The Assistant Commissioner Of Income Tax, Circle- 1(1) & TPS, Mangalore V. Shri Vinod M Sherlekar , Mangalore

MA 117/BANG/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2621 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 29-09-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI
• Assessee Lawyers: SHREEHARI KUTSA
• Keywords: Tax effect

Judgement Text

MPNO.117/BANG/2020 VINOD M SHERLEKAR, MANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL BBENCH: BANGALORE BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P. NO.117/BANG/2020 (ARISING OUT OF ITA NO.2758/BANG/2017) ASSESSMENT YEAR: 2013-14 ACIT CIRCLE-1(1) & TPS MANGALORE VS. SHRI VINOD M. SHERLEKAR NO.4-1-103, VEENU CONSTRUCTIONS BALLALBAGH, M.G. ROAD MANGALORE PAN NO.AHMPS4701M APPELLANT RESPONDENT A PPELLANT BY : SMT. R. PREMI, D.R. RESPONDENT BY : SHRI SHREE HARI KUTSA, A.R. DATE OF HEARING : 19.03.2021 DATE OF PRONOUNCEMENT : 25.06.2021 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE REVENUE HAS FILED THIS MISCELLANEOUS APPLICATIO N SEEKING RECALL OF ORDER DATED 26.6.2020 PASSED BY THE COORD INATE BENCH IN THE REVENUES APPEAL NO.2758/BANG/2017. 2. IT IS STATED IN THE MISCELLANEOUS APPLICATION TH AT THE TRIBUNAL HAS DISMISSED THE APPEAL OF THE REVENUE ON THE GROU ND THAT THE TAX EFFECT INVOLVED IN THE APPEAL FILED BY THE REVENUE IS LESS THAN RS.50 LAKHS. IT IS FURTHER STATED THAT THE TAX EFFECT IN VOLVED IN RESPECT OF THE ISSUES DISPUTED BY THE REVENUE IS MORE THAN RS. 50 LAKHS. THE MP NO.117/BANG/2020 VINOD M SHERLEKAR, MANGALORE PAGE 2 OF 5 REVENUE HAS ALSO FILED A LETTER WRITTEN BY A.O., WH EREIN IT IS STATED THAT THE RELIEF GRANTED BY CIT(A) IS RS.1,72,63,459 /- AND THE TAX EFFECT INVOLVED THEREON IS RS.53,34,409/- AND THE S AME CONSTITUTES A MISTAKE APPARENT FROM RECORD. ACCORDINGLY, IT IS PRAYED THAT THAT ORDER OF THE TRIBUNAL BE RECALLED. 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. FO R THE SAKE OF CONVENIENCE, WE HAVE TABULATED BELOW THE ADDITION M ADE BY A.O. AND THE RELIEF GRANTED BY THE CIT(A). SL.NO. DETAILS OF ADDITION ADDITION MADE BY A.O (RS.) PARA NO.IN CIT(A)S ORDER RELIEF GRANTED BY LDCIT(A) (RS.) 1 INVESTMENT IN JEWELLERY 10,21,850/ - 4.1 10,21,850/ - 2 INVESTMENT IN UJIRE PROPERTY 20,00,000/ - 5.3 20,00,000/ - 3 TELESCOPING BENEFIT FOR SHAKTHI NAGAR PROPERTY 25,00,000 6.1 11,58,680/- 4. TOTALLING MISTAKE OF SHAKTHI NAGAR PROPERTY 5,00,000/- 4 P A DUKODI LAND 1,25,00,000/ - 7.4 1, 25,00,000/ - 5 RENTAL INCOME 82,929/ - 9.3 82,929/ - TOTAL 1,81,04,779/- 1,72,63,459/- 4. WE SHALL NOW REPRODUCE THE GROUNDS RAISED BY THE REVENUE BEFORE THE TRIBUNAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE ADDITION MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN JEWELLERY OF RS.10,21,850/- AND INVES TMENT UJIRE PROPERTY OF RS.20,00,000/- DECLARED BY THE ASSESSEE U/S 132(4) BASED ON THE EVIDENCES FOUND? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM FOR TELESCOP ING EFFECT NOT CLAIMED BY THE ASSESSEE DURING ASSESSMENT PROCEEDIN G? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE MERITS OF T HE CASE AND IGNORING THE FACTS REFLECTED IN THE ASSESSMENT ORDER? MP NO.117/BANG/2020 VINOD M SHERLEKAR, MANGALORE PAGE 3 OF 5 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT T HE ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PADUKODI LAND OF RS.1, 25,00,000/- WAS MADE BASED ON THE AGREEMENT FOUND DURING THE SEARCH WHICH CLEARLY SPECIFIES THE TOTAL CONSIDERATION? 5. ANY OTHER GROUNDS THAT MAY ARISE AT THE TIME OF HEA RING. 5. A PERUSAL OF THE ABOVE GROUNDS URGED BY THE REVENUE WOULD SHOW THAT THE REVENUE IS CONTESTING THE ORDER OF LD CIT(A) IN RESPECT OF FOLLOWING ISSUES ONLY:- GROUND NO.3 AND 5 ARE GENERAL IN NATURE GROUND NO.1 IS ON THE FOLLOWING ISSUES:- INVESTMENT IN JEWELLERY - 10,21,850 INVESTMENT IN UJIRE PROPERTY - 20,00,000 GROUND NO.2 RELATES TO THE TELESCOPING BENEFIT GIVEN FOR SHAKTHI NAGAR PROPERTY - 11,58,680 GROUND NO. 5 RELATES TO INVESTMENT IN PADUKODI LAND - 1,25,00,000 --------------- TOTAL 1,66,80,530 ============ AS PER CIRCULAR NO.3/2018 DATED 11.07.2018 ISSUED B Y CBDT, THE ISSUES CONTESTED BY THE REVENUE ALONE NEEDS TO BE T AKEN INTO CONSIDERATION FOR COMPUTING TAX EFFECT. IN THIS RE GARD, PARAGRAPH NO.4 OF THE ABOVE SAID CIRCULAR IS RELEVANT AND THE SAME READS AS UNDER:- 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFER ENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX TH AT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST W HICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS D ISPUTED ISSUES). FURTHER, TAX EFFECT SHALL BE TAX INCLUDING APPLIC ABLE SURCHARGE AND CESS. HOWEVER, THE TAX WILL NOT INCLUDE ANY INTEREST TH EREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE MP NO.117/BANG/2020 VINOD M SHERLEKAR, MANGALORE PAGE 4 OF 5 THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DI SPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHER E RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PEN ALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. IN THE INSTANT CASE, THE TOTAL INCOME COMPUTED BY T HE ASSESSING OFFICER WAS RS.1,22,96,445/-. THE AGGREG ATE AMOUNT OF THE ISSUES CONTESTED BY THE REVENUE IS RS.1,66,80,5 30/- AND IF THE SAME IS REMOVED, THEN THE TOTAL INCOME SHALL RESULT IN A LOSS FIGURE. THE TOTAL AMOUNT OF DEMAND RAISED IN THE ASSESSMENT ORDER IS RS.32,80,129/-, WHICH IS BELOW THE MONETARY LIMIT O F RS.50.00 LAKHS. 6. IT IS ALSO STATED THAT IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NO TIONAL TAX COMPUTED ON THE DISPUTED ADDITIONS. ACCORDINGLY, WE HAVE COMPUTED THE NOTIONAL TAX EFFECT ON THE AMOUNT OF R S.1,66,80,530/- AS UNDER:- FOR RS. 10,00,000/- - 1,30,000 FOR RS.1,56,80,530/- - 47,04,159 --------------- 48,34,159 EDUCATION CESS @ 3% 1,45,025 --------------- 49,79,184 ========= WE NOTICE THAT THE TAX EFFECT IS LESS THAN THE PRES CRIBED MONETARY LIMIT OF RS.50.00 LAKHS UNDER THIS COMPUTATION ALSO . HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE T RIBUNAL. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE MISCEL LANEOUS PETITION FILED BY THE REVENUE. MP NO.117/BANG/2020 VINOD M SHERLEKAR, MANGALORE PAGE 5 OF 5 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JUNE, 2021 SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 25 TH JUNE, 2021. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.