ITO, Pune V. Dhoniba Ganpat Gawade(HUF), Pune

ITA 750/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56506 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 1991-1992
• Appeal Filed On: 18-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRI
• Keywords: Capital asset; Question of law; Tax effect
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBE R AND SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 750/PN/2010 (ASSESSMENT YEAR: 1991-92) ITO, WD 9(2), PUNE .. APP ELLANT VS. DHONDIBA GANPAT GAWADE (HUF) .. RESPONDENT GAWADE COLONY, CHINCHWAD , PUNE -411 044. PAN NOT ALLOTED APPELLANT BY: NONE RESPONDENT BY: SHRI PANKAJ G ARG, DR ORDER PER D.KARUNAKARA RAO, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)V, PUNE DATED 26.2.2010 WHICH, IN TURN, HAVE ARISEN FROM ORDERS OF THE ASSESSING OFFI CER DATED 28.03.2002 30.12.2008 PASSED UNDER SECTION 144 R.W.S. 147 OF T HE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEARS 1991-1992 RESPECTIVELY. 2. THE GROUNDS OF APPEAL, AS RAISED BY THE REVENUE, READ AS UNDER: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN SAYING THAT THERE WAS NO TRANSFER DURING THE YEAR UNDER CONSIDERATION, IGNORING RATIOS OF HONBLE APEX COUR T IN THE CASE OF CIT VS. PODAR CEMENTS PVT. LTD & OTHERS (226 ITR 625). 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN SAYING THAT THERE WAS NO TRANSFER OF CAPITAL ASSETS DURING THE YEAR UNDER CONSIDERATION WHEN THE ASSESSEE RECEIVED CONSIDERATION FOR THE LAND UNDER CONSIDERATION AND ALLOWED THE PURCHASER TO GET THE PLANT SANCTIONED AND CONSTRUCT BUILDINGS ON THE PROPERTY. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN SAYING THAT THERE WAS NO TRANSFER OF CAPITAL ASSETS, THOUGH OTHER CO-OWNERS OF THIS VERY PROPERTY OFFERED THE C APITAL GAINS ON ACCOUNT OF TRANSFER TO TAX DURING THE YEAR UNDER CONSIDERATION . 3. IN BRIEF, THE FACTS ARE THAT THE ASSESSEE HAD NO T DISCLOSED HIS SHARE OF CAPITAL GAINS OF RS.4,36,667/- AND DID NOT FILE RET URN OF INCOME IN RESPONSE TO NOTICE U/S.148. ASSESSING OFFICER COMPLETED THE A SSESSMENT EX-PARTE U/S. ITA NO. 750/PN/2010 (ASSESSMENT YEAR: 1991-92) DHONDIBA GANPAT GAWADE (HUF) 144 R.W.S.147 BY ASSESSING THE TOTAL INCOME AT RS. 4,36,670/- . AGGRIEVED WITH THE SAME ASSESSEE IS IN APPEAL BEFORE THE CIT(A) WH O PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED WITH THE SAME, THE REVENUE IS IN AP PEAL BEFORE US CONTENDING THAT THE RELIEF ALLOWED BY THE COMMISSIONER OF INCO ME-TAX (APPEALS) IS NOT IN ACCORDANCE WITH THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SOLID CONTAINERS LTD. V. DCIT 308 ITR 417 (BOM) AS ALSO JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF LOGITRONICS P. LTD. V. CIT (ITA NO 1623 OF 20109, ORDER DATED 18.2.2011). 5. AT THE TIME OF HEARING, THE LEARNED REPRESENTATI VE FOR THE RESPONDENT- ASSESSEE RAISED A PRELIMINARY OBJECTION BY POINTING OUT INSTRUCTION NO. 3/2011 DATED 09.02.2011 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) FIXING THE MONETARY LIMITS FOR FILING OF DEPARTMENT AL APPEALS BEFORE THE TRIBUNAL. IN TERMS OF THE SAID INSTRUCTION, MONETAR Y LIMIT FOR FILING DEPARTMENTAL APPEAL TO THE TRIBUNAL HAS BEEN FIXED AT RS 3 LAKHS. IN OTHER WORDS, IN CASES WHERE THE TAX EFFECT OF THE ADDITIO NS DELETED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IS LESS THAN R S 3 LAKHS, NO APPEAL SHALL BE FILED BY THE DEPARTMENT IN SUCH CASES. ACCORDING TO THE LEARNED REPRESENTATIVE, THE TAX EFFECT WITH RESPECT TO THE RELIEF ALLOWED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IN THE CAPTION ED APPEALS IS BELOW RS 3 LAKHS. 6. THE LEARNED REPRESENTATIVE FOR THE RESPONDENT-AS SESSEE FURTHER RELIED UPON A RECENT DECISION OF THE MUMBAI BENCH OF THE T RIBUNAL IN THE CASE OF ITO V SHRI ASHOK G. DHANDHARIAI, MUMBAI IN ITA NO2460/M UM/2010 DATED 28.2.2011 TO CANVASS THAT THE REVISED INSTRUCTIONS DATED 9.2.2011 (SUPRA) ARE APPLICABLE TO THE PRESENT CASE ALSO, ALTHOUGH SUCH APPEALS HAVE BEEN FILED ON A PRIOR DATE. 7. IN VIEW OF THE PRECEDENT BROUGHT OUT BY THE LEAR NED REPRESENTATIVE FOR THE RESPONDENT, FACTUALLY THE CAPTIONED DEPARTMENTA L APPEALS ARE LIABLE TO BE CONSIDERED TO HAVE BEEN FILED CONTRARY TO THE CBDT INSTRUCTIONS DATED 9.2.2011 (SUPRA). THE TRIBUNAL FOLLOWING THE JUDGME NT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V MADHUKAR K. INAMDAR (HUF) 318 ITR 149 AND CIT V PITHWA ENGINEERING WORKS 276 ITR 519 (BOM) FO UND IT APPROPRIATE TO DISMISS THE DEPARTMENTAL APPEAL ON THE GROUND THAT TAX EFFECT IS LESS THAN RS 3 LAKHS, EVEN IN A CASE WHERE THE DEPARTMENTAL APPE ALS WAS FILED PRIOR TO THE ITA NO. 750/PN/2010 (ASSESSMENT YEAR: 1991-92) DHONDIBA GANPAT GAWADE (HUF) DATE OF THE CBDT INSTRUCTION DATED 9.2.2011 (SUPRA) . THE FOLLOWING DISCUSSION IN THE ORDER IS WORTHY OF NOTICE: 5. WE HEARD BOTH THE PARTIES. THE CASE OF CIT VS. CHHAJER PACKAGING & PLASTICS PVT. LTD. 300 ITR RELIED ON BY THE DR IS DISTINGUIS HABLE FROM THE FACTS OF THE PRESENT CASE. AT PARA 12 PAGE 184 OF THE DECISION IN THE CA SE OF CHHAJER PACKAGING & PLASTICS PVT. LTD. IT HAS BEEN HELD AS FOLLOWS: OTHERWISE ALSO, PARAGRAPH OF THIS CIRCULAR ITSELF SAVES CERTAIN APPEALS FROM BEING OBSTRUCTED DUE TO FINANCIAL LIMITS. PARAGRAPH 3 READS: THE BOARD HAS ALSO DECIDED THAT IN CASES INVOLVING SUBSTANTIAL QUESTION OF LAW OF IMPORTANCE AS WELL AS IN CASES W HERE THE SAME QUESTION OF LAW WILL REPEATEDLY ARISE, EITHER IN TH E CASE CONCERNED OR IN SIMILAR CASES, SHOULD BE SEPARATELY CONSIDERED O N THE MERITS WITHOUT BEING HINDERED BY THE MONETARY LIMITS. IT IS EVIDENT THAT, WHENEVER THERE IS A SUBSTANTIAL QUESTION OF LAW, OR QUESTION OF LAW WHICH IS LIKELY TO RECUR IN FUTURE, THE DEPA RTMENT IS NOT PROHIBITED FROM FILING AND PURSUING APPEALS. WE BELIEVE THAT THE SA VING CLAUSE SAVES THE PRESENT APPEAL SINCE IT INVOLVES A QUESTION OF LAW REGARDING INTERPRETATION OF SECTION 275(1)(C) OF THE ACT, AND MORE PARTICULARLY THE ASPECT OF MANNER IN WHICH THE LIMITATION SHOULD BE COMPUTED IN THE LIGH T OF THE SAID PROVISIONS. WE HAVE, THEREFORE, PROCEEDED TO HEAR THE ADVOCATES ON THE MERITS. IN OUR OPINION, THE CASE OF CIT V CHHAJER WAS WITH RESPECT OF INTERPRETATION OF 275(1)(C) OF THE ACT AND HENCE CAME UNDER THE EXCEP TION CLAUSE UNDER THE CBDT CIRCULAR AND WAS NOT OBSTRUCTED BY THE MONETAR Y LIMIT OF RS 3 LAKHS PRESCRIBED BY THE CIRCULAR. THEREFORE THE CASE OF 3 00 ITR 180 IS INAPPLICABLE TO THE FACTS OF OUR CASE. FURTHER INSTRUCTION NO. 5 DT. 15.5.2008 FIXING THE MONETARY LIMIT AT RS 2 LAKHS IS SIMILAR TO THAT OF INSTRUCTION NO. 3 DATED 9.2.2011 WHICH THE ASSESSEE HAS BROUGHT TO OUR NOTI CE IN SUPPORT OF HIS CONTENTION. SINCE BOTH THE INSTRUCTION NOS. 5 & 3 A RE IDENTICAL, THE RATIO OF THE DECISION IN THE CASE OF CIT V PITHWA ENGG. WORK WHICH DEALS WITH INSTRUCTION NO. 5 DT. 15.5.2008 SHALL EQUALLY APPLY TO THE PRESENT CASE WHICH FALLS UNDER LNSTRUCTION NO. 3 DATED 9.2.2011. FOLL OWING THE RATIO OF THE DECISION IN THE CASE OF CIT V PITHWA ENGG. WORK WHE REIN IT HAS BEEN HELD THAT IN OUR VIEW, THE BOARDS CIRCULAR DT. 27 TH MARCH, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDE D, WE DISMISS THE DEPARTMENTAL APPEAL ON THE GROUND THAT THE TAX EFFE CT IS LESS THAN 3 LAKHS. 8. FOLLOWING THE AFORESAID PRECEDENT, THE CAPTIONED APPEALS FILED BY THE REVENUE ARE LIABLE TO BE DISMISSED IN VIEW OF CBDT INSTRUCTION NO. 3 DATED 9.2.2011 (SUPRA) AS THE TAX EFFECT WITH RESPECT TO THE QUANTUM OF RELIEF ALLOWED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IN EACH OF THE YEAR IS BELOW RS 3 LAKHS AND IT HAS NOT BEEN SHOWN THAT THE APPEALS FALL UNDER ANY OF THE EXCEPTIONS PROVIDED IN PARA 8 OF THE CBDT INSTR UCTION (SUPRA). WE ORDER ACCORDINGLY. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 07-10-2011. SD/- SD/- (SHAILENDRA KUMAR YADAV) (D.KARUNA KARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 07-10-2011 ASHWINI ITA NO. 750/PN/2010 (ASSESSMENT YEAR: 1991-92) DHONDIBA GANPAT GAWADE (HUF) COPY TO:- 1) ASSESSEE 2) ITO, WD -9(2), PUNE 3) THE CIT(A) V, PUNE 4) THE CIT CONCERNED 5) THE DEPARTMENTAL REPRESENTATIVE, A BENCH, I.T .A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., PUNE