ACIT 25(3), MUMBAI V. KANJ KALYANJI & CO., MUMBAI

ITSSA 57/MUM/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9364 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-06-2013
• Assessment Year: misc
• Appeal Filed On: 13-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAYUR R MUKADIA
• Assessee Lawyers: SURINDER JIT SINGH
• Keywords: Peak credit; Tax effect
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI I.P.BANSAL, JUDICIAL MEMBER AND SHRI SA NJAY ARORA, ACCOUNTANT MEMBER ITSS(A) NO.57 /MUM/2010 (ASSESSMENT YEAR/ BLOCK PERIOD -1989 T0 2000) THE ACIT-25(3), C-11, R.N0. 308, PRATYAKSH KAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA(EAST), MUMBAI-400051 M/S. KANJI KALYANJI & CO., KESER KUNJ, GROUND FLOOR, DR. DALVI ROAD, KANDIVALI (WEST), MUMBAI- 400067 PAN: AAEFK 3379E APPELLANT VS. RESPONDENT ASSESSEE BY: SHRI SURINDER JIT SINGH DEPARTMENT BY: SHRI MAYUR R. MUKADIA DATE OF HEARING: 17-06-2013 DATE OF PRONOUNCEMENT: 17. 06-2013 ORDER PER I.P.BANSAL, JM THIS APPEAL IS FILED BY THE REVENUE, IT IS DIRECTED AGAINST THE ORDER PASSED BY CIT (A) DATED 27 TH SEPTEMBER, 2010 FOR THE BLOCK PERIOD 01-04-1989 TO 13-01-2000. 2. GROUNDS OF APPEAL HAS RAISED BY THE REVENUE AS UNDER. 1. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTED THE AO TO GRANT RELIEF OF RS. 28,16,965/- ON ACCOUNT OF BENEFIT OF TELESCOPING AS COMPUTED IN OR DER DATED 03/01/2008. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE AO HAD MAD E IT CLEAR IN THE ORDER U/S 154 DT. 28/05/2008 THAT IN GIVING EFFECT TO ITAT ORDER INSTEAD OF GIVING RELIEF OF BENEFIT OF TELESCOPING OF PEAK OF RS. 26,60,000/- OF AY 1999-2000 RELIEF HAS BEEN ALLOWED OF PEAK OF 1998- 99 OF RS. 26,40,000-. 2 ITSS(A) NO.57M2010 MS. KANJ I KALYANJI & CO., 3. THE APPEAL PRAYS THAT THE ORDER OF THE LD. CIT( A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O. BE RESTOR ED. 3. INITIALLY THE AO HAD PASSED ORDER DATED 3 RD JANUARY 2008 IN WHICH EFFECT WAS GIVEN TO THE ITAT ORDER DATED 3 RD MAY 2006 AND INCOME WAS COMPUTED AS UNDER: UNDISCLOSED INCOME AS PER CIT(A)S ORDER DATED 29.07.2002 84,43,868 LESS: BENEFIT OF TELESCOPING OF ADDITIONS ON ACCOUNT OF ADDITIONS OF GROSS PROFIT AND SEED CAPITAL AS BEING PART OF OPENING PEAK BALANCE FOR AY 98-99 RS. 26,40,000 FOR AY 99-00 RS. 1,76,965 RS. 28,16,965 RS. 56,26,903 TOTAL UNDISCLOSED INCOME FOR THE BLOCK PERIOD RS. 5 6,26,903/- 4. SUBSEQUENTLY, THE AO VIDE SUO MOTO ORDER DATED 2 8 TH MAY 2008 PASSED U/S 154 HAS MODIFIED THE ORDER DATED 3 RD JANUARY, 2008 AND FOLLOWING COMPUTATION WAS MADE:- UNDISCLOSED INCOME AS PER CIT(A)S ORDER DATED 29.0 7.2002 RS. 84,43,868 LESS: BENEFIT OF TELESCOPING OF ADDITIONS OF GROSS PROFIT AND SEED CAPITAL AS BEING PART OF OPENING PEAK BALA NCE RS. 23,60,000 TOTAL UNDISCLOSED INCOME RS. 60,83,868 5. LEARNED CIT(A) ON MERIT HAS HELD THAT SUBSEQUENT ORDER PASSED BY THE AO WAS NOT CORRECT, AND THE EARLIER ORDER DATED 3 RD JANUARY, 2008 WAS CORRECT. THE DEPARTMENT IS AGGRIEVED BY SUCH ORDER OF THE CIT(A) AND HAS FILED AFOREMENTIONED GROUNDS OF APPEAL. 6. AT THE OUT SET THE LEARNED AR SUBMITTED THAT TH E DIFFERENCE OF INCOME IN BOTH THE ORDERS IS SUM OF RS. 4,56,956 THEREFORE, HE PLE ADED THE TAX EFFECT ON THE SAID 3 ITSS(A) NO.57M2010 MS. KANJ I KALYANJI & CO., INCOME WILL BE MUCH LESS THAN RS. 3 LAKH. HE PLEAD ED THAT THOUGH, THERE IS NO MERIT IN THE DEPARTMENTAL APPEAL AND OTHERWISE ALSO THE A PPEAL SHOULD BE SHOULD BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT. 7. ON THE OTHER HAND, THE LD. DR. RELIED UPON THE O RDER PASSED BY THE AO. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND THEIR CONTENTION HAVE CAREFULLY CONSIDERED. FROM THE FIGURE, IT IS CLEAR THAT TAX EFFECT IS MUCH LESS THAN RS. 3 LAKHS. AS PER CBDT INSTRUCTION NO.2 DATED 24.10 .2005 THE REVENUE AUTHORITIES ARE NOT AUTHORIZED TO FILE APPEAL BEFORE THE TRIBUNAL I N CASE TAX EFFECT IS LESS THAN RS.2.00 LACS. THE SAID LIMIT WAS RAISED TO RS.3.00 LACS VID E INSTRUCTION NO.3 OF 2011 DATED 9.2.2011 OF CBDT. THE HONBLE HIGH COURT OF BOMBAY IN CASE OF CIT VS. CAMCO COLOR CO. (254 ITR 565) HAVE HELD THAT THE APPEAL FILED BY THE REVENUE AUTHORITIES IN CONTRAVENTION OF THE INSTRUCTION OF CBDT IS NOT MAI NTAINABLE. THE HONBLE HIGH COURT OF BOMBAY IN CASE OF PITHWA ENGINEERING WORKS (276 ITR 519) HAVE ALSO HELD THAT THE INSTRUCTION ISSUED BY THE CBDT PRESCRIBING TAX LIMI T FOR FILING OF APPEAL BEFORE TRIBUNAL OR HIGH COURT WOULD ALSO APPLY TO PENDING APPEALS EVEN THOUGH ON THE DATE OF FILING APPEALS, THE MONETARY LIMIT MAY HAVE BEEN LOWER. IN THIS CASE ON THE DATE OF FILING OF APPEAL THE MONETARY LIMIT WAS RS.2.OO LAC S WHICH HAS NOW BEEN RAISED TO RS.3.OO LACS. THEREFORE, IN VIEW OF THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN CASE OF PITHWA ENGINEERING WORKS (SUPRA), THE APPEA L FILED BY THE REVENUE IN THIS CASE IS NOT MAINTAINABLE AS TAX EFFECT IS LESS THAN RS.3 .OO LACS. WE, THEREFORE, DISMISS THE APPEAL OF THE REVENUE AS NON - MAINTAINABLE. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 17 TH DAY OF JUNE2013. SD/- SD/- (SANJAY ARORA) (I.P.BANSAL ) ACCOUNTANT MEMBER JUDICIAL MEMB ER MUMBAI, DATED 17 TH JUNE, 2013. PRAMOD 4 ITSS(A) NO.57M2010 MS. KANJ I KALYANJI & CO., COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOM E TAX APPELLATE TRIBUNAL, MU MBAI BENCHES, MUMBAI.