ACIT, Kota V. SHIV EDIBLES LTD., Kota

MA 95/JPR/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 5682 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 13-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S NEHRA
• Assessee Lawyers: REHMAN ADV DH RKJ
• Keywords: Tax effect

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M M.A. NO. 95/JP/2017 (ARISING OUT OF ITA NO. 321/JP/2015) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 A.C.I.T., CIRCLE-1, KOTA. CUKE VS. M/S SHIV EDIBLES LTD., 237, TALWANDI, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAICS 0274 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI A.S. NEHRA (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA & SHRI REHMAN (ADV.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/01/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 16/01/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS MISC. APPLICATION HAS BEEN FILED BY THE REVENU E ON 01/06/2017. THE ITA NO. 321/JP/2015 FILED BY THE REV ENUE WAS DISMISSED BY THE ITAT VIDE ITS ORDER DATED 02/03/201 7 ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF THE CBDT CIRCULAR NO. 21 OF 2015 DATED 10/12/2015. 2. THE LD DR RELIED ON THE SUBMISSIONS MADE IN THE M ISC. APPLICATION. WHILE THE LD. AR OF THE ASSESSEE HAS S UBMITTED AS UNDER: MA 95/JP/2017_ ACIT VS SHIV EDIBLES 2 1. IN THE MA FILED BY THE DEPARTMENT, IT IS STATED THAT THE ID. CIT(A) DELETED THE ADDITIONS OF RS.29,71,662/- ON WHICH, T HE TAX @ OF 30% INCLUDING EDUCATION CESS & SHEC @ OF 3% AND SURCHAR GE @ 10%, CAME TO RS.10,10,068/-. ACCORDINGLY, THE TAX ON THE DISPUTED ADDITIONS WAS MORE THAN RS.10 LAKHS AND HENCE THE H ONORABLE ITAT HAS MISTAKENLY RELIED UPON THE CBDT CIRCULAR. IN THIS CONNECTION IT IS SUBMITTED AS UNDER: 2. AT THE OUTSET IT IS SUBMITTED THAT THE ABOVE APP EAL IS FILED BY THE DEPARTMENT IS COVERED BY THE CBDT CIRCULAR BEING A LOW TAX EFFECT, AS PER THE FOLLOWING CALCULATION: PART ICULARS AMOUNT (IN RS.) TOTAL ADDITIONS: I. TRADING ADDITION 24,75,535/ - II. REPAIR WORK EXPENSES 2,58,966/ - III. ADDITION U/S 40(A)(IA) 2,37,161/ - TOTAL ADDITIONS 29,71,662/ - TAX ON TOTAL ADDITIONS @ 30% 8,91,499/ - SURCHARGE @ 10% 89,150/ - 9,80, 649/ - EC & SHEC @ 3% 29,419/ - TOTAL TAX 10,10,068/ - 3. AS PER THE CBDT CIRCULAR, THE DEPARTMENT SHOULD NOT FILE AN APPEAL WHERE THE TAX EFFECT INVOLVED IS BELOW RS.10 LAKHS. THEREFORE, THE ONLY QUESTION TO BE DECIDED IS WHETHER THE TAX EFFECT IN CLUDES INCOME TAX ONLY OR INCLUDES SURCHARGE AND EDUCATION CESS ALSO. IN THIS CASE, THE TAX EFFECT INCLUDING THE SAME STANDS AT RS.10,10,068/-. HOWEVER, AT THE SAME TIME, EXCLUDING THE SURCHARGE AND CESS, THE AM OUNT OF INCOME TAX ONLY AT THE RATE OF 30% STANDS AT RS.8,91,499/- WHICH IS FAR BELOW RS.10 LAKHS. 4. COVERED ISSUE: THIS CONTROVERSY IS ALREADY COVER ED AND THIS HONBLE BENCH HAS TAKEN A VIEW THAT FOR THE PURPOSES OF COM PUTING TAX EFFECT, THE AMOUNT OF EDUCATION CESS SHOULD NOT BE CONSIDER ED. MA 95/JP/2017_ ACIT VS SHIV EDIBLES 3 4.1 IN THE CASE OF ACIT V/S MOHAMMAD MIYAN IN ITA N O. 171/JP/2012 VIDE ORDER DATED 25.04.2017 (DPB 1-4), IT WAS CONTENDED THAT BEFORE INCLUDING THE AMOUNT OF EC & SHEC OF RS. 19,733/-, THE TAX CAME TO RS.9,86,629/- WHICH WAS BELOW THE LIMIT. ACCEPTING THE CONTENTION, THE HONBLE JAIPUR ITAT HELD THAT 6. THE REVENUE HAS NOT GIVEN ANY OTHER COMPUTATIO N, THEREFORE IN VIEW OF THIS COMPUTATION, WE DISMISS THE APPEAL OF THE REVENUE AS NOT MAINTAINABLE AS EVEN IF THE SURCHARGE IS INC LUDED THEN ALSO THE TAX EFFECT REMAINS LESSER THAN THE PRESCRIBED L IMIT I.E. RS. 9,86,629/-. 5. OTHER DIRECT DECISIONS: 5.1 IN THE CASES OF DCIT V/S DOME BELL ELECTRONICS INDIA LTD. IN ITA NO. 2480/MUM/2012 VID E ORDER DATED 22.07.2016 (DPB 5-9) AND DCIT V/S SHRI YUVRAJ SINGH IN ITA NO. 408/LKW/2011 VIDE ORDER DATED 23.12.2013 (DPB 10-13 ), IT HAS BEEN HELD THAT FOR THE PURPOSE OF COMPUTING TAX EFFECT F OR THE PURPOSES OF THE CIRCULAR, SHOULD NOT INCLUDE THE SURCHARGE AND CESS. 5.2 ALSO THE HONBLE DELHI ITAT IN THE CASE OF ACIT V/S DALLAS FINANCE LTD. IN ITA NO. 3946/DEL/2010 VIDE THEIR ORDER DATED 07. 04.2017 AT PARA 7 (DPB 14-22), HELD THAT 7. SO, RESPECTFULLY FOLLOWING THE AFORESAID VIEW OF THE COORDINATE BENCH, WE DO NOT SEE MERIT IN THIS CONTE NTION OF THE ID. DR THAT THE SURCHARGE AND THE CESS IS A PART OF THE TAX. 5.3 IN THE CASES OF ACIT V/S R. VISWANATHAN IN ITA NO. 30/MDS/2011 AND ITO VS. P. PRASEN KUMAR IN ITA NO. 418/HYDERABAD/20 14 WHEREIN, IT HAS BEEN HELD THAT SURCHARGE AND EDUCATION CESS SHO ULD NOT BE INCLUDED WHILE CALCULATING THE TAX EFFECT. THIS CAS E HAS RECENTLY BEEN FOLLOWED IN ITO VS. M/S.SAROJBEN G. SHAH IN MA NO.8 9/AHD/2016 VIDE ORDER DATED 06/01/2017. MA 95/JP/2017_ ACIT VS SHIV EDIBLES 4 5.4 LATEST IN THE CASE OF ITO VS. LAMBA CELEBRATIO NS RESORT IN MA NO. 45/CHD./2016 DATED 19.05.2017, ITO VS. SHRI VISHWES HAR SAHAKARI PATPEDHI MARYADIT IN ITA NO. 3929/MUM./2016 DATED 1 9.04.2017, ITO VS. PATTEBOINA MAHESWARA RAO IN ITA NO. 29/VIZ./201 3 DATED 03.05.2017, ITO VS P.PRASEN KUMAR IN MA NO. 63/HYD. /2016 DATED 07.12.2016, ITO VS. SMT. PARULBEN JAYANTIBHAI PATEL IN 320/AHD/2014 VIDE ORDER DATED 12.04.2017 AND DCIT VS. M/S. TILAK NAGAR INDUSTRIES LTD IN ITA NO.2506/MUM/2015 VIDE ORDER DATED 31.05. 2017 5.5 RECENTLY IN ITO VS. SHRI K. VIVEKANANDAN IN M.P . NO.220/MDS/2016 VIDE ORDER/ DATED 15.03.2017, THE MA FILED BY THE D EPARTMENT HAS BEEN REJECTED AND THE CASE OF CI1 V. K. SRINIVASAN (1972) 83 ITR 346 WAS ALSO DISTINGUISHED. 5.6 ALSO KINDLY REFER DALMIA CEMENT (BHARAT) LTD. V /S CIT (2013) 263 CTR 0308 (DE) THOUGH RENDERED IN THE CONTEXT OF SEC. 43 B YET IS RELEVANT BECAUSE IT HAS HELD THAT TAX DOES NOT INCLUDE CESS AND SURCHARGE. THUS, THE TAX EFFECT HAVING BEEN BELOW RS.10 LAKHS , THE HONBLE ITAT HAS RIGHTLY HELD T THE MA OF THE DEPARTMENT WAS NOT MAINTAINABLE. 6. IN ANY CASE, IF THERE IS A CONTRARY VIEW, THE IS SUE BECOMES DEBATABLE WHEN RECTIFICATION IS PERMISSIBLE. OTHERWISE ALSO I T IS A CASE OF REVIEW WHICH IS NOT PERMISSIBLE WITHIN THE NARROW SCOPE OF THE POWERS CONFERRED UPON THE ITAT U/S 254(2) OF THE ACT. THE PRESENT MISCELLANEOUS APPLICATION FILED BY THE REVENUE, IS AN ATTEMPT TO PRAY FOR REVIEW UNDER THE GRAB OF RECTIFICATION. KINDLY REFER ITO V/S ITAT (1987) 168 ITR 0809 (RAJ) AND 82 ITR 50 (SC). ACCOR DINGLY THE APPEAL OF THE REVENUE KINDLY BE DISMISSED. THE LD AR OF THE ASSESSEE HAS RELIED ON THE FOLLOWING CASE LAWS: MA 95/JP/2017_ ACIT VS SHIV EDIBLES 5 (I) ITO VS. SHRI K. VIVEKANANDAN IN ITA NO. 1256/MD S/2012 VIDE ORDER DATED 15.03.2017. (II) ITO VS LAMBA CELEBRATIONS RESORT IN MA NO. 45/ CHD./2016 DATED 19.05.2017 (III) ITO VS SHRI VISHWESHAR SAHAKARI PATPEDHI MARY ADIT IN ITA NO. 3929/MUM./2016 DATED 19.04.2017 (IV) ITO VS PATTEBOINA MAHESWARA RAO IN ITA NO. 29/ VIZ./2013 DATED 03.05.2017 (V) ITO VS P.PRASEN KUMAR IN MA NO. 63/HYD./2016 DA TED 07.12.2016. 3. AFTER HEARING BOTH THE SIDES, THE BENCH FIND THA T THE TAX EFFECT INCLUDING THE SURCHARGE ALSO COME BELOW THE THRESHOL D LIMIT OF RS. 10.00 LACS. CONSIDERING THESE FACTS, THE BENCH FIND NO MERIT IN THIS M.A. OF THE REVENUE AND THE SAME IS HEREBY DISMISSED. 4. IN THE RESULT, THIS MISC. APPLICATION OF THE REV ENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/01/2018. SD/- SD/- FOT; IKY JKO HKKXPAN (VIJAY PAL RAO) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16 TH JANUARY, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE A.C.I.T., CIRCLE-1, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- M/S SHIV EDIBLES LTD., KOTA. 3. VK;DJ VK;QDR @ CIT MA 95/JP/2017_ ACIT VS SHIV EDIBLES 6 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (MA NO. 95/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR