ITO,WARD-4(1), NAGPUR vs. SHRI VIKESH CHATURBHUJ AGRAWAL, NAGPUR

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ITA 389/NAG/2013Status: DisposedITAT Nagpur27 June 2017AY 2008-094 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal in limine. This was based on a CBDT circular directing that appeals should not be filed if the tax effect is below Rs. 10 lakh, which was the case here.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting an addition of Rs. 25,33,989 on account of business income. The Revenue argued that the assessee was not earning agricultural income and was solely profiting from land sales.

What were the issues?

Whether the Revenue's appeal should be entertained given the tax effect below the threshold specified by CBDT circulars. The underlying issue was the classification of land sale income as business income.

Which sections of the Income-tax Act were involved?

Section 268A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR

Before: SHRI P.K. BANSAL & SHRI AMARJIT SINGH

For Appellant: Shri Nilesh Sindhwani
For Respondent: Shri A.R. Ninawe

PER AMARJIT SINGH, J.M.

The present appeal preferred by the Revenue is directed against

the impugned order dated 7th August 2013, passed by the learned

Commissioner (Appeals)–II, Nagpur, for the assessment year 2008–

09, on the following grounds of appeal:–

“1. Whether on the facts and circumstances of the case and in law, the learned CIT(A) is correct in deleting the addition of ` 25,33,989 on account of business income without considering the fact that the assessee is not earning agricultural income from land, also the sole intention fo the assessee is to earn profit on sale of land.

2 M/s. B.K. Construction

2.

Whether on the facts and circumstances of the case and in law, the learned CIT(A) is correct in not considering that the assessee engaged in purchase and sale of agricultural land situated in commercially viable area and the business of the assessee is purchase and sale of land.”

2.

At the very outset, we noted that in this case the tax effect on

the income under dispute is less than ` 10 lakh. We further noted that

the Central Board of Direct Taxes vide Circular No. 21/2015 dated 10th

December, 2015 file no.279 of Misc.142/2007–ITJ(PT) has issued the direction in supersession of the Instruction No.5/2014 dated 10th July

2014 in pursuance with the power interested under section 268A of

the Act that no appeal should be filed before this Tribunal in case tax

effect does not exceed ` 10 lakh. The “tax effect” in this regard means

the difference between the tax on the total income assessed and the

tax that what have been chargeable had such total income been

reduced by the amount of income in respect of issues against which

appeal is intended to be filed. This circular further states that tax will

not include any interest thereon the chargeability of interest itself is in

dispute. We further noted that under Para–10 which is reproduced as

under, it has been mentioned in the circular that this instruction will

apply even to the pending appeals.

“10. This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed. Appeals before the Supreme Court will be governed by the

3 M/s. B.K. Construction

instructions on this subject, operative at the time when such appeal was filed.”

In the impugned case, we noted that the tax effect on the 3.

issue under dispute does not exceed ` 10 lakh. In view of this fact

as per the instruction, the Revenue is not supposed to press the

appeal. We, therefore, dismiss the appeal filed by the Revenue in

limine without going into the merits of the case as in our opinion

the circulars issued by CBDT are binding on the Departmental

officers in view of the provision of section 268A(1) of the Act. The

said view has been taken by Hon’ble Supreme Court in the case of

Navneet Lal Zaveri v/s AAC, 56 ITR 198 (SC). We accordingly

dismiss the appeal filed by the Revenue.

4.

In the result, Revenue’s appeal is dismissed.

Order pronounced in the open Court on 27.06.2017

Sd/- Sd/- P.K. BANSAL AMARJIT SINGH VICE PRESIDENT JUDICIAL MEMBER

NAGPUR, DATED: 27.06.2017

4 M/s. B.K. Construction

Copy of the order forwarded to:

(1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Nagpur City concerned; (5) The DR, ITAT, Nagpur; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary

(Dy./Asstt. Registrar) ITAT, Nagpur

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