DCIT, Agra V. M/s Shikha Beverages (P) Ltd., Agra

ITA 695/AGR/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6911 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-04-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 16-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R C SHARMA
• Assessee Lawyers: VITHAL DAS
• Keywords: Tax effect
• Section: 144

Judgement Text

1 ITA 695-08 IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH : AGRA. ( BEFORE SHRI R.K. GUPTA AND SHRI P.K. BANSAL ) ITA NO. 695/AG./2008 ASSTT. YEAR : 2004-05. THE DCIT 4(1), VS. M/S. SHIKHA BEVERAGES P. LTD. , AGRA. 30/22, SANJAY PLACE, AGRA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.C. SHARMA, JR. D/R RESPONDENT BY : SHRI VITHAL DAS, ADVOC ATE ORDER PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2004-05. 2. THE DEPARTMENT IS OBJECTING IN ACCEPTING THE LOS S OF RS. 10,04,943/- DECLARED BY ASSESSEE AND DELETING THE ENTIRE ADDITION OF RS. 10 ,54,943/- MADE BY THE ASSESSING OFFICER. 3. THE ASSESSEE FILED RETURN ON 31.10.2004 DECLARIN G LOSS OF RS. 10,04,943/-. ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 144 BY WHICH THE LOSS CLAIMED BY THE ASSESSEE WAS REJECTED AND THE ASSESSMENT WAS MA DE AT RS. 50,000/-. ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) WHO AFTER CONSI DERING THE SUBMISSIONS AND PERUSING OTHER MATERIALS ON RECORD FOUND THAT SIMILAR LOSS W AS ACCEPTED BY THE ASSESSING OFFICER FOR ASSESSMENT YEARS 2001-02 TO 2003-04. THE LD. C IT (A) IN PARA 3.3 FURTHER OBSERVED THAT THE WRITTEN SUBMISSIONS OF THE ASSESSEE WAS FO RWARDED TO THE ASSESSING OFFICER FOR 2 HIS COMMENTS ON 23.04.2008 AND THE REMAND REPORT WA S CALLED FOR. NO REPLY WAS RECEIVED FROM THE ASSESSING OFFICER. THEREFORE, THE LD. CIT (A) FOUND THAT THERE WAS NO BASIS IN DISALLOWING THE LOSS CLAIMED BY THE ASSESSEE AND MA KING THE ASSESSMENT AT RS. 50,000/-. ACCORDINGLY, THE ENTIRE ADDITION MADE BY THE ASSESS ING OFFICER WAS DELETED. NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 4. THE LD. D/R PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 5. ON THE OTHER HAND, THE LD. A/R FIRSTLY PLACED RE LIANCE ON THE ORDER OF THE LD. CIT (A). FURTHER, IT WAS STATED THAT IF THE TAX EFFECT IS LESS THAN RS. 2 LACS AND IN VIEW OF DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CAS E OF CIT VS. OBEETEE P. LTD., THE APPEAL OF THE DEPARTMENT IS LIABLE TO BE DISMISSED IN LIMINI. 6. WE HAVE HEARD AND CONSIDERED THE RIVAL SUBMISSIO NS AND CONTENTIONS CAREFULLY. AFTER PERUSING THE MATERIAL AVAILABLE ON RECORD AND THE ORDER OF THE LD. CIT (A), WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT (A). FIND ING OF THE LD. CIT (A) HAVE BEEN RECORDED IN PARA 4 OF THE ORDER, WHICH ARE AS UNDER :- 4. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, SUBMISSIONS OF THE AR AND THE POSITION OF LAW IN THIS REGARD. IN MY O PINION, THE APPELLANT DESERVES TO SUCCEED. I FIND FORCE IN THE ARGUMENTS OF THE APPELLANT. THE ASSESSING OFFICER HAS NOT GIVEN ANY BASIS TO REJECT THE LOSS DECLARED BY THE ASSESSEE AMOUNTING TO RS.(-) 10,04,943/- AND HAS MA DE THE ASSESSMENT ON POSITIVE INCOME OF RS. 50,000/- UNDER SECTION 144. METHOD OF ACCOUNTING OF THE ASSESSEE WAS THE SAME IN THE RELEVANT YEAR A S PER LAST YEARS. THIS LOSS HAS BEEN DETERMINED BY THE ASSESSEE AS PER AUD ITED ACCOUNTS MAINTAINED ACCORDING TO THE COMPANIES ACT. LOOKING TO THE PAST RECORD IN THIS CASE, I ACCEPT THE LOSS DECLARED BY THE ASSESS EE AND DELETE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTIO N 144 IN AN ADHOC MANNER. THE APPEAL IS, THEREFORE, ALLOWED. 3 NEITHER THE ABOVE FINDING COULD BE CONTROVERTED NOR ANY OTHER MATERIAL WAS BROUGHT ON RECORD TO ESTABLISH OTHERWISE. IT IS FURTHER SEEN T HAT SIMILAR LOSS WAS ALLOWED BY THE ASSESSING OFFICER HIMSELF FOR EARLIER YEARS 2001-02 TO 03-04 AND FOR ASSESSMENT YEAR 2005-06. ACCORDINGLY, WE CONFIRM THE ORDER OF LD. C IT (A). 7. EVEN OTHERWISE THE DEPARTMENTS APPEAL IS LIABLE TO BE DISMISSED IN VIEW OF THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CAS E OF CIT VS. OBEETEE P. LTD. WHEREBY THE DECISION OF TRIBUNAL WAS CONFIRMED BEIN G TAX EFFECT IS LESS THAN RS. 4 LACS OR RS. 5 LACS AS PROVIDED BY CIRCULAR DATED 24.10.2005 ISSUED BY CBDT. 8. THERE IS ANOTHER BOARD CIRCULAR BY WHICH THE DEP ARTMENTAL AUTHORITIES ARE DIRECTED NOT TO PURSUE ANY APPEAL BEFORE THE TRIBUNAL WHERE TAX EFFECT IS LESS THAN RS. 2 LACS. THE CIRCULAR CONSIDERED BY THE HONBLE JURISDICTIONAL H IGH COURT AND THE OTHER CIRCULAR ISSUED BY THE DEPARTMENT ARE WITHOUT ANY AMBIGUITY AND APP LICABLE ON THE DEPARTMENTAL AUTHORITIES. THE HONBLE JURISDICTIONAL HIGH COURT HAS ALSO OBSERVED THAT WHERE NO LEGAL ISSUE IS INVOLVED THEN THE DEPARTMENT IS NOT EXPECT ED TO PURSUE THE APPEAL BEFORE THE RESPECTIVE COURT I.E. THE TRIBUNAL AND THE HONBLE HIGH COURT. 9. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DISMISS THE APPEAL OF THE DEPARTMENT. 10. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. 11. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19 .04.2010 SD/- SD/- ( P.K. BANSAL ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AGRA, DATED : 23/04/2010. D/- 4 COPY FORWARDED TO :- THE APPELLANT THE RESPONDENT THE CIT THE CIT (A) CONCERNED. THE D/R, ITAT AGRA. GUARD FILE (ITA 695/AG/2008) BY ORDER, AR ITAT AGRA.