DCIT CEN CIR 42, MUMBAI V. SANKALCHAND C. JAIN, MUMBAI

ITA 7662/MUM/2010

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3322 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 29-07-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 08-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CULLA MUMBAI PANGIR NO AACPJ K
• Keywords: Deemed dividend; Tax effect

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER / I .T A NO. 7662/MUM/2010 ( / ASSESSMENT YEAR : 2005 - 06 THE DCIT, CENTRAL CIRCLE - 42, AAYAKAR BHAVAN, MUMBAI - 400 020 / VS. MR. SANKALCHAND C. JAIN, FLAT NO. 2202, SUMER TOWER, SETH MOTI SHAH LAND, BYCULLA, MUMBAI - 400 010 ./ ./ PAN/GIR NO. AACPJ 0662K ( / APPELLANT ) .. ( / RESPONDENT ) / REVENUE BY: SHRI MANJUNATHA SWAMY / ASSESEE BY: SHRI NISHIT GANDHI / DATE OF HEARING : 2 0 . 0 1. 201 6 / DATE OF PRONOUNCEMENT : 2 0 . 0 1 .201 6 / O R D E R PER C.N. PRASAD, JM : THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 36 , MUMBAI DATED 2 8 . 01 .201 0 PERTAINING TO ASSESSMENT YEAR 200 5 - 0 6 . 2. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN LAW IN HOLDING THAT NOTHING CAN BE BROUGHT TO TAX AS DEEMED DIVIDEND BECAUSE IN THE CAPITAL ACCOUNT OF TH E ASSESSEE IN THE BOOKS OF ACCOUNTS OF ITA. NO . 7662/M/2010 2 THE FIRM M/S. SUPERSHWA CONSTRUCTIONS, THE AMOUNT OF CREDIT WAS EXCEEDING DEBIT AMOUNT. 2. THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN LAW IN DELETING THE ADDITION OF RS. 16,02,420/ - BECAUSE IN THIS CASE THE PAYMENT WAS AVAILABLE FOR INDIVIDUAL BENEFIT OF THE SHARE HOLDER TO THE EXTENT OF HIS PROFIT SHARING RATION IN THE FIRM AND HENCE THE SAME WAS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT, AND THUS IN IGNORING THE RATIO LAI D DOWN WBY THE HONBLE S.C. IN MUKUNDRAY K. SHAH (2007) 160 TAXMAN 276 (SC). 3. BEFORE GOING INTO THE MERITS OF THE CASE, WE CONSIDER CBDTS LATEST INSTRUCTIONS VIDE CIRCULAR NO.21/2015 DATED 10/12/2015, THE RELEVANT PORTION OF WHICH READ AS UNDER: - CIRCULAR NO. 21/2015 F NO 279/MISC. 142/2007 - ITJ (PT) GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD DIRECT TAXES NEW DELHI THE 10TH DECEMBER, 2015 SUBJECT: REVISION OF MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT - MEASURES FOR REDUCING LITIGATION - REG REFERENCE IS INVITED TO BOARD'S INSTRUCTION NO 5/2014 DATED 10.07.2014 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEPARTMENTAL APPEALS (IN INCOME - TAX MATTERS) BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE THE SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE INSTRU CTION, IT HAS BEEN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE THE SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIED BELOW. ITA. NO . 7662/M/2010 3 3. HENCEFORTH, APPEAL S/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: - S. NO APPEALS IN INCOME - TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 10,00,000/ - 2. BEFORE HIGH COURT 20,00,000/ - 3. BEFORE SUPREME COURT 25,00,000/ - IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. IT IS FURTHER CLARIFIED BY THE BOARD IN ITS CIRCULAR THAT THESE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS AND TRIBUNALS. IT IS ALSO MADE CLEAR THAT PENDING APPEALS BELOW THE MONITORY LIMITS FIXED IN PARA - 3 ABOVE MAY BE WITHDRAWN OR NOT PRESSED. 5 . IN THE CASE IN HAND, THE TOTAL DEMAND AS PER CIT(A)S ORDER IS LESS THAN THE AMOUNT OF RS. 10,00,000/ - ,WHICH IS BELOW THE MONETARY LIMITS AS MENTIONED IN CBDT CIRCULAR DATED 10.1 2.2015 (SUPRA). FOLLOWING THE SAME, THIS APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 2 0 TH JANUARY, 201 6 . SD/ - SD/ - ( RAJESH KUMAR ) ( C.N. PRASAD ) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI ; DATED : 2 0 TH JANUARY, 201 6 . . ./ RJ , SR. PS ITA. NO . 7662/M/2010 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI