DCIT, Circle - 2, Kolkata, Kolkata v. M/s. Macmet India Ltd., Kolkata

ITA 48/KOL/2011 | 2004-2005
Pronouncement Date: 14-07-2011

Appeal Details

RSA Number 4823514 RSA 2011
Assessee PAN AACCM0804B
Bench Kolkata
Appeal Number ITA 48/KOL/2011
Duration Of Justice 6 month(s) 2 day(s)
Appellant DCIT, Circle - 2, Kolkata, Kolkata
Respondent M/s. Macmet India Ltd., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 14-07-2011
Appeal Filed By Department
Bench Allotted C
Tribunal Order Date 14-07-2011
Assessment Year 2004-2005
Appeal Filed On 11-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BEN CH C KOLKATA () BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . '# SHRI C.D.RAO ACCOUNTANT MEMBER $ $ $ $ / ITA NOS . 48 & 49/KOL/2011 %& '(/ ASSESSMENT YEARS : 2004-05 & 2005-06 (*+ / APPELLANT ) D.C.I.T. CIRCLE-2 KOLKATA - % - - VERSUS - . (-.*+/ RESPONDENT ) M/S. MACMET INDIA LTD. KOLKATA (PAN: AACCM 0804 B) *+ / 0 '/ FOR THE APPELLANT: SHRI R.K.SAHA -.*+ / 0 '/ FOR THE RESPONDENT: SHRI D.S.DAMLE '1 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ) '# PER SHRI C.D.RAO AM THE ABOVE APPEALS ARE FILED BY THE REVENUE AGAINST SEPARATE ORDERS DATED 22.09.2010 AND 20.09.2010 RESPECTIVELY OF THE CIT(A )-I KOLKATA PERTAINING TO A.YRS. 2004-05 AND 2005-06. 2. IN BOTH THE APPEALS THE REVENUE HAS TAKEN T HE FOLLOWING GROUNDS OF APPEAL :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED BOTH ON THE FACTS AND IN LAW IN ADJUDICATING AGAINST THE ORDER OF THE A.O. TREATING ASSESSEES RECEIPT FROM HOUSE PROPERTY AS RENTAL A S THE BEHAVIOUR OF THE ASSESSEE IN NOT SUBJECTING SUCH PROPERTY AS BUSINES S ASSET AND CLAIMING DEPRECIATION THEREON SUGGESTS IT TO BE TREATED AS RENTAL INCOME. 2. THE APPELLANT CRAVES LEAVE TO AMEND MODIFY AND ALTER ANY GROUNDS OF APPEAL DURING THE COURSE OF HEARING OF THIS CASE. 2 3. AT THE TIME OF HEARING THE LD. AR APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT IN THIS CASE THE TAX EFFECT IS BELOW RS. 2 LAK HS. THEREFORE AS PER THE INSTRUCTION OF CBDT CIRCULAR THE REVENUE IS BARRED FROM FILING OF THE APPEAL BEFORE THIS TRIBUNAL. THE LD. COUNSEL SUBMITTED THE FOLLOWING CALCULATION IN RESPECT OF THE TAX EFFECT :- MACMET INDIA LIMITED A.YR. 2004-05 I.T.APPEAL NO.48/KOL/2011 INCOME DECLARED INCOME ASSESSED DIFFERENTIAL TAX E FFECT (-)RS.1 49 52 413/- (-)RS.1 45 08 844/- RS.4 43 569 /- RS.1 59 130/- A.YR. 2005-06 I.T.APPEAL NO.49/KOL/2011 INCOME DECLARED INCOME ASSESSED DIFFERENTIAL TAX E FFECT (-)RS.49 97 535/- (-)RS.48 96 608/- RS.1 00 927/- R S.36 932/- 4. THE LD. DR APPEARING ON BEHALF OF THE REVENUE C OULD NOT CONTRADICT THE ABOVE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE. 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE ASSESSMENT ORDER IT IS OBSERVED THAT THE TAX EFFECT IN BOTH T HE CASES IS BELOW RS.2 LAKHS. 5.1. ADMITTEDLY THE TAX PAYABLE IN RESPECT OF GROUN DS OF APPEAL BY THE DEPARTMENT IS LESS THAN RS.2 LAKHS AND AS PER REVISED INSTRUCT ION OF THE CBDT NO. 279 DATED 24 TH OCTOBER 2005 W.E.F. 31.10.2005 AND SINCE IN THE PR ESENT CASE THE ABOVE REVISED INSTRUCTION OF CBDT IS WELL APPLICABLE AND THEREFOR E IN OUR CONSIDERED OPINION THE REVENUE SHOULD HAVE REFRAINED FROM FILING SECOND AP PEAL BEFORE THE TRIBUNAL. IT WOULD BE APT TO QUOTE THE OBSERVATION OF THE DELHI HIGH C OURT IN THE CASE OF CIT VS.- ITAT 232 ITR 207 AT PAGE 216 AS BELOW :- THE CENTRAL BOARD OF DIRECT TAXES INSTRUCTIONS ARE BINDING ON THE DEPARTMENT. IF THE CASE AT HAND IS C OVERED BY A POLICY LAID DOWN BY THE CENTRAL BOARD OF DIREC T TAXES IN THAT CASE NO FAULT CAN BE FOUND WITH THE ORDER O F THE TRIBUNAL REFUSING TO STATE THE CASE AND THERE IS NO REASON WHY THE HIGH COURT SHOULD INTERFERE WITH SUCH DISCR ETION OF THE TRIBUNAL AS HAS BEEN EXERCISED CONSISTENTLY WIT H THE UNIFORM POLICY LAID DOWN BY THE CENTRAL BOARD OF DI RECT TAXES WHICH BINDS ALL THE SUBORDINATE AUTHORITIES O F THE INCOME TAX DEPARTMENT. THE HIGH COURT WOULD NOT 3 ORDINARILY ENCOURAGE BREACH OF POLICY DECISIONS AND THE DEPARTMENTAL INSTRUCTIONS WHICH HAVE A PUBLIC PURPO SE BEHIND THEM. VALUABLE TIME OF HIGH COURTS AND HIGHL Y PLACED TRIBUNALS IS NOT TO BE WASTED ON PETTY MATTE RS. 5.2. FURTHER THE BOMBAY HIGH COURT HAS ALSO HELD I N THE CASE OF CIT VS.- CAMCO COLOUR LTD. (SUPRA) AND IN THE CASE OF PITHWA ENGIN EERING WORKS REPORTED IN 276 ITR 519 MUMBAI THAT THE CIRCULAR IS BINDING ON THE REVE NUE AND AN APPEAL OR REFERENCE CONTRARY TO THE INSTRUCTION ISSUED IN THE CIRCULAR WOULD NOT BE CONSIDERED BY THE COURT. 5.3. WE FURTHER FIND THAT IT IS A SETTLED LAW THAT THE CIRCULARS ISSUED BY CBDT ARE BINDING ON THE REVENUE. THIS POSITION WAS CONFIRMED BY THE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATIO N LTD. REPORTED IN 267 ITR 272 WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISI ONS OF THE APEX COURT WITH REGARD TO BINDING NATURE OF THE CIRCULAR AND LAID DOWN THA T WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE REVENUE IS BOUN D BY IT AND CANNOT BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY T O THE TERMS OF THE STATUTE. THE APPEAL UNDER CONSIDERATION HAS CERTAINLY BEEN FILED CONTRA RY TO THE CIRCULAR ISSUED BY THE CBDT INSTRUCTION NO.5 OF 2008 DATED 15.5.2008. 5.4. IN VIEW OF THE ABOVE WE HOLD THAT THE APPEALS FILED BY THE DEPARTMENT AGAINST THE IMPUGNED ORDER OF THE LD. CIT(A) ARE CONTRARY TO THE POLICY DECISION OF THE DEPARTMENT AND AS SUCH THE APPEAS FILED BY THE DEPA RTMENT ARE DISMISSED IN LIMINE . 6. IN THE RESULT THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON _14.07.2011. SD/- SD/- MAHAVIR SINGH JUDICIAL MEMBER . .. . ! ! ! !. .. . '# '# '# '# C.D.RAO ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 14.07.2011 R.G.(.P.S.) 4 '1 / -2 3'2'4- COPY OF THE ORDER FORWARDED TO: 1. M/S.MACMET INDIA LTD. 10B O.C.GANGULI SARANI KOL KATA-700020. 2 THE DCIT CIRCLE-2 KOLKATA 3. THE CIT 4. THE CIT(A)-I KOLKATA 5. DR KOLKATA BENCHES KOLKATA .2 -/ TRUE COPY '1%9/ BY ORDER DEPUTY /ASST. REGISTRAR ITAT KOLKATA BENCHES