ASST CIT 4(3), MUMBAI V. TALREJA TEXTILES INDUSTRIES P.LTD, MUMBAI

ITA 7581/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2898 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 26-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: FAROOKH IRANI
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 7581/MUM/2013 (ASSESSMENT YEAR:2010-11) ASSTT. COMMISSIONER OF INCOME TAX-4(3), 6 TH FLOOR, R.NO.649, AAYAKAR BHAVAN, MUMBAI 400 020 APPELLANT VS. M/S. TALREJA TEXTILES INDUSTRIES PVT. LTD., 282, KALBADEVI ROAD, MUMBAI 400 002 RESPONDENT PAN: AAACT3961C /BY APPELLANT : SHRI LOVE KUMAR, D.R. /BY RESPONDENT : MR. FAROOKH IRANI, A.R. /DATE OF HEARING : 20.06.2016 /DATE OF PRONOUNCEMENT : 24.06.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-8, MUMBAI, DATED 28.10.2012 FOR A.Y. 2010-11 ON FOLLOWING GROUNDS: ITA NO.7581/MUM/13 A.Y. 10-11 [ACIT VS. M/S. TALREJA TEXTILES INDUS. P. LTD.] PAGE 2 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITI ON OF RS.8,64,000/- U/S.36(1)(II) OF THE I.T.ACT, 1961 AS THE SAME WAS PAID AS A BONUS TO DIRECTORS BY THE ASSESSEE WITHOUT DECLARING ANY DIVIDEND TO ITS SHAREHOLDERS/DIRECTORS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITI ON OF RS.16,26,656/- AS THE SAME WAS PAID AS A PREMIUM FOR KEYMAN INSURANCE POLICY WHEN THE NECESSARY CONDITIONS FOR CONSIDERING IT AS KEYMAN INSURANCE POLICY ARE NOT SATISFIED. 2. BEFORE US, AT THE OUTSET, LD. AUTHORIZED REPRESENTA TIVE SUBMITTED THAT THE PRESENT APPEAL OF THE REVENUE NE EDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF T HE CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015. THE LD. D EPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED BY THE AFORESAID CBDT CIRCULAR. 2.1 WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATE RIAL ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENUE, WE PRIMA-FACIE FIND THAT THE TAX EFFECT IN THIS APPEAL IS BELOW RS.10 LACS. AS PER THE ANNOUNCEMENT OF CE NTRAL BOARD OF DIRECT TAXES (CBDT) DATED 10.12.2015 (CIRC ULAR NO. 21 OF 2015), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF GIVEN BY LD. CIT(A) BEFORE THE INCOME TAX TR IBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST EXCEEDS RS. 10 L ACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RET ROSPECTIVELY TO THE PENDING APPEALS. IN THE PRESENT CASE, SINCE IT IS AN UNDISPUTED FACT THAT ON THE ADDITIONS WHICH ARE IN DISPUTE, THE TAX EFFECT IS LESS THAN RS. 10 LACS AND IN THE ABSENCE OF ANY MATERIAL ON RECORD BY THE REVENUE TO DEMONSTRATE TH AT THE ITA NO.7581/MUM/13 A.Y. 10-11 [ACIT VS. M/S. TALREJA TEXTILES INDUS. P. LTD.] PAGE 3 ISSUE IN THE PRESENT APPEAL IS COVERED BY EXEMPTION S SPECIFIED IN CLAUSE (8) OF THE AFORESAID CBDT CIRCULAR, WE AR E OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY THE INSTRUCTI ONS OF THE AFORESAID CBDT CIRCULAR WOULD BE APPLICABLE TO THE PRESENT APPEAL OF THE DEPARTMENT AND THEREFORE THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. HOWE VER, IN CASE THERE IS ANY ERROR IN THE COMPUTATION OF THE T AX EFFECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT C IRCULAR IS NOT APPLICABLE, IT WOULD BE OPEN TO THE REVENUE TO SEEK REVIVAL OF THE APPEAL. IN SUCH CIRCUMSTANCES, WE DISMISS T HE APPEAL OF REVENUE WITHOUT EXPRESSING ANY OPINION ON MERITS OF THE CASE. 3. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF JUNE, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 24/06/2016 S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&