ACIT, New Delhi v. M/s. Designers Point (India) Pvt. Ltd., New Delhi

ITA 3632/DEL/2010 | 2005-2006
Pronouncement Date: 26-12-2011 | Result: Dismissed

Appeal Details

RSA Number 363220114 RSA 2010
Assessee PAN AAACD3045R
Bench Delhi
Appeal Number ITA 3632/DEL/2010
Duration Of Justice 1 year(s) 4 month(s) 27 day(s)
Appellant ACIT, New Delhi
Respondent M/s. Designers Point (India) Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 26-12-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 26-12-2011
Date Of Final Hearing 26-12-2011
Next Hearing Date 26-12-2011
Assessment Year 2005-2006
Appeal Filed On 29-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `B : NEW DELHI) BEFORE SHRI U.B.S. BEDI JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER ITA NO.3632/DEL./2010 (ASSESSMENT YEAR : 2005-06) ACIT CIRCLE 10(1) VS. M/S DESIGNERS POINT (INDI A) PVT. LTD. NEW DELHI. 2681/83 GALI NO.2 BEADONPURA KAROL BAGH NEW DELHI. (PAN/GIR NO.AAACD3045R) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI ROHIT GARG SR.DR ORDER PER U.B.S. BEDI J.M. THIS APPEAL OF THE REVENUE IS FILED AGAINST THE OR DER OF LD. CIT(A) NEW DELHI DATED 19.05.2010 RELEVANT TO ASSTT. YEAR 2005-06 BY RAISING THE FOLLOWING EFFECTIVE GROUND :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.6 37 814/- MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF FOREIGN TRAVELING EXPENSES U/S 37 OF I.T . ACT 1961. 2. THE TAX EFFECT IN THIS CASE IS FOUND TO BE LESS THAN RS.3 LAC THE LIMIT PRESCRIBED UNDER INSTRUCTION NO. 3/2011 DATED 09.02.2011 AND W HEN LD. DR WAS APPRISED OF THIS FACT HE COULD NOT CONTROVERT THE SAME AND HE WAS A LSO UNABLE TO SHOW THAT THE CASE OF THE DEPARTMENT FALLS IN ANY OF THE EXCEPTIONS CARVED OU T IN THE SAID INSTRUCTIONS AND LD. COUNSEL FOR THE ASSESSEE MS. SHIKHA SHARMA CHARTER ED ACCOUNTANT PLEADED FOR DISMISSAL OF THE APPEAL ON LOW TAX EFFECT AS SAME IS LESS THA N THE LIMIT PRESCRIBED. 3. WE HAVE HEARD LD. D.R. AND CONSIDERED THE MATERI AL ON RECORD AND FIND THAT THE TAX EFFECT IN THIS CASE IS UNDISPUTEDLY LESS THAN T HE LIMIT PRESCRIBED BY INSTRUCTION NO. 3/2011 AND DEPARTMENT HAS NOT BEEN ABLE TO PLACE MA TERIAL TO SHOW THAT ITS CASE FALLS IN THE EXCEPTIONS PROVIDED IN THE SAID INSTRUCTIONS OF CBDT AND ISSUE IS ALSO FOUND TO BE COVERED BY VARIOUS ITA DECISIONS INCLUDING THAT OF ITAT DELHI BENCH IN CASE OF SHRI VIKRAM BHATNAGAR ITA NO. 60/D/2002 ORDER DATED 10. 3.2006. 4. FURTHER HONBLE BOMBAY HIGH COURT IN THE CASE OF PITHWA ENGG. WORKS (276 ITR 519) HAVE OBSERVED AS UNDER :- ONE FAILS TO UNDERSTAND HOW THE REVENUE CAN CONTEN D THAT SO FAR AS NEW CASES ARE CONCERNED THE CIRCULAR ISSUED BY THE BOA RD IS BINDING ON THEM AND IN COMPLIANCE WITH THE SAID INSTRUCTIONS THEY DO NOT FILE REFERENCES IF THE TAX EFFECT IS LESS THAN RS. 2 LAKHS. BUT THE SA ME APPROACH IS NOT ADOPTED WITH RESPECT TO THE OLD REFERRED CASES EVEN IF THE TAX EFFECT IS LESS THAN RS. 2 LAKH. IN OUR VIEW THERE IS NO LOGIC BEH IND THIS APPROACH. THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF TH E FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN THE COST OF LITIGATION EXPENSES HAS GONE UP THE ASSESSEES ON THE FILE OF THE DEPARTMENTS HAVE INCREASED; CONSEQUENTLY THE BURDEN ON THE DEPARTME NT ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR CO URTS ARE CHOKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTER THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT IS LESS THAN RS. 2 LAKHS. THE SAME POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW THE BOARDS CIRCULAR DATED MARCH 27 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHI CH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS THERE IS N O JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIB LE TAX EFFECT. 5. IT IS ALSO SEEN THAT RECENTLY THE HONBLE JURISD ICTIONAL HIGH COURT VIDE THEIR ORDER DATED 1.8.2007 IN ITA NO. 683/2007 IN THE CASE OF C IT V. MANISH BHAMBRI HAS UPHELD THE ORDER OF TRIBUNAL VIDE WHICH THE APPEAL FILED B Y THE REVENUE WAS REFUSED TO BE ENTERTAINED BECAUSE OF LOW TAX EFFECT. THE SAID ORD ER OF HONBLE JURISDICTIONAL HIGH COURT IS REPRODUCED BELOW FOR THE SAKE OF CONVENIEN CE :- THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8 TH AUGUST 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D IN IT(SS) NO. 513/DEL/2003 RELEVANT FOR THE BLOCK PERIOD 1 ST APRIL 1990 TO 14 TH FEBRUARY 2001. THE QUESTION THAT AROSE BEFORE THE ASSESSING OFFICE R WAS WITH REGARD TO CERTAIN DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSE E AND SINCE THE AMOUNTS WERE NOT EXPLAINED TAX WAS LEVIED. IN APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE AND HELD THAT THE EXPLANA TION GIVEN BY HIM WAS ACCEPTABLE AND IN ANY CASE THE ASSESSEE CANNOT BE EXPECTED TO RECOLLECT EACH AND EVERY ENTRY MADE IN THE BANK. IT MAY BE MENTIONED THAT THE AMOUNT IN DISPUTE IS R S. 30 000/- FOR THE ASSESSMENT YEAR 1999-2000 AND RS. 83 000/- FOR THE ASSESSMENT YEAR 2001-2002. IT MAY ALSO BE MENTIONED THAT FOR THE AS SESSMENT YEAR 1999- 2000 THE ASSESSING OFFICER HAS ALREADY ACCEPTED TH E EXPLANATION WITH REGARD TO A GIFT OF RS. 60 000/- AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -AN APPEAL WAS FILED BEFORE THE INCOME TAX APPELLATE TR IBUNAL. THE TRIBUNAL FOUND THAT IN VIEW OF INSTRUCTIONS ISSUED BY THE CB DT WHERE THE TAX EFFECT IS LESS THAN RE. 1 LAKH. THE DEPARTMENT SHOULD NOT FILE AN APPEAL BEFORE THE TRIBUNAL. IN THE PRESENT CASE THE TAX EFFECT IS LESS THAN RE. 1 LAKH. UNDER THE CIRCUMSTANCES THE TRIBUNAL DID NOT ENTER TAIN THE APPEAL. THE REVENUE FEELING AGGRIEVED BY THE DECISION OF T HE TRIBUNAL HAS COME UP BEFORE US UNDER SECTION 260A OF THE INCOME TAX ACT 1961. IT IS CONTENDED BY LEARNED COUNSEL FOR THE REVENUE THAT T HE TRIBUNAL IS A FACT FINDING AUTHORITY AND SHOULD HAVE ADJUDICATED THE M ATTER ON MERITS. WE ARE OF THE VIEW THAT THE ISSUE RAISED BY THE REVENUE IS NOT AT ALL SUBSTANTIAL AND THE AMOUNT IN DISPUTE IS QUITE INSIGNIFICANT CONSI DERING THAT THE CASE IS ONE OF A BLOCK ASSESSMENT. THERE IS NO JUSTIFICATIO N FOR THE INCOME TAX DEPARTMENT TO GO ON BURDENING THE TRIBUNAL THE COU RT WITH EVERY CASE RIGHT UP TO THE END. APART FROM BURDENING THE TRIB UNAL AND COURTS IT ALSO CAUSES AVOIDABLE EXPENSES TO THE ASSESSEE. IT IS C OMMON KNOWLEDGE THAT THE ASSESSEE HAS TO PAY FOR LEGAL FEES AND MERELY B ECAUSE THE INCOME TAX DEPARTMENT HAS GOT UNLIMITED RESOURCES THERE IS NO JUSTIFICATION THAT EVERY CASE SHOULD BE DRAGGED ON. UNDER THE CIRCUMSTANCES WE ARE OF THE VIEW THAT TH E TRIBUNAL WAS JUSTIFIED IN REFUSING TO ENTERTAIN THE APPEAL BECAU SE OF THE INSIGNIFICANT AMOUNT INVOLVED IN THE MATTER. NO SUBSTANTIAL QUES TION OF LAW ARISES. WE THEREFORE DISMISS THIS APPEAL. 6. SINCE TAX EFFECT IS LESS THAN THE LIMIT PRESCRI BED SO IN VIEW OF THE INSTRUCTIONS AND PRECEDENTS OF COURTS AS CITED ABOVE INCLUDING THAT OF DELHI HIGH COURT THE APPEAL IS HELD TO BE NOT MAINTAINABLE AS SUCH IS DISMISSED. 7. IN THE RESULT THE APPEAL IS DISMISSED. ORDER PRONOUNCED SOON AFTER THE CONCLUSION OF HEAR ING ON 26.12.2011. SD/- SD /- (SHAMIM YAHYA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : 26.12.2011 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XIII NEW DELHI. 5. DR BY ORDER DEPUTY REGISTRAR ITAT