The ITO, Ward-6(2),, Surat v. Jaykrishna Prints, Surat

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH JUDICIAL MEMBER DATE OF HEARING: 11.5.10 DRAFTED ON:11.05.2010 ITA NO. 4592 /AHD/ 2007 ASSESSMENT YEAR : 2004-2005 INCOME TAX OFFICER WARD-6(2) SURAT. ROOM NO.615 6 TH FLOOR AAYAKAR BHAVAN MAJURA GATE SURAT. VS. M/S. JAYKRISHNA PRINTS 77 GIDC PANDESRA SURAT. PAN/GIR NO. : AABFJ9652N (A PPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI DR. JAYANT JAVE RI SR. D.R. RESPONDENT BY: SHRI VARTI CHOKSI C.A. O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD.CIT(APPEALS)-IV SURAT DATED 1.10.2007 IN RELATI ON TO THE ASSESSMENT YEAR 2004-05 DELETING THE ADDITION ON ACCOUNT OF SUPPRES SION OF JOB CHARGES OF RS.3 79 301/- ADDITION ON ACCOUNT OF PERSONAL EXPE NSES RS.54 590/- ADDITION OF RS.2 04 670/- ON ACCOUNT OF SUPPRESSION OF CLOSI NG STOCK DISALLOWANCE ON ACCOUNT OF PURCHASE OF COLOUR AND CHEMICAL RS.2 44 593/- AND DISALLOWANCE ON ACCOUNT OF EXCESSIVE LABOUR AND DESIGN EXPENSES RS. 28 884/- WHICH HAS BEEN CHALLENGED BY THE REVENUE IN THIS APPEAL. 2. AT THE TIME OF THE HEARING THE LEARNED AUTHORISE D REPRESENTATIVE OF THE ASSESSEE AT THE OUTSET POINTED OUT FROM THE ORD ER OF ASSESSMENT AS PASSED - 2 - BY THE LEARNED ASSESSING OFFICER THAT EVEN IF THE A SSESSMENT AS MADE BY THE LEARNED ASSESSING OFFICER IS UPHELD THEN ALSO THE T OTAL INCOME OF THE ASSESSEE WOULD BE RS.1 50 230/- AND INVOLVING TAX LIABILITY OF RS.63 126/- ONLY. IN VIEW OF THE CBDT CIRCULAR THE REVENUE IS DEBARRED FROM F ILING THE APPEAL ON THE DATE ON WHICH APPEAL WAS FILED BY THE REVENUE I.E. 30.12.2007 WHEN TAX EFFECT INVOLVED IN THE APPEAL WAS LESS THAN RS.2 LACS. IN SUPPORT OF THE CONTENTION THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESS EE RELIED UPON THE ORDER OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS MANGLAM RICINUS LTD. (2008) 174 TAXMAN 186 (DEL) AND THE ORDER OF THIS T RIBUNAL IN THE CASE OF DCIT VS SAMBHAV MEDIA LTD IN ITA NO.2733/AHD/2006 DATED 24 TH APRIL 2009. HE ALSO SUBMITTED THAT THE FILING OF THE APPEAL BY THE REVENUE AT THE MATERIAL TIME WAS GOVERNED BY THE SAME CIRCULAR WHICH HAS BE EN REFERRED IN ABOVE CITED CASES EXCEPT THAT THE MONETARY LIMIT OF TAX E FFECT WAS ENHANCED FROM RS.1 LAC TO RS.2 LACS ON 24.10.2005. WE FIND THAT T HE HON'BLE DELHI HIGH COURT IN THE CASE OF MANGLAM RICINUS LTD.(SUPRA) HAS HELD AS UNDER:- 4. ON THIS BASIS THE TRIBUNAL CAME TO THE CONCLUS ION THAT EVEN IF THE ORDER OF THE AO IS UPHELD THE INCOME OF THE ASSESS EE WOULD BE NEGATIVE AND THEREFORE THE TAX EFFECT WOULD BE CE RTAINLY LESS THAN RS. 1 LAKH. ON THIS BASIS THE TRIBUNAL DECLINED TO ENTER TAIN THE APPEAL. THAT IS HOW THE REVENUE IS BEFORE US UNDER S. 260A OF THE I T ACT 1961. 5. WE ARE IN AGREEMENT WITH THE VIEW OF THE TRIBUNA L THAT EVEN IF THE ORDER OF THE AO IS UPHELD THE TAX RECOVERY SO FAR A S THE REVENUE IS CONCERNED WOULD BE NIL IN THE EVENT THE QUESTION HA S ANY IMPACT ON SUBSEQUENT YEARS WE LEAVE IT OPEN TO THE REVENUE TO RAISE IT IN THE SUCCEEDING YEARS IF NEED ARISES. 6. LEARNED COUNSEL FOR THE REVENUE SUBMITS THAT THE TAX EFFECT IS NOT REQUIRED TO BE SEEN BUT THE TAX EFFECT ON THE ISSUE INVOLVED IS TO BE - 3 - SEEN. THIS IS PRECISELY WHAT THE TRIBUNAL HAS DONE. WE DO NOT FIND ANY ERROR IN THE VIEW TAKEN BY THE TRIBUNAL. 3. THIS ORDER WAS FOLLOWED BY THIS TRIBUNAL IN THE CASE OF SAMBHAV MEDIA LTD. (SUPRA) WHEREIN IT WAS HELD AS UNDER:- 2. A PRELIMINARY OBJECTION WAS TAKEN ON BEHALF OF THE RESPONDENT- ASSESSEE AT THE TIME OF THE HEARING TO THE EFFECT T HAT THE APPEAL INVOLVES NO TAX EFFECT BECAUSE THE ASSESSED INCOME IS RS.NIL EVEN AFTER THE DISALLOWANCES AND THEREFORE IN TERMS OF THE JUD GMENT OF THE DELHI HIGH COURT IN CIT V MANGLAM RICINUS LTD (2008) 174 TAXMAN 186 THE APPEAL REQUIRES TO BE DISMISSED. SEVERAL CIRCULARS/ INSTRUCTIONS HAVE BEEN ISSUED BY THE CBDT LAYING DOWN MONETARY LIMITS OF TAX FOR THE PURPOSE OF FILING APPEALS BY THE DEPARTMENT TO THE TRIBUNAL. THE PRESENT APPEAL WAS FILED ON 8-12-2006 WHERE THE PRE VAILING INSTRUCTION WAS TO THE EFFECT THAT IT SHOULD INVOLVE A TAX EFFE CT OF AT LEAST RS.1 00 000 IN THE CASE OF AN APPEAL TO THE TRIBUNA L. IN THE PRESENT CASE THE INCOME ASSESSED IS RS.36 78 829 AGAINST WHICH T HE BROUGHT FORWARD LOSS WAS SET OFF IN FULL AND THE TOTAL INCOME WAS A SSESSED AT RS.NIL. THERE IS THUS NO TAX PAYABLE BY THE ASSESSEE. THUS EVEN IF THE ORDER OF ASSESSMENT IS UPHELD THE ASSESSEE WOULD NOT BE REQU IRED TO PAY ANY TAX. THE JUDGMENT OF THE DELHI HIGH COURT THEREFORE APPLIES TO THE PRESENT APPEAL. THE AHMEDABAD BENCHES OF THE TRIBUN AL HAVE BEEN CONSISTENTLY TAKING THE VIEW FOLLOWING THE JUDGMEN T OF THE DELHI HIGH COURT (SUPRA) THAT IN SUCH CASES THE APPEAL FILED B Y THE REVENUE HAS TO BE DISMISSED. CONSISTENT THEREWITH AND FOLLOWING W ITH RESPECT THE JUDGMENT OF THE DELHI HIGH COURT CITED ABOVE WE DI SMISS THE APPEAL FILED BY THE DEPARTMENT IN LIMINE AS NOT MAINTAINABLE. IN THE VIEW WE HAVE TAKEN THE GROUNDS TAKEN BY THE REVENUE ARE NO T ADJUDICATED UPON. - 4 - 4. IN VIEW OF THE ABOVE AND IN VIEW OF THE FACT THA T EVEN IN CASE REVENUES APPEAL IS ALLOWED THE TAX EFFECT WILL NOT BE MORE THAN RS.63 126/- WE RESPECTFULLY FOLLOWING THE ABOVE DECISION DISMISS THE APPEAL OF THE REVENUE IN LIMINE. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON THIS 14 TH DAY OF MAY 2010. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; ON THIS 14 TH DAY OF MAY 2010. PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-IV SURAT. 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 11.05.2010 ---------------- --- 2. DRAFT PLACED BEFORE AUTHORITY 13.05.2010 ----- -------------- 3. DRAFT PROPOSED & PLACED 13.05.2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 13.05.2010 ---------- --------- JM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 13.05.2010 -------- ------------ 6. KEPT FOR PRONOUNCEMENT ON 14.05.2010 --------- ----------- 7. FILE SENT TO THE BENCH CLERK 14.05.2010 ------ -------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- -- -------------------