The ITO, Ward-2(4), Baroda V. M/s. Patel Associates, Baroda

ITSSA 416/AHD/2011

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2142 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-07-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 16-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection; Tax effect

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI ,ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ( ) ./ IT(SS)A NOS. 415 & 416/AHD/2011 / AY : 1999-00 & 2002-03 INCOME-TAX OFFICER, WARD 2 (4), BARODA VS M/S. PATEL ASSOCIATES, GARDEN VIEW BUILDING, SAYAJIGANJ, VADODARA PAN : AABFP 8510 D (APPELLANT) (RESPONDENT) BY RESPONDENT : SHRI SANJAY KUMAR, SR. DR. BY APPELLANT : WRITTEN SUBMISSION / // / DATE OF HEARING : 05/07/2016 /DATE OF PRONOUNCEMENT: 07/07/2016 / O R D E R PER SHRI S.S. GODARA, JUDICIAL MEMBER THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAIN ST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)- IV, AHMEDABAD OF EVEN DATED 05.04.2011 FOR ASSESSMENT YEARS 1999- 2000 AND 2002-2003. 2. FOR ASSESSMENT YEAR 1999-2000, THE REVENUE HAS T AKEN FOLLOWING EFFECTIVE GROUNDS:- 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS.3 .09 LACS MADE ON ACCOUNT OF UNDISCLOSED ON MONEY RECEIPTS BY ADOPT ING THE COST OF THE HOUSE SOLD DURING AY UNDER REPORT ON THE BASIS OF C OST OF THE HOUSE OF THE SAME TYPE SOLD IN THE AY 2002-03 SHOWN IN THE B OOKS. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS.9 .25 LACS MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN SHIVANJALI H OUSING PROJECT ON THE BASIS OF MATERIAL SEIZED DURING THE COURSE OF S EARCH ACTION. IT(SS)A NOS. 415 & 416/AHD/2011 ITO VS. M/S. PATEL ASSOCIATES A.Y. 1999-2000 & 2002-03 - 2 - 3. THE EFFECTIVE GROUNDS RAISED BY THE REVENUE IN I TS APPEAL FOR ASSESSMENT YEAR 2002-03 READ AS UNDER:- 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(APPEALS) ERRED IN RESTRICTING THE ADDITION OF R S.12,49,600/- MADE ON ACCOUNT OF UNDISCLOSED ON MONEY RECEIPTS TO RS .59,600/- WITHOUT APPRECIATING THAT THE ADDITION WAS MADE ON THE BASI S OF STATEMENT OF THE PARTNER OF THE ASSESSEE FIRM RECORDED ON 18.03. 2005 DURING THE COURSE OF SEARCH PROCEEDINGS. 2) THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT T HAT NO DEDUCTION ON ACCOUNT OF CONSTRUCTION EXPENSES CAN BE ALLOWED DUR ING THE YEAR UNDER REPORT SINCE THE CONSTRUCTION PROJECT WAS COM PLETED IN 1996 AND ALL THE EXPENSES WERE BOOKS IN THE YEARS OF CON STRUCTION ITSELF. FURTHER, THE ASSESSEE HAD ADMITTED THE COMPLETE REC EIPT OF ON MONEYS AS UNDISCLOSED IN RETURN OF INCOME FILED IN RESPONS E TO NOTICE U/S 153C OF THE ACT. 3. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FILED A WRITTEN SUBMISSION DATED 04.07.2016 WHEREBY HE SU BMITTED THAT THE PRESENT APPEALS OF THE REVENUE NEED TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF THE CBDT CIRCULAR NO.21 OF 20 15 DATED 10.12.2015. HE SUBMITTED THAT THE TAX EFFECT IN THE PRESENT REV ENUE'S APPEALS ARE RS.4,13,900/- AND RS.4,46,107/- FOR AYS 1999-00 AND 2002-03 RESPECTIVELY, WHICH IS BELOW THE PRESCRIBED LIMIT O F RS. 10 LACS. HE HAS ALSO SUBMITTED A WORKING OF THE TAX EFFECT. THE LD . DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED BY THE AFORESAID CBDT CIRCULAR. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSING THE GROUNDS OF AP PEAL RAISED BY THE REVENUE, WE PRIMA-FACIE FIND THAT THE TAX EFFECT IN EACH OF THESE APPEALS IS BELOW RS.10 LACS. AS PER THE ANNOUNCEMENT OF CE NTRAL BOARD OF IT(SS)A NOS. 415 & 416/AHD/2011 ITO VS. M/S. PATEL ASSOCIATES A.Y. 1999-2000 & 2002-03 - 3 - DIRECT TAXES (CBDT) DATED 10.12.2015 (CIRCULAR NO.2 1 OF 2015), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF G IVEN BY LD. CIT(A) BEFORE THE INCOME TAX APPELLATE TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST, EXCEEDS RS.10 LACS AND IT FURTH ER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PEND ING APPEALS. THE BOARD HAS PROVIDED EXEMPTIONS AT CLAUSE (8) OF THE INSTRUCTIONS WHEREIN IT HAS BEEN PROVIDED THAT THESE INSTRUCTIONS WILL N OT BE APPLICABLE, IF VIRES OF ANY PROVISIONS HAS BEEN QUASHED BY IMPUGNE D ORDER OR ADDITION WAS MADE ON SOME AUDIT OBJECTIONS OR THE A DDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/BANK ACCOUNTS, ETC. WE P RIMA-FACIE FIND THAT THE PRESENT CASES DO NOT FALL WITHIN THE EXEMPTION CLAUSE AND THE TAX EFFECT OF EACH OF THESE APPEALS IS BELOW RS. 10 LAK HS. THEREFORE, THESE APPEALS OF THE REVENUE ARE NOT MAINTAINABLE AND HEN CE DISMISSED. 5. IN THE RESULT, BOTH APPEALS OF THE REVENUE ARE D ISMISSED IN LIMINE. ORDER PRONOUNCED IN THE COURT ON 7 TH JULY, 2016 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 07/07/2016 *BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. TRUE COPY / BY ORDER, TRUE COPY / // / (DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD