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आदेश/Order
Per Sanjay Garg, Judicial Member:
The captioned cross appeals have been preferred by the assessee and
Revenue against the order of the Commissioner of Income Tax (Appeals),
Jalandhar [hereinafter referred to as CIT(A)]. First, we shall deal with the appeal of the assessee in ITA No. 155/Chd/2018.
ITA No. 155/Chd/2018 2. The assessee in this appeal has taken two grounds. Ground No.1 is
legal ground agitating the action of the CIT(A) in upholding the action of
the Assessing officer in framing assessment u/s 153A of Income-tax Act,
1961 (in short 'the Act'). Ground No.2 is on merits, agitating the action of
the CIT(A) in upholding the disallowance of Rs. 5,52,000/- u/s 36(i)(iii) of
the Income Tax Act which was already disallowed by the assessee in the
return of income filed u/s 153A of the Act.
The brief facts of the case are that the original assessment in this
case was framed u/s 143(3) of the Act, wherein, the Assessing officer has
made disallowance of Rs. 49,00,926/- u/s 36(1)(iii) of the Act. However,
in appeal, the Ld. CIT(A) restricted the said disallowance to Rs.5,52,000/-.
Thereafter, a search action was carried out in the case of the assessee
pursuant to which the assessment was framed by the Assessing officer u/s
153A of the Act. In the fresh assessment u/s 153A of the Act, the
Assessing officer again confirmed the disallowance u/s 36(i)(iii) of the Act
ITA Nos. 155-301-156-C/2018 M/s SEL Manufacturing Co Ltd., Ludhiana 3
at Rs. 49,00,926/- despite the fact that in appeal against the original
assessment framed by the Assessing officer, the Ld. CIT(A) had restricted
the said disallowance to Rs. 5,52,000/-. The Assessing officer observed
that the Department had moved an appeal before the ITAT against the order
of the CIT(A) against the original assessment order, hence he sticked to
the amount of original disallowance made on this issue in the assessment
order.
The Ld. Counsel for the assessee has brought our attention to the
order of the Tribunal passed in the appeal of the Department in respect of
the addition made in the original assessment proceedings, whereby, the
Tribunal vide order dated 7.02.2017 passed in ITA No. 106/Chd/2012
along with other appeals has upheld the order of the CIT(A) in restricting
the disallowance to Rs. 5,52,000/- against the disallowance made by the
Assessing officer of Rs. 49,00,926/-. Since the Assessing officer in the
assessment framed u/s 153A of the Act had reconfirmed the disallowance
made of Rs. 49,00926/-, as was made in the original assessment
proceedings u/s 143(3) of the Act, the assessee preferred appeal before
the CIT(A). However, the Ld. CIT(A) observing that the appeal of the
Revenue against the order of the CIT(A) in respect of original assessment
proceedings has been dismissed, he therefore, restricted the disallowance
as per the order of the CIT(A) in first round at Rs. 5,52000/-.
Now coming to the present appeal of the assessee. So far as the legal
ground that the assessment should not have been framed u/s 153A of the
Act is concerned, we find that no addition has been made by the Assessing
ITA Nos. 155-301-156-C/2018 M/s SEL Manufacturing Co Ltd., Ludhiana 4
officer in this case. That he has simply retained the additions as were
made in the original assessment. So far as the order of the CIT(A) in the
first round restricting the disallowance at Rs. 5,52,000/- as against the
addition made by the Assessing officer at Rs. 49,00,926/- is concerned,
the Ld. CIT(A) in the impugned order has simply retained the disallowance
which was retained by the CIT(A) in the first round. The assessee has
also mentioned in its grounds of appeal that he has also suo moto
disallowed the said amount in the return filed u/s 153A of the Act. Under
these circumstances, there is no grievance left with the assessee in this
case. However, it is clarified that if the assessee has already disallowed
the said amount of Rs. 5,52,000/- in the return filed u/s 153A of the Act,
no further disallowance will be attracted. Subject to the above
observations, the appeal of the assessee is hereby dismissed.
ITA No. 301/Chd/2018 (A.Y.2008-09)
At the outset, the Ld. Counsel of the assessee has submitted that the
tax effect involved in the present case is less than Rs. 20 lacs. The Ld. DR
has also fairly admitted that CBDT Circular No. 3/2018 is applicable to
this appeal, hence, this appeal of the Revenue is liable to be dismissed.
It may be noted that CBDT vide Circular No. 3/2018 dated
11.07.2018 has revised the monetary limit upto Rs.20 lacs for filing
appeals by the Department before the Tribunal and further vide para 13 of
the said Circular it has been clarified that said circular is applicable
retrospectively to the pending appeals also. The Hon’ble Punjab &
Haryana High Court in the case of “Principal CIT of Income Tax Vs.
Surinder Kumar Singhal” ITA No 406-2016 (O&M) vide order dated
30.1.2017 while further relying upon the decision of the Hon'ble Supreme
ITA Nos. 155-301-156-C/2018 M/s SEL Manufacturing Co Ltd., Ludhiana 5
Court in the case of “CIT Vs. Dhanalekshmi Bank Ltd.” (2015) 373 ITR
526 (SC), has dismissed the appeal of the Revenue without going into the
merits due to low tax effect leaving the question of law open. In view of
the CBDT Circular No. 03/2018 (supra) and in the light of the above
referred to decision of the Hon'ble Jurisdictional Punjab & Haryana High
Court (supra), the present appeal of the Revenue is dismissed due to low
tax effect.
It is, however, clarified that the dismissal of the above appeal shall
not be taken to be affirmation of the order of the CIT(A) on merits. The
legal issue raised by the Revenue is being left open to be adjudicated in an
appropriate case.
ITA No. 156/Chd/2018 (A.Y.2009-10)
At the outset, Ld. Counsel for the assessee has submitted in
writing that the assessee is not interested in pursuing the appeal, as
such, he intends to withdraw the present appeal. The Ld. DR has no
objection for the said withdrawal.
In view of the above, we grant permission to the assessee to
withdraw the appeal. Consequently, the appeal of the assessee is hereby
dismissed as ‘Withdrawn’.
In the result, the appeals filed by the assessee and Revenue are
hereby, dismissed.
Order pronounced in the Open Court on 28.11.2018.
Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member
ITA Nos. 155-301-156-C/2018 M/s SEL Manufacturing Co Ltd., Ludhiana 6
Dated : 28.11.2018 “आर.के.”
आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar