI V. J J POLYPLAST LTD, MUMBAI

ITA 6522/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8673 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 10-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 03-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Earning of tax free income; Question of law; Tax effect
• Section: 14A; 2

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI . .. . . .. . , ,, , ! ! ! ! , ' ' ' ' # $% # $% # $% # $% , ,, , & ! & ! & ! & ! ' ' ' ' BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER . / ITA NO. 6522/MUM./2010 ( &( ) '*) / ASSESSMENT YEAR : 200708 ) INCOME TAX OFFICER WARD10(2)(3), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. +, / APPELLANT ( V/S M/S. J.J. POLYPLAST LTD. C206, GHATKOPAR INDL. ESTATE LBS MARG, GHATKOPAR (W) MUMBAI 400 088 .... -.+, / RESPONDENT !+ . / PERMANENT ACCOUNT NUMBER AAACJ4050C !' 0 1 / REVENUE BY : MR. RAKESH RANJAN &( )2 0 1 / ASSESSEE BY : MR. HIRO RAI (' 0 / DATE OF HEARING 10.10.2012 $ 34* 0 / DATE OF ORDER 12.10.2012 $ $ $ $ / ORDER # $% # $% # $% # $% , ,, , & ! & ! & ! & ! 5 5 5 5 / PER AMIT SHUKLA, J.M. THE PRESENT APPEAL PREFERRED BY THE REVENUE, IS DIR ECTED AGAINST THE IMPUGNED ORDER DATED 16 TH JUNE 2010, PASSED BY THE LEARNED COMMISSIONER (APPEALS)XXI, FOR THE QUANTUM OF ASSE SSMENT PASSED M/S. J.J. POLYPLAST LTD. 2 UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (F OR SHORT THE ACT ) MUMBAI, ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE DISALLOWAN CE OF ` 8,03,682 MADE UNDER SECTION 14A R/W RULE8D IN RESPECT OF EX PENDITURE BY WAY OF INTEREST WHICH IS NOT DIRECTLY ATTRIBUTABLE TO SUCH EXEMPT INCOME UNDER RULE8D(2) OF THE I.T. ACT . 2. BOTH THE LEARNED DEPARTMENTAL REPRESENTATIVES AGREE BEFORE US THAT THE TAX EFFECT IN THE REVENUES APPEAL IS LESS THAN ` 3,00,000. AS PER CBDT INSTRUCTION NO.3 OF 2011, DATED 9 TH FEBRUARY 2011, THE APPEAL BEFORE THE APPELLATE TRIBUNAL CAN BE FILED BY THE REVENUE, WHE N THE TAX EFFECT EXCEEDS THE MONITORY 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 SAM E ISSUE, IN RESPECT OF THE SAME ASSESSEE, FOR OTHER ASSESSMENT YEARS IS INVOLVED, 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 AP PEALS PENDING BEFORE THE COURT ON A CASE TO CASE BASIS WITH FURTH ER DIRECTION TO WITHDRAW CASES WHEREIN THE CRITERIA OF MONETARY LIM ITS AS PER THE PREVAILING INSTRUCTION ARE NOT SATISFIED, UNLESS TH E QUESTION OF LAW INVOLVED OR RAISED IN APPEAL OR REFERRED TO THE HIG H COURT FOR OPINION IS OF A RECURRING NATURE REQUIRED TO BE SETTLED BY THE HIGHER COURT. THE CIRCULAR MAKES IT CLEAR THAT ON THE DATE OF ISS UANCE OF THE CIRCULAR, PREVAILING INSTRUCTIONS FIXING MONETARY L IMIT WILL HOLD GOOD EVEN FOR PENDING CASES. THE CIRCULAR DATED MAY 15, 2008 WOULD BE APPLICABLE TO PENDING CASES REQUIRING THE DEPARTMEN T TO WITHDRAW CASES WHEREIN THE TAX EFFECT IS LESS THAN THE PRESC RIBED MONETARY LIMITS. THE CIRCULAR DATED MAY 15, 2008, WOULD BE A PPLICABLE TO CASES PENDING BEFORE THE COURT EITHER FOR ADMISSION OR FOR FINAL DISPOSAL AND 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 M/S. J.J. POLYPLAST LTD. 3 (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 LAWS TO THE FACTS OF THE PRESENT CASE, WE DISMISS THE REVENUES APPEAL. 5. 2 6 !' 0 2 0 78 9 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. $ 0 4* : ; (6 12 TH OCTOBER 2012 4 0 9 ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH OCTOBER 2012 SD/- . .. . . .. . ! ! ! ! P.M. JAGTAP ACCOUNTANT MEMBER SD/- # # # # $% $% $% $% & ! & ! & ! & ! AMIT SHUKLA JUDICIAL MEMBER MUMBAI, ; ( ; ( ; ( ; ( DATED: 12 TH OCTOBER 2012 $ 0 -&#< =<* / COPY OF THE ORDER FORWARDED TO : (1) &( )2 / THE ASSESSEE; (2) !' / THE REVENUE; (3) > () / THE CIT(A); (4) > / THE CIT, MUMBAI CITY CONCERNED; (5) <'A -&&( , , / THE DR, ITAT, MUMBAI; (6) B) C / GUARD FILE. .< -& / TRUE COPY $( / BY ORDER - . DE / PRADEEP J. CHOWDHURY '2F &( D' / SR. PRIVATE SECRETARY G / 7 / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI