ITO, New Delhi V. M/s. Lock Ranjan Exports Pvt. Ltd, New Delhi

ITA 913/DEL/2009

• Counselvise Citation: 91320114 RSA 2009
• Duration Of Justice: 6 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-04-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 12-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV DUDEJA
• Assessee Lawyers: KAANAN KAPUR
• Keywords: Tax effect
• Section: 11; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D , NEW DELHI BEFORE SH. N. K. SAINI , AM AND SH. I. C. SUDHIR , JM ITA NO. 913/DEL/2009 : ASSTT. YEAR : 2000 - 01 INCOME TAX OFFICER , WARD - 4(4 ), NEW DELHI VS M/S LOCK RANJAN EXPORTS PVT. LTD., 415, SAINIK VIHAR, NEW DELHI - 110034 (APPELLANT) (RESPONDENT) PAN NO. ASSESSEE BY : SH. KAANAN KAPUR, ADV. REVENUE BY : SH . GAURAV DUDEJA , SR. DR DATE OF HEARING : 01 . 04 . 2015 DATE O F PRONOUNCEMENT : 01.04 .2015 ORDER PER N.K . SAINI , A.M. THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER DATED 02.09.2011 OF THE LD. CIT(A) - XXII , NEW DELHI. 2. THE GROUNDS RAISED IN THE APPEAL OF THE DEPARTMENT READ AS UNDER: - 1. THE ORDER OF THE LEARNED CIT(APPEALS) IS ERRONEOUS & CONTRARY TO FACTS & LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING ADDITION MADE U/S 68 OF RS. 7,00,020/ - IGNORING: A) THAT BEFORE THE ISSUANCE OF CHEQUES FROM THE BANK ACCOUNTS OF THE SHARE APPLICANTS THERE WERE MANY ENTRIES ITA NO. 913 /DE L/2009 LOCK RANJAN EXPORTS PVT. LTD. 2 OF CASH DEPOSITS & IT IS SEEN THAT MONEY WAS WITHDRAWN ON THE SAME DATE OR THE VERY NEXT DATE WHICH SHOWS THAT THE ALLEGED SHARE APPLICANTS ARE ENTRY OPER ATORS. B) THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE VIDE LETTER DT. 06.12.2007 SURRENDERED RS. 2.00 LACS AS RECEIVED AS SHARE APPLICATION MONEY. C) THAT THE ASSESSEE FAILED TO PRODUCE THE ALLEGED SHARE APPLICANTS FOR VERIFICATION. MERE SUBMISSION OF DOCUMENTS & MATERIALS IS HELD TO BE INSUFFICIENT IN THE CASE OF HINDUSTAN TEA TRADING CO. VS CIT 263 ITR 289. D) THE FINDINGS & INVESTIGATIONS MADE BY THE INVESTIGATION WING OF THE DEPARTMENT. E) THE DICTUM GIVEN BY THE HON BLE SUPREME COURT IN CIT VS DURGA P RASAD MORE 82 ITR 540 & SUMATI DAYAL VS CIT 214 ITR 801 IN WHICH APEX COURT HAS LAID DOWN THE PROPOSITION THAT THE COURTS & TRIBUNALS SHOULD SEE THE PREPONDERANCE OF PROBABILITIES WHILE CONSIDERING THE EVIDENCE FURNISHED BY THE ASSESSEE. F) THAT IN RESPECT O F THIS CASE, THE RATIO OF CASE LAWS RELIED UPON BY FIRST APPELLATE AUTHORITY ARE NOT APPLICABLE AT ALL. THE CIT(A) BASED HIS DECISION ON THE JUDGMENT OF THE SUPREME COURT IN DIVINE LEASING & FINANCE LTD. & LOVELY EXPORTS IGNORING THAT THE FACTS ARE ESSENTI ALLY DIFFERENT IN AS MUCH AS IN THIS CASE THE ASSESSEE IS A PRIVATE COMPANY AND NO MEMBER OF THE PUBLIC PARTICIPATED. ON THE OTHER HAND IN THE CASE OF DIVINE LEASING & FINANCE LTD. & LOVELY EXPORTS, THE SHARE APPLICATIONS WERE MADE BY WAY OF PUBLIC ISSUES. G) THAT THE AO IS DUTY BOUND U/S 68 TO ENQUIRE INTO THE CREDITWORTHINESS, IDENTITY OF THE CREDITORS & GENUINENESS ITA NO. 913 /DE L/2009 LOCK RANJAN EXPORTS PVT. LTD. 3 OF THE TRANSACTIONS. THE CIT(A) HAS ERRED IN IGNORING SUCH FINDINGS RECORDED BY THE AO IN THE ASSESSMENT ORDER. 3. THE APPELLANT CRAVES LEAVE TO ADD, TO LATER, OR AMEND ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 3. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE TAX EFFECT IN THIS APPEAL IS LESS THAN RS.4 ,00,000/ - , T HEREFORE, THE DEPARTMENT OUGHT NOT TO HAVE FILED THIS APPEAL IN VIEW OF THE CIRCULAR ISSUED BY THE CBDT AND THE PROVISIONS CONTAINED IN SECTION 268A OF THE INCOME TAX ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT). 4. ON THE OTHER HAND, THE LD. D.R., ALTHOUGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THIS FACT THAT TAX EFFECT IN THIS APPEAL IS LESS THAN RS.4 ,00,000/ - . 5 . AFTER CONSIDERING THE SUBMISSIONS OF THE LD. D.R. AND THE MATERIAL ON RECORD, IT IS NOTICED THAT SECTIO N 268A HAS BEEN INSERTED BY THE FINANCE ACT, 2008 WITH RETRO SPECTIVE EFFECT FROM 01/04/99. THE PROVISIONS CONTAINED IN SECTION 268A READ AS UNDER: 268A. (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE ORDERS, INSTRUCTIONS OR DIRECTIONS TO OTHER INCOME - TAX AU THORITIES, FIXING SUCH MONETARY LIMITS AS IT MAY DEEM FIT, FOR THE PURPOSE OF REGULATING FILING OF ITA NO. 913 /DE L/2009 LOCK RANJAN EXPORTS PVT. LTD. 4 APPEAL OR APPLICATION FOR REFERENCE BY ANY INCOME - TAX AUTHORITY UNDER THE PROVISIONS OF THIS CHAPTER. (2) WHERE, IN PURSUANCE OF THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1), AN INCOME - TAX AUTHORITY HAS NOT FILED ANY APPEAL OR APPLICATION FOR REFERENCE ON ANY ISSUE IN THE CASE OF AN ASSESSEE FOR ANY ASSESSMENT YEAR, IT SHALL NOT PRECLUDE SUCH AUTHORITY FROM FILING AN APPEAL OR APPLICATI ON FOR REFERENCE ON THE SAME ISSUE IN THE CASE OF (A) THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR; OR ( B ) ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR. (3) NOTWITHSTANDING THAT NO APPEAL OR APPLICATION FOR REFERENCE HAS BEEN FILED BY A N INCOME - TAX AUTHORITY PURSUANT TO THE ORDERS OR INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1), IT SHALL NOT BE LAWFUL FOR AN ASSESSEE, BEING A PARTY IN ANY APPEAL OR REFERENCE, TO CONTEND THAT THE INCOME - TAX AUTHORITY HAS ACQUIESCED IN THE DECIS ION ON THE DISPUTED ISSUE BY NOT FILING AN APPEAL OR APPLICATION FOR REFERENCE IN ANY CASE. (4) THE APPELLATE TRIBUNAL OR COURT, HEARING SUCH APPEAL OR REFERENCE, SHALL HAVE REGARD TO THE ORDERS, INSTRUCTIONS OR DIRECTIONS ISSUED UNDER SUB - SECTION (1) AND THE CIRCUMSTANCES UNDER WHICH SUCH APPEAL OR APPLICATION FOR REFERENCE WAS FILED OR NOT FILED IN RESPECT OF ANY CASE. (5) EVERY ORDER, INSTRUCTION OR DIRECTION WHICH HAS BEEN ISSUED BY THE BOARD FIXING MONETARY LIMITS FOR ITA NO. 913 /DE L/2009 LOCK RANJAN EXPORTS PVT. LTD. 5 FILING AN APPEAL OR APPLICATION FOR REFERENCE SHALL BE DEEMED TO HAVE BEEN ISSUED UNDER SUB - SECTION (1) AND THE PROVISIONS OF SUB - SECTIONS (2), (3) AND (4) SHALL APPLY ACCORDINGLY. ] 6 . IT IS NOT IN DISPUTE THAT THE BOARD S INSTRUCTION OR DIRECTIONS ISSUED TO THE INCOME - TAX AUTHORITIES ARE BINDING ON THOSE AUTHORITIES , THEREFORE , THE DEPARTMENT OUGHT NOT TO HAVE FILED THE APPEAL IN VIEW OF THE ABOVE SAID PROVISIONS MENTIONED IN SECTION 268A OF THE ACT SINCE THE TAX EFFECT IN THE INSTANT CASE IS LESS THAN THE AMOUNT PRESCRIBED FOR NOT FIL ING THE APPEAL. 7 . IT IS NOTICED THAT THE CBDT HAS ISSUED INSTRUCTION NO. 5 OF 2014 DATED 1 0.0 7.2014 , BY WHICH THE CBDT HAS REV ISED THE MONETARY LIMIT TO RS. 4 ,00,000/ - FOR FILING THE APPEAL BEFORE THE TRIBUNAL. 8 . KEEPING IN VIEW THE CBDT INSTRUCTION N O. 5 OF 201 4 DATED 10 .0 7 .201 4 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, WE ARE OF THE VIEW THAT THE REVENUE SHOULD NOT HAVE FILED THE INSTANT APPEAL BEFORE THE TRIBUNAL. WHILE TAKING SUCH A VIEW, WE ARE FORTIFIED BY THE FOLLOWING DE CISIONS OF HON'BLE PUNJAB & HARYANA HIGH COURT : - ITA NO. 913 /DE L/2009 LOCK RANJAN EXPORTS PVT. LTD. 6 1. CIT V OSCAR LABORATORIES P. LTD (2010) 324 ITR 115 (P&H) 2. CIT V ABINASH GUPTA (2010) 327 ITR 619 (P&H) 3. CIT V VARINDERA CONSTRUCTION CO. (2011) 331 ITR 449 (P&H)(FB) 9 . SIMILARLY THE HON BLE DELHI HIGH COUR T IN THE CASE OF CIT V. DELHI RACE CLUB LTD. IN ITA NO.128/2008, ORDER DATED 03.03.2011 BY FOLLOWING THE EARLIER ORDER DATED 02.08.2010 IN ITA NO.179/1991 IN THE CASE OF CIT DELHI - III V. M/S. P.S. JAIN & CO. HELD THAT SUCH CIRCULAR WOULD ALSO BE APPLICABLE TO PENDING CASES. 10 . FROM THE RATIO LAID DOWN BY THE HON BLE DELHI HIGH COURT, IT IS CLEAR THAT THE INSTRUCTIONS ISSUED IN THE CIRCULARS BY CBDT ARE APPLICABLE FOR PENDING CASES ALSO. THEREFORE, BY KEEPING IN VIEW THE RATIO LAID DOWN IN THE AFORESAID REFERRED TO CASES, WE ARE OF THE CONSIDERED VIEW THAT INSTRUCTION NO. 5 /1 4 DATED 1 0.0 7 .201 4 ISSUED BY THE CBDT ARE APPLICABLE FOR THE PENDING CASES ALSO AND IN THE SAID INSTRUCTIONS, MONETARY TAX LIMIT FOR NOT FILING THE APPEAL BEFORE THE ITAT IS RS. 4 .00 LAKH S. 11 . IN VIEW OF THE ABOVE, WITHOUT GOING INTO MERITS OF THE CASE, WE DISMISS THE APPEAL FILED BY THE REVENUE. ITA NO. 913 /DE L/2009 LOCK RANJAN EXPORTS PVT. LTD. 7 1 2 . IN THE RESULT, APPEAL OF THE REVENUE STAND DISMISSED . ( ORDER PRON OUNCED IN THE COURT ON 01/04 / 2015) . SD/ - SD/ - (I. C. SUDHIR) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 01/04 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR