The ITO, Ward-2(3), Surat V. Shri Sajjankumar Agarwal, Surat

ITA 898/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60432 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 26-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R MALPANI
• Keywords: Unexplained cash credit; Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI D. K. TYAGI, JM AND A. MOHAN ALANKAMON Y, AM) ITA NO.898/AHD/2010 A. Y.: 2006-07 THE INCOME TAX OFFICER, WARD -2(3), ROOM NO.118, 1 ST FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT VS SHRI SAJJANKUAMR AGARWAL, PROP. DHANLAXMI TEXTILES, 29, BASEMENT, SILK CITY TEXTILE MARKET, RING ROAD, SURAT PA NO. AAZPA 7761 P (APPELLANT) (RESPONDENT) APPELLANT BY SHRI K. MADHUSUDAN, SR. DR RESPONDENT BY SHRI R. MALPANI, AR DATE OF HEARING: 17 -05-2012 DATE OF PRONOUNCEMENT:25 -05-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS FILED BY THE REVENUE AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A )-II, SURAT IN APPEAL NO. CAS-II/442/08-09 DATED 28-12-2009, FOR A SSESSMENT YEAR 2006-07. 2. THE REVENUE HAS RAISED THREE GROUNDS IN ITS APPE AL WHEREIN GROUNDS NO.2 AND 3 ARE GENERAL IN NATURE AND DO NOT SURVIVE FOR ADJUDICATION. GROUND NO.1 OF THE APPEAL IS REPRODUC ED HEREIN BELOW: 1) ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED ITA NO.898/AHD/2010 (AY: 2006-07) ITO WARD -2(3), SURAT VS SAJJANKUMAR AGARWAL 2 A) IN DELETING THE DISALLOWANCE OF PURCHASES OF RS.2,35,143/- B) IN DELETING THE ADDITION MADE BY THE A. O. OF RS.1,55,780/- ON ACCOUNT OF PROCESS CHARGES AND FRE IGHT EXPENSES C) IN DELETING THE ADDITION MADE BY THE AO OF RS.3, 00,000/- PERTAINS TO PREVIOUS YEAR PURCHASES. D) IN DELETING THE ADDITION MADE BY THE AO OF RS.1, 98,217 ON ACCOUNT OF UNEXPLAINED CREDITS. 3. FACTS:- THE ASSESSEE IS AN INDIVIDUAL FILED HIS RET URN OF INCOME ON 15-11-2006 DECLARING TOTAL INCOME OF RS.1,42,054 /-. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS FRAMED U/S 143(3) OF THE IT ACT ON 31-12-2008 WHEREIN CERTAIN ADDITIONS WERE MA DE. ON APPEAL BY THE ASSESSEE BEFORE THE LEARNED CIT(A), THE ADDI TION DUE TO DISALLOWANCE OF PURCHASE FOR RS.2,35,143/-, ADDITIO N OF RS.1,55,780/- DUE TO DISALLOWANCE OF PROCESS CHARGES AND FREIGHT EXPENSES, ADDITION OF RS.3,00,000/- DUE TO PURCHASES FOR THE PREVIOUS YEAR AND ADDITION OF RS.1,98,217/- DUE TO UNEXPLAINED CREDIT S WERE DELETED. NOW, THE REVENUE IS IN APPEAL BEFORE US AGAINST THI S RELIEF GRANTED BY THE LEARNED CIT(A). 4. AT THE BEGINNING OF THE HEARING IT WAS POINTED O UT BY THE LEARNED AR THAT THE APPEAL OF THE REVENUE IS NOT SU STAINABLE DUE TO MONETARY LIMIT OF RS.3,00,000/- FIXED BY THE CBDT A GAINST FILING OF APPEAL. THE LEARNED AR SUBMITTED THE WORKING OF THE TAX EFFECT WHICH IS LESS THAN RS.3,00,000/- AND THE SAME IS NOT DISP UTED BY THE REVENUE. FURTHER, THE LEARNED AR RELIED ON THE DECI SION OF ITAT ITA NO.898/AHD/2010 (AY: 2006-07) ITO WARD -2(3), SURAT VS SAJJANKUMAR AGARWAL 3 AHMEDABAD C BENCH IN IT(SS)A NO.62/AHD/2011 DATED 17-02-2012 IN THE CASE ITO, WARD-1, BHARUCH VS KIRAN K. MAJUMD AR WHEREIN THE BENCH FOLLOWING THE DECISION IN THE CASE OF ITO VS M/S. LAXMI JEWEL PVT. LTD. IN ITA NO.2165/MUM/2010 HELD THE ISSUE I N FAVOUR OF THE ASSESSEE. THE LEARNED DR COULD NOT CONTROVERT TO TH E SUBMISSIONS OF THE LEARNED AR. 4. AFTER HEARING BOTH THE SIDES AND PERUSING THE MA TERIALS ON RECORD WE FIND THE SUBMISSION OF THE LEARNED AR IS IN ORDER. THE TAX EFFECT OF THE APPEAL OF THE REVENUE IS BELOW THE MO NETARY LIMIT OF RS.3,00,000/-. FURTHER, THE ITAT MUMBAI BENCH IN TH E CASE OF M/S. LAXMI JEWEL PVT. LTD. (SUPRA) HELD AS UNDER IN PARA 6 OF THE ORDER: 6. WE HAVE CONSIDERED THE ISSUE. THERE IS NO DOUBT THAT THE TAX EFFECT IN THIS CASE IS ONLY 2,07,512/-. AS PER INSTRUCTION NO.3 OF O2011 DATED 09.02.2011 APPEAL BEFORE APPELLATE T RIBUNAL CAN BE FILED WHERE THE TAX EFFECT EXCEEDS THE MONIT ORY LIMIT OF 3,00,000/-. HOWEVER, CONSIDERING THE SIMILAR SITUAT ION WHERE TAX LIMITS WERE MODIFIED BY THE CBDT INSTRUCTION NO.5 O F 2008 THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. MADHUKAR K. INAMDAR (HUF) (SUPRA) HELD THAT THE CIR CULAR WILL BE APPLICABLE TO THE CASES PENDING BEFORE THE COURT EITHER FOR ADMISSION OR FOR FINAL DISPOSAL. IN VIEW OF THE ORD ER OF THE JURISDICTIONAL HIGH COURT WE HOLD THAT INSTRUCTION NO.3 DATED 09.02.2011 IS APPLICABLE FOR THE APPEAL PREFERRED B Y THE REVENUE. THEREFORE, THE APPEAL IS DISMISSED ON THE ISSUE OF TAX EFFECT INVOLVED. EVEN OTHERWISE THERE IS NO CASE FO R THE REVENUE ON MERITS AS THE ISSUE WAS HELD IN AGAINST THE REVENUE BY THE ITAT ORDER IN THE CASE OF LIVING STO NES JEWELLERY (P) LTD. VS. DCIT 31 SOT 323, WHICH THE C IT(A) FOLLOWED. ITA NO.898/AHD/2010 (AY: 2006-07) ITO WARD -2(3), SURAT VS SAJJANKUMAR AGARWAL 4 5. CONSIDERING THE ABOVE DISCUSSIONS AND THE DECISI ON OF ITAT MUMBAI BENCH SUPRA, WE HEREBY DISMISS THE APPEAL OF THE REVENUE ON THE GROUND OF MONETARY LIMIT. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25-05-2012 SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 21-05-12 (CORRECTED ON 22-05- 12) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 22-05-12 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S ./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: