ITO 6(1)-1, MUMBAI V. ADRIK TRADERS P. TLD, MUMBAI

ITA 7118/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100845 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 20-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Question of law; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.7118/MUM./2011 (ASSESSMENT YEAR : 200607 ) INCOME TAX OFFICER WARD6(1)1, AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. APPELLANT V/S M/S. ADRIK TRADERS PVT. LTD. RUBY HOUSE, J.K. SAWANT MARG DADAR (W), MUMBAI 400 028 PAN AAACA4564A .... RESPONDENT REVENUE BY : SHRI RAKESH RANJAN ASSESSEE BY : SHRI PRADIP KAPASI DATE OF HEARING 23.07.2015 DATE OF PRONOUNCEMENT 14.08.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER THE PRESENT APPEAL PREFERRED BY THE REVENUE IS DIRE CTED AGAINST THE IMPUGNED ORDER DATED 8 TH JULY 2011, PASSED BY LEARNED COMMISSIONER (APPEALS)14, MUMBAI, FOR THE ASSESSME NT YEAR 2006 07, ON THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED CIT(A) ERRED IN DIRECTING THAT THE ANNU AL LETTING VALUE OF THE FLATS AND SHOP SHOULD BE TAKEN AT 2,20,000 AGAINST 4,80,000 ADOPTED BY THE A.O. M/S. ADRIK TRADERS PVT. LTD. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) ERRED IN HOLDING THAT THE INCOME ON SALE OF FLOAT NO.B07/901 WAS TO BE TAXED AS LONG TERM CAPIT AL GAIN AS AGAINST THE ASSESSING OFFICERS CONCLUSION ON THE B ASIS OF RECORD THAT SHORT TERM CAPITAL GAIN OF 7,38,427 HAD ARISEN ON ACCOUNT OF THE SAME, SINCE THE SAID FLAT WAS REGISTERED ON 28.4.2005, AND THE SAID FLAT WAS NOT SHOWN UNDER THE HEAD INVESTM ENT IN THE BALANCE SHEET OF THE ASSESSEE IN EARLIER YEARS . 2. BOTH THE PARTIES ADMITTED BEFORE US THAT THE TAX EF FECT ON THE DISPUTED ISSUES IS LESS THAN ` 4,00,000. IN VIEW OF CBDT INSTRUCTION NO.5/2014 (F .NO.279/MISC.142/2007- ITJ(PT) DATED 10 TH JULY 2014, THE REVENUE CANNOT FILE ANY APPEAL BEFO RE THE TRIBUNAL, WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY L IMIT OF RS. 4,00,000/- UNLESS THE CASE FALLS IN THE EXCEPTIONS. IN THIS REGARD, THE H ONBLE BOMBAY HIGH COURT TIME AND AGAIN HELD THAT THE INSTRUCTIONS / CIRCULARS PRESCR IBING MONETARY LIMIT FOR FILING OF THE APPEAL WILL HAVE RETROSPECTIVE EFFECT AND WOULD BE APPLICABLE ON PENDING APPEAL ALSO. 2. HOWEVER, THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S MADHUKAR K. INAMDAR (HUF), [2009] 318 ITR 149 (BOM. ) HAS HELD THAT SUCH CIRCULARS ARE APPLICABLE ON PENDING APPEALS ALSO. T HE RELEVANT OBSERVATIONS ARE AS UNDER: 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 M/S. ADRIK TRADERS PVT. LTD. 3 COURT EITHER FOR ADMISSION OR FOR FINAL DISPOSAL AN D IT IS BINDING ON THE REVENUE. 3. 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., [2011] 335 ITR 591 (DEL.). APPLYING THE PROPOSITIONS LAID DOWN IN THES E CASE LAWS TO THE FACTS OF THE PRESENT CASE, THE REVENUES APPEAL IS NOT MAINT AINABLE AND LIABLE TO BE DISMISSED. 4. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED IN TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 14-08-2015 S S SD/ - SD G.S. PANNU ACCOUNTANT MEMBER S SD/ - / - SANJAY GARG JUDICIAL MEMBER MUMBAI, DATED: 14.08.2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI / / / / / / /