ACIT 22(2), NAVI MUMBAI V. SUDHIR PURSHOTTAM MEHTA, MUMBAI

ITA 6804/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3341 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 10-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI BEFORE SHRI C.N. PRASAD, JM AND RAMIT KOCHAR, AM ./ I.T.A. NO. 6804/MUM/2014 ( / ASSESSMENT YEAR: 2010-11 ACIT 22(2) 4 TH FLOOR, TOWER NO.6 VASHI RAILWAY STATION COMPLEX, VASHI NAVI MUMBAI. / VS. SUDHIR PURSHOTTAM MEHTA, 28/C MAVJIVAN SOCIETY MEHUL ROAD, CHEMBUR, MUMBAI ./ ./PAN/GIR NO. AACPM 5103C ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. POOJA SWAROOP, D.R. / RESPONDENT BY : SHRI GANESH RAJGOPALAN, D.R. / DATE OF HEARING : 25/08/2016 / DATE OF PRONOUNCEMENT : 07 /09 /2016 / O R D E R PER C.N. PRASAD, J.M.: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-33, MUMBAI DAT ED 28..2014 FOR A.Y. 2009-10 ARISING OUT OF ASSESSMENT ORDER PASSED U/S.143(3) OF THE INCOME TAX ACT. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL. 2 ITA NO. 6804/MUM/2014 (A.Y. 2010-11) ACIT V/S. SHRI SUDHIR PURSHOTTAN MEHTA. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE EXEMPTION OF RS.50,00,000/- U /S.54EC OF THE INCOME TAX ACT 1961 EVEN THOUGH THE INVESTMENT IN BOND WAS MAD E BY ASSESSEE BEYOND THE PRESCRIBED PERIOD OF SIX MONTHS AS PER CO-OPERATION AGREEMENT DATED 18.06.2009 AND ALSO NOT APPRECIATING THE FACT THAT ASSESSEE COULD NOT FULFILLED THE CONDITIONS LAID DOWN IN SECTION U/S.54EC OF INC OME TAX ACT, 1961. 3. AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS.10 LAC, THERE FORE, BY VIRTUE OF CIRCULAR NO.21 OF 2015 DATED 10.12.2015 THE APPEAL MAY BE DI SMISSED AS NOT PRESSED BY REVENUE. 4. LEARNED DR SUBMITS THAT REPORT WAS CALLED FOR FR OM THE ASSESSING OFFICER AND ACCORDING TO WHICH THE TAX EFFECT IN TH IS APPEAL IS MORE THAN RS.10 LAC IF EDUCATION CESS IS ALSO INCLUDED. THERE FORE, SHE SUBMITS THAT SINCE THE TAX EFFECT IS MORE THAN RS.10 LAC THE APP EAL SHOULD NOT BE DISMISSED FOLLOWING THE CIRCULAR OF THE CBDT REFERR ED ABOVE. IN REPLY, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE I SSUE OF WHETHER THE TERM TAX USED FOR THE BOARDS INSTRUCTION IS INCLUSIVE OF CESS OR WITHOUT INCLUDING THE CESS HAS BEEN CONSIDERED BY THE LUCKN OW BENCH TRIBUNAL IN THE CASE OF DCIT VS. YUVRAJ SINGH IN ITA NO.408/LKW /2011 DATED 23.12.2013 AND SUBMITS THE TAX EFFECT SHOULD BE WOR KED OUT WITHOUT INCLUDING CESS. THEREFORE, HE SUBMITS THAT IF EDUCA TION CESS IS NOT INCLUDED THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS.10 LA C AND THE REVENUES APPEAL IS LIABLE TO BE DISMISSED IN VIEW OF INSTRUCTION OF THE CBDT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE WORKING GIVEN BY THE LEARNED DR AND THE DECISION OF ITAT LUKNOW B ENCH PLACED BEFORE 3 ITA NO. 6804/MUM/2014 (A.Y. 2010-11) ACIT V/S. SHRI SUDHIR PURSHOTTAN MEHTA. US. THE REPORT SUBMITTED BY THE ASSESSING OFFICER C ALCULATING THE TAX EFFECT IN THIS CASE IS AS UNDER: ORDER U/S.143(3) TAX RS.44,37,886/- EDU. CESS RS.1,33,137/- TOTAL RS.45,71,023/- ORDER U/S.250 TAX- RS.34,37,887/- EDU. CESS RS.1,03,137/- TOTAL RS.35,41,024/- TAX EFFECT RS.10,29,999/- 6. IT COULD BE SEEN FROM THE ABOVE, THE TAX EFFECT CALCULATED BY THE ASSESSING OFFICER INCLUDING EDUCATION CESS IS RS.10 ,29,999/- IF THE EDUCATION CESS IS EXCLUDED FOR ARRIVING TAX EFFECT IS LESS THAN RS.10 LAC. 7. ON A PERUSAL OF THE ORDER OF THE ITAT LUCKNOW BE NCH IN THE CASE OF DCIT VS. YUVRAJ SINGH IN ITA NO.408/LKW/2011 DATED 23.12.2013, WE OBSERVE THAT THE ISSUE AS TO WHETHER THE TERM TAX USED IN BOARDS INSTRUCTION IS INCLUSIVE OF CESS OR EXCLUDING CESS HAS BEEN CONSIDERED AND HELD AS UNDER: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERU SED THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENT CITED BY LEARN ED A.R. OF THE ASSESSEE. WE FIND THAT AS PER BOARD'S INSTRUCTION N O.3 OF 2011 DATED FEBRUARY 9, 2011, IT WAS PRESCRIBED THAT THE REVENU E SHOULD NOT FILE ANY APPEAL BEFORE THE TRIBUNAL IF THE TAX EFFECT DO ES NOT EXCEED RS.3 LAKHS. ADMITTEDLY, IN THE PRESENT CASE, TAX EFFECT WITHOUT INCLUDING CESS IS RS.3 LAKHS ONLY AND THE SAME IS NOT EXCEEDING RS.3 LAKHS . NOW THE ONLY QUESTION TO BE DECIDED IS WHETHER THE TERM TAX USED IN BOARD'S INSTRUCTION IS INCLUSIVE OF CESS OR WITHOUT INCLUDING CESS. IN THIS REGARD, WE ARE OF THE CONSIDERED OPINION THAT THE JUDGMENT OF HON'BLE DELHI HIGH COU RT CITED BY LEARNED A.R. OF THE ASSESSEE IS RELEVANT BECAUSE IN THIS CA SE ALSO, THE TERM TAX AND CESS WERE LOOKED INTO IN RESPECT OF INCOME TAX PROC EEDINGS ONLY. IT IS NOTED BY HON'BLE DELHI HIGH COURT THAT AS PER THE PROVISI ONS OF SECTION 43B, APPLICABLE DURING FINANCIAL YEAR 85-86, THE DISALLO WANCE WAS TO BE MADE U/S.43B IN RESPECT OF ANY SUM PAYABLE BY THE ASSESS EE BY WAY OF TAX OR 4 ITA NO. 6804/MUM/2014 (A.Y. 2010-11) ACIT V/S. SHRI SUDHIR PURSHOTTAN MEHTA. DUTY UNDER ANY LAW AND LATER ON WITH EFFECT FROM 01 /04/89, SUCH DISALLOWANCE WAS REQUIRED TO BE MADE IN RESPECT OF ANY SUM PAYABLE BY THE ASSESSEE BY WAY OF TAX, DUTY OR CESS OR FEE BY WHAT EVER NAME CALLED. IN THAT CASE, IT WAS HELD BY HON'BLE DELHI HIGH COURT THAT CESS AND CESS SURCHARGE DO NOT FALL WITHIN THE CHARACTERISTICS OF THE TAX. FOLLOWING THIS JUDGMENT, WE HOLD THAT IN THE PRESENT CASE ALS O, FOR THE PURPOSE OF DECIDING APPLICABILITY OF BOARD'S INSTRUCTION, T AX EFFECT SHOULD BE WORKED OUT WITHOUT INCLUDING CESS AN THE PRESENT CA SE, THE PRESENT APPEAL OF THE REVENUE IS HIT BY THE BOARD'S INSTRUCTION AND TAX EFFECT BEIN G NOT EXCESS OF RS.3 LAKHS, THIS APPEAL OF THE REVEN UE IS NOT MAINTAINABLE. AS A RESULT, THE APPEAL OF THE REVENU E STANDS DISMISSED. 8. IT COULD BE SEEN FROM THE ABOVE, THE CO-ORDINATE BENCH OF THE TRIBUNAL HELD THAT FOR THE PURPOSE OF DECIDING APPL ICABILITY OF BOARDS INSTRUCTION TAX EFFECT SHOULD BE WORKED OUT WITHOUT INCLUDING CESS. IN THIS CASE, THE TAX EFFECT EXCLUDING EDUCATION CESS IS AD MITTEDLY LESS THAN RS.10 LAC, THEREFORE, RESPECTFULLY FOLLOWING THE SAID DEC ISION OF THE ITAT LUCKNOW BENCH AND IN VIEW OF BOARDS CIRCULAR NO.21 OF 2015 DATED 10.12.2015, WE DISMISSED THE REVENUES APPEAL. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH SEPTEMBER, 2016 SD/- SD/- (RAMIT KOCHAR) (C.N. PRASAD) / ACCOUNTANT MEMBER # $ / JUDICIAL MEMBER MUMBAI; ' DATED : 07 .09. 2016 P.K.K., SR.P.S. 5 ITA NO. 6804/MUM/2014 (A.Y. 2010-11) ACIT V/S. SHRI SUDHIR PURSHOTTAN MEHTA. $() *) /COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT - CONCERNED 5. ), - $$./ , ./ , / DR, ITAT, MUMBAI 6. - 01 / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) ./ , / ITAT, MUMBAI