The ACIT, Ahmedabad Circle -3, Ahmedabad v. Tushti Securities Pvt. Ltd, Ahmedabad

ITA 1121/AHD/2009 | 1997-1998
Pronouncement Date: 17-03-2011 | Result: Dismissed

Appeal Details

RSA Number 112120514 RSA 2009
Assessee PAN AAACT7451R
Bench Ahmedabad
Appeal Number ITA 1121/AHD/2009
Duration Of Justice 1 year(s) 11 month(s) 3 day(s)
Appellant The ACIT, Ahmedabad Circle -3, Ahmedabad
Respondent Tushti Securities Pvt. Ltd, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 17-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 17-03-2011
Date Of Final Hearing 16-03-2011
Next Hearing Date 16-03-2011
Assessment Year 1997-1998
Appeal Filed On 13-04-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : AHMEDABAD (BEFORE HONBLE SHRI G.D. AGRAWAL V.P. AND HON'B LE SHRI T.K. SHARMA J.M .) I.T.A. NO. 1121/AHD./2009 ASSESSMENT YEAR : 1997-1998 THE ACIT CIRCLE-3 AHMEDABAD VS.- M/S. TU SHTI SECURITIES (P) LTD. AHMEDABAD (PAN : AAACT 7451R) (APPELLANT) (R ESPONDENT) APPELLANT BY : SHRI R.K.DHANESTA D.R. RESPONDENT BY : SHRI S.N.SOPARKAR A .R. O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 19-01-2009 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-VII AHMEDABAD FOR THE ASSESSMENT YEAR 1997-98 ON THE FOLLOWING GROUNDS :- (1) THE CIT(A) ERRED IN LAW AND ON FACTS IN DELETING AD DITION OF RS.1 79 161/- ON ACCOUNT OF JOBBING LOSS. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER SINCE THE ASSESSEE FAILED TO PROVE THAT JOBBING TRA NSACTIONS UNDER REFERENCE WERE CARRIED OUT TO GUARD AGAINST LOSS WH ICH MAY ARISE IN THE ORDINARY COURSE OF BUSINESS. 2. THE LD. DEPARTMENTAL REPRESENTATIVE WAS ASKED WH Y THE APPEAL OF THE REVENUE SHOULD NOT BE TREATED AS UN-ADMITTED IN VIEW OF CIR CULAR F.NO.279/MISC.-64/05-ITJ DATED 24 TH OCTOBER 2005 AND THE DECISION OF THE HONBLE BOMBA Y HIGH COURT IN THE CASE OF CIT VS. CAMCO COLOUR CO. [254 ITR 565 (BOM)] AND THE HONBL E APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORPORATION LTD. [267 ITR 272 (SC)]. THE LD. DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE HON BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RANI PALIWAL VS. C.I.T. [268 I.T.R. 220 ] AND ALLAHABAD HIGH COURT IN THE CASE OF JUGAL KISHORE ARORA VS. DCIT [269 I.T.R. 133] HAVE TAKEN THE VIEW THAT ONCE AN APPEAL IS FILED BY THE REVENUE THE TRIBUNAL SHOULD DISPOSE O F THE APPEAL ON MERITS AND THE ASSESSEE CANNOT RAISE THE OBJECTION AGAINST THE MAINTAINABIL ITY OF SUCH APPEAL. 2 3. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF TH E LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE CBDT VIDE INSTRUCTION NO.2/2005 DATED 24 TH OCTOBER 2005 ISSUES GUIDELINES TO THE REVENUE AUT HORITIES WITH REGARD TO FILING OF APPEAL BEFORE THE TRIBUNAL HIGH COURT AND SUPREME COURT. FROM THE ABOVE INSTRUCTION IT IS EVIDENT THAT SINCE 1987 THE CBDT IS INSTRUCTING IT S OFFICERS NOT TO FILE THE APPEAL WHERE THE TAX EFFECT IS BELOW CERTAIN MONETARY LIMITS. VIDE I NSTRUCTION NO. 1903 DATED 28 TH OCTOBER 1992 THE MONETARY LIMIT WAS REVISED UPWARD AND THE OFFICERS WERE DIRECTED NOT TO FILE THE APPEAL BEFORE THE INCOME-TAX APPELLATE TRIBUNAL WHE RE THE TAX EFFECT WAS BELOW RS.25 000/-. THE ABOVE MONETARY LIMIT WAS FURTHER REVISED UPWARD BY INSTRUCTION NO.1979 DATED 27 TH MARCH 2000 AND THE OFFICERS WERE DIRECTED NOT TO F ILE THE APPEAL TO ITAT WHERE THE TAX EFFECT IS BELOW RS.1 LAC. THEREAFTER IN PARTIAL MODIFICA TION OF THE ABOVE INSTRUCTION THE BOARD VIDE INSTRUCTION NO.2/2005 DATED 24.10.2005 HAS FURTHER RAISED THE ABOVE MONETARY LIMIT TO RS. 2 LAKHS WITH THE SAME DIRECTIONS. THUS THE CBDT SIN CE 1987 HAS NOT ONLY TAKEN A CONSISTENT APPROACH OF INSTRUCTING ITS OFFICERS FOR NOT FILING THE APPEAL WHERE THE TAX EFFECT IS BELOW THE MONETARY LIMIT BUT SUCH MONETARY LIMIT IS ALSO REV ISED UPWARD FROM TIME TO TIME. THE CIRCULAR UNDER INSTRUCTION NO.1979 DATED 27.3.2006 WAS CONSIDERED BY THE BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. (SUPRA) AND T HEIR LORDSHIPS HELD AT PAGE 568 AS UNDER:- IT APPEARS THAT DESPITE THE ABOVE CIRCULAR THE RE VENUE HAS CHOSEN TO FILE THE PRESENT APPEAL KNOWING FULLY WELL THAT THE CORRIDOR S OF THE COURTS ARE FLOODED WITH PENDING LITIGATIONS. THE PRESENTATION OF THIS APPEA L IS QUITE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRCULAR WHICH IS BINDING ON THE REVENUE. IN THE ABOVE VIEW OF THE MATTER CONSIDERING THE IN STRUCTIONS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES WE ARE SATISFIED THAT THE BO ARD HAS TAKEN A POLICY DECISION NOT TO FILE APPEAL IN A TYPE OF CASE IN HAND AND TH E SAME IS FINDING ON THE REVENUE (APPELLANT HEREIN). IN THE RESULT WE DISMISS THIS APPEAL ON THIS COUNT IN LIMINE WITH NO ORDER AS TO COSTS. 4. THE LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED U PON THE CONTRARY DECISIONS GIVEN BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RANI PALIWAL (SUPRA) AND ALLAHABAD HIGH COURT IN THE CASE OF JUGAL KISHORE ARORA (SUPR A). HOWEVER WE FIND THAT RECENTLY THE APEX COURT HAS CONSIDERED THE EFFECT OF CIRCULAR IS SUED BY THE CBDT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORPORATION LTD. 267 ITR 272. THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APEX COURT WI TH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THE FOLLOWING PRINCIPLES AT PAGE 277 OF THE REPORTS :- THE PRINCIPLES LAID DOWN BY ALL THESE DECISIONS AR E 3 (1) ALTHOUGH A CIRCULAR IS NOT BINDING ON A COURT O R AN ASSESSEE IT IS NOT OPEN TO THE REVENUE TO RAISE A CONTENTION THAT IS CONTRA RY TO A BINDING CIRCULAR BY THE BOARD. WHEN A CIRCULAR REMAINS IN OPERATION TH E REVENUE IS BOUND BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID NOR THAT IT IS CONTRARY TO THE TERMS OF THE STATUTE. (2) DESPITE THE DECISION OF THIS COURT THE DEPARTM ENT CANNOT BE PERMITTED TO TAKE A STAND CONTRARY TO THE INSTRUCTIONS ISSUED BY THE BOARD. (3) A SHOW CAUSE NOTICE AND DEMAND CONTRARY TO EXIS TING CIRCULARS OF THE BOARD ARE AB INITIO BAD. (4) IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN AR GUMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULARS. (EMPHASIS SUPPLIED) FROM THE ABOVE IT IS EVIDENT THAT THE HONBLE APE X COURT HAS LAID DOWN THAT IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMENT OR FILE AN APPEAL CONTRARY TO THE CIRCULAR. THE APPEAL UNDER CONSIDERATION HAS CERTAINLY BEEN FILED CONTRARY TO THE CIRCULAR ISSUED BY THE CBDT VIDE CIRCULAR F. NO. 279/MISC-64/05-ITJ DATED 24 TH OCTOBER 2005. THEREFORE THE ABOVE DECISION OF THE HONBLE APEX COURT WOULD BE S QUARELY APPLICABLE. EVEN OTHERWISE THE REVENUE HAS BEEN TAKING A CONSISTENT APPROACH SINCE 1987 NOT TO FILE APPEAL WHERE THE REVENUE EFFECT IS BELOW CERTAIN MONETARY LIMIT TO R EDUCE THE LITIGATION PENDING BEFORE THE TRIBUNAL AND THE COURTS. IF THE APPEALS CONTRARY TO SUCH CIRCULAR ARE ADMITTED IT WOULD FRUSTRATE THE PURPOSE OF ISSUING SUCH INSTRUCTIONS. IN THE ABOVE CIRCUMSTANCES WE RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF INDIAN OIL CORPORATION LTD. (SUPRA) AND BOMBAY HIGH COURT IN THE CASE OF CAMCO COLOUR CO. (SUPRA) HOLD THAT THE REVENUE SHOULD NOT HAVE FILED THE APPEAL CONTRARY T O THE CIRCULAR ISSUED BY THE CBDT. ACCORDINGLY THE SAME IS NOT ADMITTED AND BEING DIS MISSED IN LIMINE. 5. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER PRONOUNCED IN THE CO URT ON 17.03.2011 SD/- SD/- (G.D.AGRAWAL) (T.K. SHARMA) VICE PRESIDENT JUDICIAL MEMBER DATED : 17 / 03 / 2011 4 COPY OF THE ORDER IS FORWARDED TO:- (1) THE ASSESSEE (2) THE DEPARTMENT. (3) CIT (A.) CONCERNED. (4) CIT CONCERNED. (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AH MEDABAD. TALUKDAR/ SR. P.S.