The ACIT, Central Circle-1, Baroda V. M/S Chetan Builders, Baroda

MA 273/AHD/2009

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4337 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 1998-1999
• Appeal Filed On: 13-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOVIND SINGHAL
• Assessee Lawyers: J P SHAH
• Keywords: Unexplained cash credit; Question of law; Tax effect
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' (BEFORE S/SHRI I S VERMA AND N S SAINI) MISCELLANEOUS APPLICATION NO.273/AHD/2009 ARISING OUT OF ITA NO.788/AHD/2002 (ASSESSMENT YEAR:- 1998-99) THE ASSISTANT COMMISSIONER OF INCOME- TAX, CIRCLE-5, BARODA V/S M/S CHETAN BUILDERS, 100, K P SHOPPING CENTRE, KARELIBAUG, BARODA [APPLICANT] [RESPONDENT] APPLICANT BY :- SHRI GOVIND SINGHAL, SR. DR RESPONDENT BY:- SHRI J P SHAH O R D E R PER N S SAINI (ACCOUNTANT MEMBER: THIS IS A MISCELLANEOUS APPLICATION FILED BY THE REVENUE AGAINST THE ORDER OF THE TRIBUNAL DATED 09-03-2007 PASSED IN ITA NO.788/AHD/2002. 2 IN THIS MISCELLANEOUS APPLICATION THE GRIEVANCE O F THE REVENUE IS THAT THE APPEAL OF THE REVENUE WAS DISMISSED BY THE TRIBUNAL ON THE GROUND THAT THE TAX EFFECT IN THE APPEAL OF THE REVENUE WAS BELOW RS.2 LACS FOLLOWING THE CBDT INSTRUCTION NO.2 705 DATED 24- 10-2005. THE REVENUE IN THE MISCELLANEOUS APPLICATI ON HAS STATED THAT IN THIS APPEAL THE AO HAS GIVEN A FINDING THAT THE CASH CREDITS OF RS.3,16,500/- SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT WERE BOGUS, AS THE CONDITIONS LAID DOWN BY THE HON'BLE S UPREME COURT IN VARIOUS DECISIONS, U/S 68 OF THE ACT, WERE NOT FULF ILLED. CONSEQUENT TO THIS, THE INTEREST OF RS.30,512/- PAID BY THE AS SESSEE TO THE CASH CREDITORS WAS ALSO DISALLOWED. THIS INVOLVES A SUBS TANTIAL QUESTION OF LAW AND IS COVERED BY THE EXCEPTIONS TO THE INST RUCTIONS OF THE CBDT FOR NOT FILING APPEAL IN CASE WHERE THE TAX EF FECT IS BELOW RS.2 LACS. HENCE THERE IS A MISTAKE IN THE ORDER PASSED BY THE TRIBUNAL DATED 09-03-2007 WHICH IS RECTIFIABLE U/S 254(2) OF THE ACT. HENCE IT 2 2 IS PRAYED THAT THE ORDER DATED 09-03-2007 BE RECALL ED AND THE APPEAL OF THE REVENUE BE DECIDED ON MERITS. 3 THE LEARNED AR OF THE ASSESSEE OPPOSING THE MISCE LLANEOUS APPLICATION OF THE REVENUE, HAS SUBMITTED THAT THIS IS A CASE OF ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT S WHICH WAS DELETED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). THEREFORE ON DELETION OF UNEXPLAINED CASH CREDITS B Y THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), THERE CANNOT BE ANY QUESTION OF LAW, NOT TO SAY, ANY SUBSTANTIAL QUESTI ON OF LAW. HENCE, THE MISCELLANEOUS APPLICATION BY THE REVENUE MAY BE DISMISSED. 4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABL E ON RECORD. IN THE INSTANT CASE THE TRIBUNAL DISMISSED THE APPEAL OF T HE REVENUE ON LOW TAX EFFECT FOLLOWING THE CBDT INSTRUCTION NO.27 05 DATED 24-10- 2005. THE REVENUES GRIEVANCE BY THIS MISCELLANEOUS APPLICATION IS THAT AS A SUBSTANTIAL QUESTION OF LAW WAS INVOLVED IN THIS APPEAL OF THE REVENUE AND THEREFORE THE TRIBUNAL WAS NOT JUST IFIED IN NOT ADMITTING THE APPEAL OF THE REVENUE ON THE GROUND O F TAX EFFECT. THE LEARNED ASSESSING OFFICER HAD HELD THAT THE LOAN OF RS.3,16,500/- SHOWN BY THE ASSESSEE WAS BOGUS AND THEREFORE MADE ADDITION OF THE SAME TO THE INCOME OF THE ASSESSEE AND ALSO DIS ALLOWED INTEREST PAYMENT OF RS.30,512/- THEREON. THE CONTENTION OF T HE REVENUE IS THAT THUS THE ISSUE INVOLVED IN THE REVENUES APPEA L IS A SUBSTANTIAL QUESTION OF LAW, THEREFORE, THE APPEAL OF THE REVEN UE CANNOT BE DISMISSED ON THE GROUND OF LOW TAX EFFECT UNDER CBD T INSTRUCTION NO.2705 DATED 24-10-2005 AS IN THAT CASE THE APPEAL OF THE REVENUE WILL FALL UNDER THE EXCEPTIONS PROVIDED IN THE SAID INSTRUCTION. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS VEHEMENTLY OPPOSED THE MISCELLANEOUS APPLICATIO N OF THE REVENUE SAYING THAT THE APPEAL OF THE REVENUE INVOL VES NO QUESTION OF LAW LEAVE ALONE ANY SUBSTANTIAL QUESTION OF LAW AND THERE IS NO 3 3 MISTAKE IN THE ORDER OF THE TRIBUNAL IN DISMISSING THE APPEAL OF THE REVENUE ON LOW TAX EFFECT IN VIEW OF THE CBDT INSTR UCTION NO.2705 DATED 24-10-2005. WE FIND THAT THE LEARNED ASSESSIN G OFFICER HAS HELD THE LOAN SHOWN BY THE ASSESSEE TO BE BOGUS AND THEREFORE DISALLOWED THE INTEREST PAYMENT BY TREATING THE LOA N AS UNEXPLAINED CASH CREDIT AND THEREBY MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE. THIS IS PURELY A FACTUAL DECISION AND INV OLVES NO QUESTION OF LAW. FURTHER, THE LEARNED DEPARTMENTAL REPRESENT ATIVE COULD NOT SHOW HOW THERE IS SUBSTANTIAL QUESTION OF LAW INVOL VED IN THE APPEAL OF THE REVENUE. THEREFORE, WE FIND NO MERIT IN THE MISCELLANEOUS APPLICATION AND THEREFORE THE SAME IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON 22-02- 2010 SD/- SD/- ( I S VERMA ) JUDICIAL MEMBER ( N S SAINI ) ACCOUNTANT MEMBER DATE : 22-02-2010 COPY OF THE ORDER FORWARDED TO : 1. M/S CHETAN BUILDERS, 100, K P SHOPPING CENTRE, K ARELIBAUG, BARODA 2. THE ACIT, CIRCLE-5, BARODA 3. CIT CONCERNED 4. CIT(A)-V, BARODA 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD