The ACIT, Circle-5, Ahmedabad V. Palitana Sugar Mills Pvt. ltd., Ahmedabad

MA 19/AHD/2010

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8485 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 09-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Question of law; Tax effect

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , . ! ,'# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER MA NO.19/AHD/2010 A.Y.2003-04 ( ./ IN I.T.A. NO.43/AHD/2007 A.Y. 2003-04 ) THE ACIT CIRCLE-5 AHMEDABAD ! ! ! ! / VS. PALITANA SUGAR MILLS PVT.LTD. C-2, DIVYA APARTMENT NR.MITHAKHALI CARNALA NAVRANGPUR, AHMEDABAD & '# ./'( ./ PAN/GIR NO. : AAACP 9273 F ( &) / // / APPLICANT ) .. ( *+&)/ RESPONDENT ) &) , '/ APPLICANT BY : SHRI B.L.YADAV, SR.D.R. *+&) - , ' / RESPONDENT BY : SHRI UMAID SINGH BHATI !. - /#/ // / DATE OF HEARING : 8/6/12 0 1 - /# / DATE OF PRONOUNCEMENT : 15/6/12 '2/ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS MISCELLANEOUS PETITION FILED ON 9.2.2010 ARI SING FROM AN ORDER OF THE TRIBUNAL AS STATED IN THE NOMENCLATURE HEREI NABOVE DATED 4.8.2009. THE REVENUE HAS MENTIONED IN THIS MISCELLANEOUS PET ITION THAT ON THE GROUND OF NOTIONAL TAX EFFECT THE TRIBUNAL HAS WRON GLY DISMISSED THE APPEAL OF THE REVENUE AND IN THIS REGARD FOLLOWING PARAGRAPHS OF THE MISCELLANEOUS PETITION ARE HEREBY REFERRED BELOW:- MA NO.19/AHD/ 2010 (IN ITA NO.43/AHD/2007) THE ACIT VS. PALITANA SUGAR MILLS P.LTD. ASST.YEAR - 2003-04 - 2 - IN THIS CASE, THE HONBLE ITT A BENCH, AHMEDABAD HAS DISMISSED THE APPEAL OF REVENUE, FILED AGAINST THE ORDER OF THE C IT(A), RESTRICTING THE ADDITION MADE ON ACCOUNT OF LEGAL AND PROFESSIONAL EXPENSES FROM RS.37,54,803/- TO RS.22,51,199/- AND DELETING THE A DDITION MADE ON ACCOUNT OF DISALLOWANCE OF PRINTING AND STATIONERY EXPENSES OF RS.12,00,000/-. 2. THE HONBLE ITAT DISMISSED THE APPEAL OF REVENU E RELYING ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. MANGALAM RICINUS LTD. (2008) 174 TAXMAN 186 (DELHI), HOLDING THAT THE TAX EFFECT INVOLVED IN THIS CASE IS BELOW RS.2 LAKHS AND THERE FORE, THE APPEAL IS NOT MAINTAINABLE. THE HON ITAT HAS NOT DECIDED THE CA SE ON MERIT. 3. ON PERUSAL OF THE ORDER, IT IS SEEN THAT THE H ONBLE ITAT HAS ACCEPTED THE PLEA OF ASSESSEES COUNSEL THAT THE TA X EFFECT INVOLVED IN THIS CASE IS BELOW RS.2 LACS. THIS IS FACTUALLY IN CORRECT BECAUSE THE AMOUNT OF ADDITION INVOLVED IS RS.27,03,604/- AND T HE TAX EFFECT INVOLVED IS RS.9,93,574/-, WHICH IS A NOTIONAL TAX EFFECT, A S THE RETURNED AS WELL AS ASSESSED INCOME IS LOSS. IT IS THEREFORE, REQUE STED TO KINDLY TAKE-UP THE APPEAL AND DECIDE THE SAME ON MERITS. IT MAY B E POINTED OUT THAT, ON IDENTICAL ISSUE OF NOTIONAL TAX EFFECT, IN THE C ASE OF M/S.RELIANCE PETROPRODUCTS PVT.LTD. FOR A.Y.2005-06, THE HONBLE ITAT B BENCH, AHMEDABAD, VIDE ITS ORDER DATED 13.01.2010, IN MA N O.274/AHD/2009, HAS ADMITTED THE MA FILED BY THE DEPARTMENT AND HAS RECALLED ITS ORDER, DIRECTING THE REGISTRY TO REFIX THE MATTER. 4. THIS MISCELLANEOUS APPLICATION IS BEING FILED W ITH THE PRIOR APPROVAL OF THE CIT, AHMEDABAD-III, AHMEDABAD VIDE HIS LETTE R NO.HQ- TECH.III/260A/R-5/260A-301/09-10 DATED 11.12.2009. 2. WE HAVE HEARD BOTH THE SIDES. AT THE OUTSET, IT IS WORTH TO MENTION THAT THE RESPECTED GUJARAT HIGH COURT IN TAX APPEAL NO.99 OF 2010 FILED BY THE REVENUE DEPARTMENT TITLED AS CIT-III APPEL LANT VS. PALITANA SUGAR MILLS PVT.LTD. OPPONENT VIDE AN ORDER DATED 22.3.2011 HAS ADMITTED THE FOLLOWING QUESTION OF LAW:- WHETHER THE APPELLATE TRIBUNAL IS RIGHT IN LAW AND ON FACTS IN DISMISSING THE TAX APPEAL OF THE REVENUE ON THE GRO UND OF LOW TAX EFFECT, MA NO.19/AHD/ 2010 (IN ITA NO.43/AHD/2007) THE ACIT VS. PALITANA SUGAR MILLS P.LTD. ASST.YEAR - 2003-04 - 3 - THOUGH THE NOTIONAL TAX EFFECT EXCEEDED THE MONETAR Y LIMIT PRESCRIBED BY THE BOARD? 2.1. WE HAVE BEEN INFORMED THAT THE IMPUGNED ORDER OF TH E TRIBUNAL DATED 4.8.2009 (A.Y. 2003-04) WAS CHALLENGED BY THE REVENUE DEPARTMENT AND THE QUESTION OF LAW HAS NOW BEEN ADM ITTED WHICH PERTAINS TO THE QUESTION OF NOTIONAL TAX EFFECT FOR FILING OF REVENUES APPEAL. ONCE AN ISSUE HAS BEEN AGITATED BEFORE TH E HONBLE HIGH COURT AND THAT ISSUE HAS BEEN ADMITTED AS A SUBSTANTIAL Q UESTION OF LAW, THEN NATURALLY SUCH AN ISSUE IS A DEBATABLE ISSUE. DU E TO THIS REASON, IF REVENUE IS SEEKING RECTIFICATION OF THE DECISION OF THE TRIBUNAL ON THAT ISSUE U/S.254(2) OF IT ACT, THEN SUCH GRIEVANCE OF THE REVENUE IS NOT RECTIFIABLE BEING NOT A MISTAKE APPARENT ON THE PAR T OF THE TRIBUNAL. 2.2. THERE IS AN ANOTHER ASPECT WHICH WE HAVE CONSI DERED WHILE DECIDING THIS MISCELLANEOUS PETITION OF THE REVENUE THAT THE TRIBUNAL HAS TAKEN A CONSCIOUS DECISION BY ELABORATELY DISCUSSIN G THIS ISSUE IN THE IMPUGNED TRIBUNALS ORDER WHEREIN A DECISION OF HON BLE DELHI HIGH COURT WAS CITED, VIZ. CIT VS. MANGALAM RECINUS LTD. 174 TAXMAN 186 (DELHI) IS CITED. THE TRIBUNAL HAS ALSO CONSIDERE D A CBDT INSTRUCTION NO.2 OF 2005 DATED 24.10.2005. THE TRIBUNAL HAS D IRECTED THE REVENUE- DEPARTMENT AS FOLLOWS:- 6. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HO N'BLE HIGH COURT OF DELHI IN THE CASE OF MANGLAM RICINUS LTD. (SUPRA), WE HOLD THAT IN VIEW OF THE CBDT INSTRUCTION NO.2 OF 2 005 DATED 24.10.2005, THE REVENUE SHOULD NOT HAVE FILED THIS APPEAL BEFORE THE TRIBUNAL. THE HONBLE DELHI HIGH COURT IN THE CASE OF MANGLAM RICINUS LTD. (SUPRA) ALSO OBSERVED AS UNDER : MA NO.19/AHD/ 2010 (IN ITA NO.43/AHD/2007) THE ACIT VS. PALITANA SUGAR MILLS P.LTD. ASST.YEAR - 2003-04 - 4 - 9. WE MAKE IT CLEAR THAT IN CASE THE ISSUE ARISES IN THE SUCCEEDING YEARS AND HAS ANY TAX EFFECT, IT IS LEFT OPEN FOR CONSIDERATION. 3. FROM THE SIDE OF THE REVENUE, CERTAIN CBDT INSTR UCTIONS AND FEW ORDERS ARE CITED BUT THOSE ARE NOT APPLICABLE ON TH E PRESENT SITUATION WHERE THE TRIBUNAL HAS DISCUSSED THE RELEVANT GUIDE LINES OF THE CBDT AS ALSO AN ORDER OF THE HIGH COURT AND THEREAFTER FORM ED AN OPINION ON THE BASIS OF WHICH REVENUES APPEAL WAS DISMISSED. SUC H AN ORDER OF THE TRIBUNAL, CANNOT BE TREATED AS AN ERRONEOUS ORDER T HROUGH WHICH AN APPARENT MISTAKE COULD BE SAID TO BE COMMITTED. EV EN OTHERWISE, THE ISSUE OF NOTIONAL TAX EFFECT IS A CONTENTIOUS ISSUE , HENCE BEING CONTENTIOUS IN NATURE IS THEREFORE OUT OF THE AMBITS OF THE PRO VISIONS OF SECTION 254(2) OF IT ACT. ACCORDING TO US, THERE WAS NO APPARENT MISTAKE COMMITTED BY THE TRIBUNAL, HENCE THE MISCELLANEOUS PETITIONS OF THE REVENUE IS HEREBY DISMISSED. 4. IN THE RESULT, MISCELLANEOUS PETITION IS DISMISS ED. SD/- SD/- ( . ! ) ( ) '# ( A. MOHAN ALANKAMONY ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIA L MEMBER AHMEDABAD; DATED 15/ 06 /2012 3/..!, .!../ T.C. NAIR, SR. PS MA NO.19/AHD/ 2010 (IN ITA NO.43/AHD/2007) THE ACIT VS. PALITANA SUGAR MILLS P.LTD. ASST.YEAR - 2003-04 - 5 - '2 - *4 5'41 '2 - *4 5'41 '2 - *4 5'41 '2 - *4 5'41/ COPY OF THE ORDER FORWARDED TO : 1. &) / THE APPLICANT 2. *+&) / THE RESPONDENT 3. 6 / CONCERNED CIT 4. 6() / THE CIT(A)-XI, AHMEDABAD 5. 49: *! , , / DR, ITAT, AHMEDABAD 6. :; <. / GUARD FILE. '2! '2! '2! '2! / BY ORDER, +4 * //TRUE COPY// = == =/ // / ' ' ' ' ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DIRECT DICTATION ON COMPUTER8.6.12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 11.6.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S15.6.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15.6.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER