ACIT CIR 21(1), MUMBAI V. LITTLE ITALY, MUMBAI

ITA 934/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8403 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 05-11-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-02-2013
• Court: TRIBUNAL
• Department Lawyers: SACHIDANAND DUBE
• Assessee Lawyers: R S CHOKSHI
• Keywords: Tax effect
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A , MUMBAI BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A.NO. 934/M/2013 (AY: 2009 - 2010 ) ACIT, CIRCLE 21(1), 6 TH FLOOR, R.NO.601, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051. VS. LITTLE ITALY, 18 - B, JUHU TARA ROAD, NEAR MANEKH COOPER SCHOOL, JUHU, MUMBAI 400 049. PAN: AAAFM3948B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SACHIDANAND DUBE RESPONDENT BY : SHRI R.S. CHOKSHI DATE OF HEARING: 5 .11.2014 DATE OF ORDER: 21 .11.2014 O R D E R PER D. KARUNAKARA RAO, AM : THIS APPEAL FILED BY THE REVENUE ON 4.2.2013 IS AGAINST THE ORDER OF THE CIT (A) - 32, MUMBAI DATED 26.11.2012 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 10,40,090/ - ON ACCOUNT OF EXCESS STOCK FOUND DURING THE SURVEY IGNORING THAT STOCKS AS PER BOOKS ON 5.2.2009 WAS RS. 5.8 LAKHS WHEREAS PER SURVEY ON 16.2.2009, STOCK WAS FOUND THAT RS. 16.2 LAKHS. 2. ON THE FACTS AND IN THE CIR CUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 10,40,090/ - ON ACCOUNT OF EXCESS STOCK FOUND DURING THE SURVEY IGNORING THAT THE ASSESSEE HAS NOT DISCLOSED EXCESS STOCK IN P & L AND CLOSING STOCK HAS BEEN WORKED OUT ON THE BASIS OF PRE - DETERMINED GROSS PROFIT. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING A RESTAURANT AND FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 41,84,643/ - . ASSESSMEN T WAS COMPLETED U/S 143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF RS. 52,00,633/ - . IN THE ASSESSMENT, AO MADE AN 2 ADDITION OF RS. 10,40,990/ - , THE INCOME DECLARED DURING THE ACTION U/S 133A OF THE ACT. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE CI T (A). 4. DURING THE FIRST APPELLATE PROCEEDINGS, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) ALLOWED THE APPEAL AND DIRECTED THE AO TO DELETE THE SAID ADDITION. AGGRIEVED WITH THE DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE THE T RIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 5. DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TAX EFFECT IN THE PRESENT CASE IS RS.3.12 LAKHS ONLY IE., LESS THAN THE MONETARY LIMIT PRESCRIBED BY THE CBDT AND THEREFORE, THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE. IN THIS REGARD, HE BROUGHT OUR ATTENTION TO THE ORDER OF THE TRIBUNAL IN THE CASE OF DCIT VS. M/S. SHINHAN BANK VIDE ITA NO.4549/M/2013 FOR THE AY 2006 - 07 WHEREIN THE TRIBUNAL , ON THE BASIS OF TAX EFFECT (BELOW RS. 4 LAKHS) , DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE VIDE PARA 5 OF ITS ORDER DATED 29.9.2014 AND READ OUT THE RELEVANT PARAS. LD COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT (A). 6. ON THE OTHER HAND, LD DR DUTIFULLY RELIED ON THE ORDER OF THE AO . 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED DECISION OF THE ITAT IN THE CASE OF DCIT VS. M/S. SHINHAN BANK (SUPRA). ON PERUSAL OF PARA 5 OF THE SAID ORDER OF THE TRIBUNAL (SUPRA), WE FIND THE SAME ARE RELEVA NT IN THIS REGARD AND THEREFORE, THE SAME IS REPRODUCED AS UNDER: 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT AFTER TH E ORDER OF THE TRIBU NAL DATED 27.6.2007, THE ONLY AMOUNT FOR WHICH PENALTY WAS LEVIABLE WAS THE GUARANTEE COMMISSION OF RS. 7.32 LAKHS. AS PE R THE CALCULATION FURNISHED BY THE ASSESSEE AND VERIFIED BY THE DR, THE TAX EFFECT [@ 41.82] IS 3.06 LAKHS. WE FIND THAT AS PER THE INSTRUCTION NO.5, DATED 10.7.2014, ISSUED BY THE CBDT, NO APPEAL SHOULD BE FILED WHERE TAX EFFECT OF THE DISPUTED ISSUE WAS LESS THAN RS. 4 LAKHS. WE FIND THAT IN THE CASE MADHUKAR INAMDAR (185 TAXMAN 101) AND SURESHCHANDRA D KHATOD (31 TAXMANN.COM 74) RE SPECTIVELY, HONBLE BOMBAY HIGH COURT AND HONBLE GUJARAT HIGH COURT HAVE HELD THAT CIRCULAR OF THE CBDT WERE APPLICABLE TO THE CASES WHERE APPEALS WERE PENDING AND NOT ONLY TO THE APPEALS TO BE FILED AFTER THE CIRCULAR IS ISSUED. AS THE TAX EFFECT, IN TH E CASE UNDER CONSIDERATION IS RS. 3.06 LA KHS I.E., LESS THAN THE MONETARY - LIMIT PRESCRIBED BY THE BOARD, SO WE DECIDE THE EFFECTIVE GROUNDS OF APPEAL AGAINST THE AO. 3 8. FROM THE ABOVE, IT IS A SETTLED POSITION OF THE ISS UE THAT AS PER THE INSTRUCTION N O. 5, DATED 10.7.2014, ISSUED BY THE CBDT, NO APPEAL SHOULD BE FILED WHERE TAX EFFECT OF THE DISPUTED ISSUE WAS LESS THAN RS. 4 LAKHS. CONSIDERING THE FACT THAT THE TAX EFFECT IN THE INSTANT CASE IS BELOW THE SAID MONETARY LIMIT, THE GROUNDS RAISED BY THE RE VENUE SHOULD BE DECIDED AGAINST THE REVENUE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOU NCED IN THE OPEN COURT ON 2 1 S T NOVEMBER, 2014. S D / - S D / - (H.L. KARWA) (D. KARUNAKARA RAO) PRESIDENT ACCOUNTANT MEMBER DATE: 2 1 .11.2014. AT :MUMBAI OKK COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR A, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI