ITO, Pune V. Shri Madhav Keshav Tadvalkar, Pune

ITA 761/PUN/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7673 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-02-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 19-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: L B BAPAT
• Keywords: Capital asset; Question of law; Tax effect
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER I.T.A. NO. 761/PN/10 (ASSTT. YEARS: 2005-06) INCOME-TAX OFFICER, .. APPELLANT WARD 6(4), PUNE VS. SHRI MADHAV KESHAV TADVALKAR, .. RES PONDENT FLAT NO E2, ATHASHRI APTT. S. NO 132/2, PASHAN, PUNE PAN AALPT 0812E APPELLANT BY: SMT NEERA MALHOTRA RESPONDENT BY: SHRI L B BAPAT DATE OF HEARING: 03.02.2012 DATE OF PRONOUNCEMENT: 03.02.2012 ORDER PER G.S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)III, PUNE DATED 25 .2.2010 WHICH, IN TURN, HAS ARISEN FROM THE ORDER OF THE ASSESSING OFFICER DATED 19.2.2009 PASSED UNDER SECTION 154 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEARS 2005-06. 2. THE GROUNDS OF APPEAL, AS RAISED BY THE REVENUE, R EAD AS UNDER: 1. THE ORDER OF THE LD CIT(A) IS CONTRARY TO LAW A ND TO THE FACTS AND THE CIRCUMSTANCES OF THE CASE. 2. THE LD CIT (A) ERRED ION FACTS AND IN LAW IN AL LOWING SET OFF OF LOSS IN RESPECT OF TRANSFER OF CAPITAL ASSET UTI MIP 95 & UTI MIP 97 A GAINST LONG TERM CAPITAL GAIN OF THIS YEAR. 3. FOR THESE AND SUCH OTHER GROUNDS AS MAYBE URGED AT THE TIME OF THE HEARING, THE ORDER OF THE LD CIT(A) MAY BE VACATED AND THAT OF THE AO BE RESTORED. 3. AT THE OUTSET, THE LEARNED COUNSEL FOR THE RESPOND ENT-ASSESSEE RAISED A PRELIMINARY OBJECTION BY POINTING OUT INSTRUCTION NO . 3/2011 DATED 09.02.2011 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXE S (CBDT) FIXING THE MONETARY LIMITS FOR FILING OF DEPARTMENTAL APPEAL BE FORE THE TRIBUNAL. IN TERMS OF THE SAID INSTRUCTION, MONETARY LIMIT FOR FILING DE PARTMENTAL APPEAL TO THE TRIBUNAL HAS BEEN FIXED AT RS 3 LAKHS. IN OTHER WORDS, I N CASES WHERE THE TAX EFFECT OF THE ADDITION DELETED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IS LESS THAN RS 3 LAKHS, NO APPEAL SHALL BE FILED BY THE DE PARTMENT IN SUCH CASES. ACCORDING TO THE LEARNED REPRESENTATIVE, THE TAX EFFE CT WITH RESPECT TO THE RELIEF ALLOWED BY THE COMMISSIONER OF INCOME-TAX (APP EALS) IN THE IMPUGNED APPEAL IS BELOW RS 3 LAKHS. SUCH FACTUAL MATRIX HAS NOT BEEN CONTESTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. 4. THE LEARNED REPRESENTATIVE FOR THE RESPONDENT-ASSESSEE FURTHER RELIED UPON A RECENT DECISION OF THE MUMBAI BENCH OF THE TRI BUNAL IN THE CASE OF ITO V SHRI ASHOK G. DHANDHARIAI, MUMBAI IN ITA NO2460/MUM /2010 DATED 28.2.2011 TO CANVASS THAT THE REVISED INSTRUCTIONS DATED 9 .2.2011 (SUPRA) ARE APPLICABLE TO THE PRESENT CASE ALSO, ALTHOUGH THE APPE AL HAS BEEN FILED ON A PRIOR DATE. 5. IN VIEW OF THE PRECEDENT BROUGHT OUT BY THE LEARN ED REPRESENTATIVE FOR THE RESPONDENT, FACTUALLY THE CAPTIONED DEPARTMENTAL APPEAL IS LIABLE TO BE CONSIDERED TO HAVE BEEN FILED CONTRARY TO THE CBDT INST RUCTIONS DATED 9.2.2011 (SUPRA). THE TRIBUNAL FOLLOWING THE JUDGMEN TS OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V MADHUKAR K. INAMDAR (H UF) 318 ITR 149 AND CIT V PITHWA ENGINEERING WORKS 276 ITR 519 (BOM) FOUN D IT APPROPRIATE TO DISMISS THE DEPARTMENTAL APPEAL ON THE GROUND THAT TAX EFFECT IS LESS THAN RS 3 LAKHS, EVEN WHERE THE DEPARTMENTAL APPEAL WAS FILED PR IOR TO THE 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 WHI CH DEALS WITH INSTRUCTION NO. 5 DT. 15.5.2008 SHALL EQUALLY APPLY TO THE PRES ENT CASE WHICH FALLS UNDER LNSTRUCTION NO. 3 DATED 9.2.2011. FOLLOWING THE RA TIO OF THE DECISION IN THE CASE OF CIT V PITHWA ENGG. WORK WHEREIN 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 UNDECIDED, WE DISMI SS THE DEPARTMENTAL APPEAL ON THE GROUND THAT THE TAX EFFECT IS LESS THAN 3 LA KHS. 6. FOLLOWING THE AFORESAID PRECEDENT, THE CAPTIONED APPEAL FILED BY THE REVENUE IS LIABLE TO BE DISMISSED IN VIEW OF CBDT INSTR UCTION 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 THE YEAR UNDER APPEAL IS BELOW RS 3 LAKHS AND IT HAS NOT BEEN SHOWN THAT THE APPE AL FALLS UNDER ANY OF THE EXCEPTIONS PROVIDED IN PARA 8 OF THE CBDT INSTRUCT ION (SUPRA). WE ORDER ACCORDINGLY. 7. IN THE RESULT, THE APPEAL IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 03.02.2012 A T THE CONCLUSION OF THE HEARING. SD/- SD/- (I C SUDHIR) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE: DATED: 3 RD FEBRUARY, 2012 B COPY OF THE ORDER FORWARDED TO : 1. MADHAV KESHAV TADVALKAR, PUNE 2. THE ITO WD 6(4), PUNE 3. THE CIT(A)-III PUNE 4. THE CIT-III PUNE 5. THE D.R, B BENCH, PUNE 6. GUARD FILE TRUE COPY BY ORDER SR. PS, ITAT, PUNE BENCHES, PUNE