ACIT, Circle-1,, v. Chander Prakash Jain,,

ITA 1059/DEL/2006 | 1992-1993
Pronouncement Date: 28-12-2010 | Result: Dismissed

Appeal Details

RSA Number 105920114 RSA 2006
Assessee PAN AANPJ1153G
Bench Delhi
Appeal Number ITA 1059/DEL/2006
Duration Of Justice 4 year(s) 8 month(s) 29 day(s)
Appellant ACIT, Circle-1,,
Respondent Chander Prakash Jain,,
Appeal Type Income Tax Appeal
Pronouncement Date 28-12-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 28-12-2010
Date Of Final Hearing 28-12-2010
Next Hearing Date 28-12-2010
Assessment Year 1992-1993
Appeal Filed On 30-03-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI K.D. RANJAN ITA NO. 707/DEL/06 ASSTT. YR: 1992-93 CHANDER PRAKASH JAIN VS. ACIT MEERUT CIRCLE-1 195 POLICE STREET MEERUT. MEERUT CANTT. PAN NO. AANPJ1153G ITA NO. 1059/DEL/06 ASSTT. YR: 1992-93 ACIT MEERUT CIRCLE-1 VS. CHANDER PRAKASH JAIN MEERUT 195 POLICE STREET MEERUT CANTT. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI PRASHANT JAIN ADV. REVENUE BY : MS. MONA MOHANTY SR. DR O R D E R PER R.P. TOLANI J.M : THESE ARE CROSS APPEALS ONE BY THE ASSESSEE AND TH E OTHER BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 17-1-200 6 RELATING TO A.Y. 1992- 93. ASSESSEE IS IN APPEAL AGAINST THE RETENTION OF INTEREST U/S 220(2) AND REVENUE IS IN APPEAL AGAINST THE DELETION OF INTERE ST U/S 234A AND 234B OF THE I.T. ACT. 2. CONTROVERSY IN QUESTION BELONGS TO CHARGEABILITY OF INTEREST U/S 234A 234B & 220(2) IN RESPECT OF LONG TERM CAPITAL GAIN S ON SALE OF 1/4 TH ITA 707 & 1059/DEL/06 CHANDER PRAKASH JAIN 2 CO-OWNERSHIP PROPERTY. ASSESSEE FILED A RETURN OF INCOME CLAIMING CAPITAL GAINS TO BE TAXABLE IN THE ASSESSMENT YEAR 1999-200 0 WHEN THE CONVEYANCE DEED WAS EXECUTED. AO HOWEVER HELD THAT THE CAPIT AL GAINS WERE LIABLE TO TAX IN THE IMPUGNED ASSESSMENT YEAR 1992-93 ON THE BASIS OF CONSTRUCTIVE OWNERSHIP RELYING ON HONBLE SUPREME COURT JUDGMEN T IN THE CASE OF CIT VS. PODAR CEMENT PVT. LTD. & OTHERS 226 ITR 625; 92 TAXATION 542. CONSEQUENT INTEREST WAS ALSO CHARGED. 2.1. MATTER IN THE CASE OF ONE OF THE CO-OWNERS SMT . PUSHPA DEVI JAIN & OTHERS WENT UP TO THE ITAT AND THE ITAT DELHI BENC H D VIDE ITS ORDER DATED 28-12-2004 REPORTED IN 93 ITD 289(DEL.) DEC IDED ISSUE IN FAVOUR OF THE REVENUE AS UNDER: IN VIEW OF THE ABOVE WE ARE UNABLE TO UPHOLD THE FINDINGS OF THE LD. CIT(A) AND AFTER SETTING ASIDE THE SAME WE HOLD THAT THE TRANSFER OF THE CAPITAL ASSET I.E. BUNGALOW NO. 21 0-B WEST END ROAD MEERUT TOOK PLACE BY VIRTUE AND UNDER THE AG REEMENT DATED 7-9-1991 IN THE FINANCIAL YEAR 1991-92 (ASSE SSMENT YEAR 1992-93) AND AS SUCH THE ASSESSING OFFICER WAS FUL LY JUSTIFIED IN LEVYING THE CAPITAL GAIN IN ASSESSMENT YEAR 1992 -93. THE ASSESSING OFFICER IS DIRECTED TO COMPUTE CAPITAL GA IN ACCORDINGLY. 2.2. CONSEQUENT TO ITAT JUDGMENT THE TAXABILITY OF CAPITAL GAINS IS CONFIRMED IN THE YEAR IN QUESTION. AGAINST LEVY OF INTEREST U/S 234A & 234B BY AO ASSESSEE PREFERRED FIRST APPEAL WHERE CIT(A ) DELETED THE ADDITION U/S 234A &B 234B RELYING ON HONBLE SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. RANCHI CLUB 247 ITR 209 HOLDING THAT T HERE WAS NO SPECIFIC DIRECTION GIVEN BY AO TO CHARGE INTEREST U/S 234A & B. AGGRIEVED REVENUE IS IN APPEAL BEFORE US. ITA 707 & 1059/DEL/06 CHANDER PRAKASH JAIN 3 2.3. QUA INTEREST U/S 220(2) CIT(A) CONFIRMED THE LEVY OF INTEREST U/S 220(2). AGGRIEVED ASSESSEE IS IN APPEAL. 3. LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUT SET CONTENDS THAT REVENUES APPEAL IS NOT MAINTAINABLE INASMUCH AS CB DT HAS GIVEN BINDING DIRECTIONS ON DEPARTMENT THAT NO REVENUE APPEAL SHA LL BE FILED IN A CASE WHICH INVOLVES TAX REVENUE LESS THAN RS. 2 LACS. TH IS HAS BEEN SPECIFICALLY CLARIFIED THAT TAX EFFECT WILL INCLUDE ONLY THE ELE MENT TAX AND NOT INTEREST. THE IMPUGNED APPEAL OF THE DEPARTMENT IS AGAINST IN TEREST ONLY AND DOES NOT INVOLVE ANY TAX ELEMENT. THUS THE TAX EFFECT INVOL VED IN THE REVENUES APPEAL IN TERMS OF BOARDS CIRCULAR IS NIL. 3.1. IT IS SUBMITTED THAT TAX DOES NOT INCLUDE INTE REST AS HELD IN THE CASES OF HARSHAD SHANTI LAL MEHTA VS. CUSTODIAN & OTHERS 231 ITR 871. IN CIT VS. CAMCO COLOR CO. (2002) 254 ITR 565 (BOM.) IT HAS B EEN HELD THAT CIRCULAR PRESCRIBING MONETARY LIMITS IS BINDING ON REVENUE. 3.2. FURTHER IN THE CASE OF CIT VS. RAJENDRA PRASAD SHARMA 2007 (10) MTC 814 (ALL) IT HAS BEEN HELD THAT IN VIEW OF BOA RD CIRCULAR APPEAL SHOULD NOT HAVE BEEN FILED. HE SUBMITTED THAT THE C ASE OF THE ASSESSEE IS IN ACCORDANCE WITH THE BINDING PRECEDENTS OF HONBLE A LLAHABAD HIGH COURT IN THE CASE OF BULAND MOTORS & LAND FINANCE P. LTD. 24 7 ITR 701 ; AND THAT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. N.D. G EORGE 231 ITR 504 HOLDING AS UNDER: IN OUR OPINION THE ABOVE DECISION SQUARELY APPLY T O THE FACTS OF THE PRESENT CASE AS ADMITTEDLY THE INCOME ASSESSED FOR THE ASSESSMENT YEAR 1989-90 WAS A LOSS. HENCE THERE WAS NO LIABILITY OF THE ASSESSEE TO PAY ADVANCE TAX ON THE BASIS OF HIS ESTIMAT4E OF HIS CURRENT INCOME FOR THE ASSESSMENT YEAR 1990- 91. MOREOVER THERE WAS NO ORDER OF THE ASSESSING O FFICER ITA 707 & 1059/DEL/06 CHANDER PRAKASH JAIN 4 UNDER SECTION 210(3). HENCE NO INTEREST WAS PAYABL E UNDER SECTION 234B. 3.3. IT IS PLEADED THAT APPEAL FILED BY THE REVENU E IS THUS CONTRARY TO INSTRUCTION NO. 1979 DATED 27-3-2000 AS REVISED BY INSTRUCTION NO. 2 OF 2005 DATED 24-10-2005 ISSUED BY THE CBDT RAISING THE MON ETARY LIMIT OF TAX EFFECT OF RS. 2 00 000/- FOR FILING APPEALS BEFORE THE ITAT. THE SAME HAS FURTHER BEEN REITERATED BY INSTRUCTION NO. 5 OF 200 8 DATED 15.5.2008. THE HONBLE SUPREME COURT IN 267 ITR 272 HAS HELD THAT IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMENT OR FILE AN APPEAL CO NTRARY TO THE CIRCULARS OF THE BOARD. IN (2007) 13 SCC 154 THE HONBLE SUPREME COURT HAS HELD THAT CENTRAL GOVT. CANNOT IN ABSENCE OF STATUTORY PROVIS IONS ACT BEYOND ITS PROFESSED POLICY. 3.4. LEARNED COUNSEL PLEADS THAT TAX EFFECT IN THE APPEAL FILED BY THE REVENUE IS NIL AND NOT FALLING IN ANY EXCEPTIONS . THE DISPUTE RELATES TO CHARGING OF INTEREST U/S 234A AND 234B; THE INTERES T IS EXCLUDED FROM THE EXPRESSION TAX EFFECT. THUS APPEAL FILED BY THE R EVENUE IS CONTRARY TO INSTRUCTIONS OF BOARD AND IS NOT MAINTAINABLE. 4. THE LEARNED DR THOUGH AGREED THAT TAX EFFECT FOR THE PURPOSE OF FILING REVENUES APPEAL HAS BEEN SPECIFICALLY PRESCRIBED TO INCLUDE ONLY TAX ELEMENT AND NOT THE INTEREST HOWEVER IT IS CONTEN DED THAT REVENUES APPEAL IS MAINTAINABLE AS TOTAL DEMAND IS ABOVE RS. 2 LACS INVOLVING QUESTION OF LAW. IT IS FURTHER PLEADED THAT HONBLE SUPREME CO URTS DECISION IN THE CASE OF KALYAN KUMAR RAI VS. CIT 191 ITR 634 HAS BEEN RE PEATEDLY FOLLOWED BY VARIOUS BENCHES OF THE ITAT FOR THE PROPOSITION THA T ITNS 150 IS PART OF THE ASSESSMENT ORDER THERE IS SPECIFIC DIRECTION TO LE VY INTEREST. FURTHER IN THE CASE OF CIT VS. ANJUM M.H. GHASWALA & OTHERS 252 IT R 1 (SC) THE ITA 707 & 1059/DEL/06 CHANDER PRAKASH JAIN 5 HONBLE SUPREME COURT HAS HELD THAT INTEREST U/S 2 34A & 234B IS MECHANICAL IN NATURE. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE GONE TH ROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. QUA REVENUES APPEAL IN OUR VIEW THE SAME IS HIT BY THE BOARDS CIRCULAR PRESCRIBING MONETARY LI MITS FOR PREFERRING REVENUES APPEAL. IT HAS BEEN CLEARLY PRESCRIBED TH AT TAX EFFECT OF RS. 2 LACS WILL INCLUDE ONLY THE ELEMENT OF TAX CHARGED AND NO T THE INTEREST. IN VIEW THEREOF WE ARE INCLINED TO HOLD THAT REVENUES APP EAL IS NOT MAINTAINABLE HENCE THE SAME STANDS DISMISSED. 5.1. APROPOS ASSESSEES APPEAL WE SEE NO INFIRMITY IN THE ORDER OF CIT(A) INASMUCH AS CIT(A) ANALYZING HONBLE SUPREME COURT S JUDGMENT IN THE CASE OF VIKRANT TYRES LTD. 247 ITR 821 AND SECTION 3 OF THE VALIDATION ACT HAS HELD THAT BY INCORPORATION OF SECTION 3 OF THE VALIDATION ACT THE ORIGINAL DEMAND NOTICE STANDS RESTORED AND A FRESH NOTICE WA S NOT NECESSARY. IN VIEW THEREOF WE UPHOLD THE ORDER OF CIT(A) ON THE ISSUE OF LEVY OF INTEREST U/S 220(2). ASSESSEES APPEAL IS DISMISSED. 6. IN THE RESULT BOTH THE APPEALS FILED BY THE AS SESSEE AS WELL AS THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28-12-2010. SD/- SD/- (K.D. RANJAN ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28-12-2010. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR