ITO, NEW DELHI vs. M/S. IME INTERNATIONAL PVT. LTD., DELHI

PDF · subscribers
ITA 3680/DEL/2010Status: DisposedITAT Delhi06 January 2016AY 2002-034 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 held that the Revenue's appeal was not maintainable due to a low tax effect, as per CBDT Circular No. 21/2015. The cross-objection by the assessee was dismissed as infructuous.

What were the facts?

The Revenue appealed the deletion of an addition of Rs. 16,00,000/- made under Section 68 of the Income Tax Act, 1961. The addition pertained to share application money received by the assessee.

What were the issues?

Whether the Revenue's appeal is maintainable before the Tribunal given the tax effect and the applicability of CBDT circulars. The underlying issue was the genuineness of share application money.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI

Before: SHRI H.S. SIDHU & SHRI O.P. KANT

PER H.S. SIDHU, J.M.

This appeal by the Department and the Cross Objection by the Assessee

is directed against the Order dated 10.5.2010 of Ld. CIT(A)-XIII, New Delhi

pertaining to assessment year 2002-03 on the following grounds:-

1.

On the facts and circumstances of the case and in law the order

of the Ld. CIT(A) is wrong, perverse, illegal and agaisnt the provisions of law which is liable to be reversed.

2.

On the facts and circumstnaces of the case and in law, the order of the Ld. CIT(A) is perverse in deleting the addition of Rs.

16,00,000/- u/s. 68 of the I.T. Act, 1961 as credit worthiness

and genuineness of the transaction regarding receipt of Share

Application money from the parties mentioend in the assessment order was not proved before the AO in spite of several opportunities afforded to the assessee company.

3.

On the facts and in the circumstances of the case, the Ld. CIT(A)

has erred in giving relief to the assesee by ignoring assessee’s

failure to produce the share applicants for verifications.

4.

On the facts and in the circumstances of the case, the Ld. CIT(A)

has erred in not considering the fact that the share applicants

admitted before the investigation wing that they were in business of providing accommodation entry.

5.

The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing.”

2.

We have heard both the parties and perused the material on record. We

find that Revenue in the Grounds of Appeal before the Tribunal has challenged

the deletion of addition of Rs. 16,00,000/- u/s. 68 of the I.T. Act, 1961 vide

ground no. 2, as aforesaid. We also find that Ld. CIT(A) vide his impugend

order dated 10.5.2010 vide para no. 5 at page 34 has held as under:-

“5…….Accordingly, the AO was not justified in treating Rs. 16,00,000/-

the amount of share application money received by the appellant as its undisclosed income.

Therefore this gorund of appeal is allowed.”

3.

From the above, we find that the tax effect in the Revenue’s Appeal is less

than Rs.10,00,000/-, therefore, the Department’s Appeal is not maintainable,

in view of the Circular No. 21/2015 dated 10th December, 2015 issued vide F.No. 279/Misc. 142/2007-ITJ (Pt.) by the CBDT. For the sake of convenience,

the relevant para nos. 3 & 10 of the aforesaid CBDT’s Circular are reproduced

as under:-

“3. Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: Monetary Limit S No Appeals in Income-tax matters (in Rs) 1 Before Appellate Tribunal 10,00,000/- 2 Before High Court 20,00,000/- 3 Before Supreme Court 25,00,000/-

It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case.

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

4.

It is not in dispute that the Board’s instruction or directions issued to the income-tax authorities are binding on those authorities, therefore, the Department should have withdrawn/ not pressed the present Appeal, in view of the aforesaid instructions since the tax effect in the instant Appeal is less than the amount of Rs. 10 lacs, prescribed in the above said CBDT’s Instructions.

5.

Keeping in view the CBDT Instruction No. 21/2015 dated 10th December,

2015, we are of the view that the Revenue should have withdrawn/ not pressed

the instant appeal before the Tribunal. We are also of the view that the said

Instructions are applicable for the pending appeals and appeals to be filed

henceforth in Tribunal. Accordingly, the Revenue’s Appeal is dismissed.

6.

As regards the Cross Objection filed by the Assessee is concerned, the same is in support of the impugend order passed by the Ld. CIT(A), hence, the same is dismissed as infructuous.

7.

In the result, Appeal filed by the Revenue as well as Cross Objection

filed by the Assessee stand dismissed.

Order pronounced in the Open Court on 06/1/2016. (O.P. KANT) JUDICIAL MEMBER

Dated: 06/1/2016

*SR BHATNAGAR*

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →