Shri Kantilal Girdharbhai Patel, Surat v. The ACIT, Cent.Circle-1,, Surat

ITA 3391/AHD/2007 | 2005-2006
Pronouncement Date: 21-05-2010 | Result: Allowed

Appeal Details

RSA Number 339120514 RSA 2007
Assessee PAN ABAPP0139N
Bench Ahmedabad
Appeal Number ITA 3391/AHD/2007
Duration Of Justice 2 year(s) 9 month(s) 15 day(s)
Appellant Shri Kantilal Girdharbhai Patel, Surat
Respondent The ACIT, Cent.Circle-1,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 21-05-2010
Date Of Final Hearing 18-05-2010
Next Hearing Date 18-05-2010
Assessment Year 2005-2006
Appeal Filed On 06-08-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD CAMP AT SURAT (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HONBLE SH RI D.C. AGRAWAL A.M.) I.T.A. NO. 3378/AHD./2007 ASSESSMENT YEAR : 2005-2006 ASSISTANT COMMISSIONER OF INCOME TAX -VS.- SHRI KANTILAL GIRDHARLAL PATEL SURAT CENTRAL CIRCLE-3 SURAT (PAN : ABAPP 0139 N) (APPELLANT) (RESPONDENT) & I.T.A. NO. 3391/AHD./2007 ASSESSMENT YEAR : 2005-2006 SHRI KANTILAL GIRDHARLAL PATEL SURAT -VS.- AS SISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1 SURAT ASSESSEE BY : SHRI ASHWIN PAREKH DEPARTMENT BY : SHRI SANJEEV KASHYAP SR. D.R. O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THESE CROSS APPEALS ARE AGAINST THE ORDER DATED 17 .05.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-II AHMEDABAD FOR THE ASSESSMEN T YEAR 2005-06. 2. THE ONLY GROUND RAISED BY THE REVENUE IN ITS APP EAL IS THAT THE LD. CIT(A) ERRED IN RESTRICTING THE ADDITION OF RS.5 45 581/- MADE ON A CCOUNT OF UNDISCLOSED JEWELLERY TO RS.43 081/- 3. AT THE TIME OF HEARING BEFORE US BOTH THE SIDES CONCEDED THAT THE TAX EFFECT IN THIS CASE IS LESS THAN RS.2 LACS. 4. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE R IVAL SUBMISSIONS MADE BEFORE US AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE A LSO PERUSED THE ORDERS OF AUTHORITIES BELOW. ADMITTEDLY THE TAX EFFECT IN THIS CASE IS BELOW RS .2 LAKHS. AT THE OUTSET IT WAS NOTED THAT THE TAX 2 ITA NO. 3378 & 3391/AHD /2007 EFFECT IN THE DEPARTMENTS APPEAL IS LESS THAN RS.2 LAKHS. THIS BENCH VIDE ITS ORDER DATED 10.6.2008 IN I.T.A.NOS.335 338 TO 341/LUC/08 IN TH E CASE OF DY. CIT VS SHRI BRAHMANAND BHASIN HAS HELD THAT WHERE TAX EFFECT IN DEPARTMENTS A PPEAL IS LESS THAN RS.2 LAKHS DEPARTMENT COULD NOT HAVE FILED THE APPEAL AS PER I NSTRUCTIONS OF THE GOVERNMENT. IN THIS REGARD WE REFER TO FOLLOWING PORTION FROM THAT JUD GMENT: 10. IT IS UNDISPUTED FACT THAT IN ALL THESE APP EALS THE TAX EFFECT INVOLVED IN RESPECT OF DISPUTE IN EACH YEAR IS LESS THAN RS.2 L AKHS. THEREFORE AS PER MONETARY LIMIT THIS IS COVERED BY THE LATEST INSTRUCTIONS I SSUED BY THE C.B.D.T. AS MENTIONED ABOVE AND ALSO BOARD'S INSTRUCTIONS NO 1979 DATED 2 7.3.2000 NO.1985 DATED 29.6.2000 NO.6 OF 2003 DATED 17.7.2003 NO.19 OF 2 003 DATED 23.12.2003 NO.5/2004 DATED 27.5.2004 NO.2/2005 DATED 24.10.20 05 AND NO.5/2007 DATED 16.7.2007 WHEREIN MONETARY LIMIT FOR FILING DEPARTM ENTAL APPEAL IN INCOME-TAX MATTER AND OTHER CONDITIONS WERE SPECIFIED FOR FILI NG APPEAL BEFORE THE TRIBUNAL HIGH COURTS AND SUPREME COURT. ALL THESE INSTRUCTI ONS WERE SUPERCEDED AND FRESH MONETARY LIMITS WERE FIXED FOR THIS PURPOSE. THESE LIMITS CONTAINED IN INSTRUCTION NO 5/2008 DATED 15.5.2008. IN THIS REGARD THE REL EVANT PART OF INSTRUCTIONS CONTAINED IN PARAS 3 4 & 5 ARE REPRODUCED BELOW:- '3. APPEALS WILL HENCEFORTH BE FILED ONLY IN CASES WHERE THE TAX EFFECT EXCEEDS MONETARY LIMITS GIVEN HEREUNDER:- SL. NO. APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS.) 1. APPEAL BEFORE APPELLATE TRIBUNAL 2 00 000/- 2. APPEAL U/S. 260A BEFORE HIGH COURT 4 00 000/- 3. APPEAL BEFORE SUPREME COURT 10 00 000/- 4. FOR THIS PURPOSE 'TAX EFFECT' MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HA VE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAINST WHICH APPEAL IS INTENDED TO BE FI LED (HEREAFTER REFERRED TO AS 'DISPUTED ISSUES'). HOWEVER THE TAX WILL NO T INCLUDE ANY INTEREST THEREON. SIMILARLY IN LOSS CASES NOTIONAL TAX EFF ECT SHOULD BE TAKEN INTO ACCOUNT. IN THE CASES OF PENALTY ORDERS THE TAX E FFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE AP PEALED AGAINST. 3 ITA NO. 3378 & 3391/AHD /2007 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES I N THE CASE OF EVERY ASSESSEE. IF IN THE CASE OF AN ASSESSEE THE DISP UTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR APPEAL SHALL BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS HENCEFORTH APPEALS WILL BE FILED ONLY WITH REFEREN CE TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY WHICH INVOLV ES MORE THAN ONE YEAR APPEAL SHALL BE FILED IN RESPECT OF ALL ASSES SMENT YEARS EVEN IF THE 'TAX EFFECT' IS LESS THAN THE PRESCRIBED MONETARY L IMITS IN ANY OF THE YEAR(S) IF IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH 'TAX EFFECT' EXCEEDS THE MONETARY LIMIT PRESCRIBED.' 11. EARLIER THE HON'BLE ALLAHABAD HIGH COURT IN JU GAL KISHORE ARORA VS. DY C.I.T. [2004] 269 I.T.R. 133 (ALL.) HELD THAT INST RUCTIONS OF C.B.D.T. ARE INTERNAL MATTERS OF THE DEPARTMENT AND ASSESSEE CANNOT OBJEC T TO THE FILING OF APPEAL DESPITE SUCH INSTRUCTIONS. IN THIS REGARD WE REPR ODUCE FROM THE JUDGEMENT AS UNDER:- 'AS REGARDS THE CONTENTION THAT THE APPEAL SHOULD N OT HAVE BEEN ENTERTAINED IN VIEW OF THE DIRECTION OF THE CENTRAL BOARD OF DIRECT TAXES DATED MARCH 27 2000 WE ARE OF THE OPINION THAT TH E INSTRUCTIONS OF THE CENTRAL BOARD OF DIRECT TAXES REGARDING FILING OF A PPEALS ARE ONLY INTERNAL MATTERS OF THE DEPARTMENT AND THE ASSESSE E CANNOT OBJECT TO FILING OF AN APPEAL DESPITE SUCH AN INSTRUCTION.' 12. HOWEVER OTHER HIGH COURTS HAVE TAKEN A DIFFER ENT VIEW AND THEY HAVE HELD THAT INSTRUCTIONS OF C.B.D.T. ARE BINDING ON THE OF FICERS AND THAT MONETARY LIMITS FIXED BY THE C.B.D.T. FOR FILING APPEAL SHOULD HAV E BEEN FOLLOWED. ON THAT BASIS APPEALS FILED BY THE REVENUE WERE DISMISSED. IN TH IS REGARD WE CONSIDER IT PROPER TO REPRODUCE RELEVANT PART FROM THE FOLLOWING JUDGM ENTS. 13. IN THE CASE OF JOINT C.I.T. VS. PEERLESS DEVEL OPERS LTD. [2006] 287 I.T.R. (AT) 153 (SB) THE SPECIAL BENCH OF I.T.A.T. CALCUTTA O BSERVED AS UNDER:- 4 ITA NO. 3378 & 3391/AHD /2007 'THAT SINCE 1987 THE CENTRAL BOARD OF DIRECT TAXES HAD NOT ONLY BEEN TAKING A CONSISTENT APPROACH OF INSTRUCTING ITS OFF ICERS NOT TO FILE THE APPEAL WHERE THE TAX EFFECT IS BELOW THE MONETARY L IMIT BUT SUCH MONETARY LIMIT IS ALSO REVISED UPWARDS FROM TIME TO TIME. THE MONETARY LIMIT FOR THE YEAR UNDER CONSIDERATION WAS ONE LAKH OF RUPEES. THE INSTRUCTIONS OF THE BOARD PRESCRIBING MONETARY LIMI T FOR FILING APPEAL BEFORE VARIOUS FORUMS ARE BINDING ON THE INCOME-TAX AUTHORITIES. 14. IN THE CASE OF C.I.T. VS. CAMCO COLOUR CO. [ 2002] 254 I.T.R. 565 THE HON'BLE BOMBAY HIGH COURT OBSERVED AS UNDER:- 'CIRCULAR F. NO. 279/126/98-ITJ DATED MARCH 27 20 00 REFLECTED THE POLICY DECISION TAKEN BY THE CENTRAL BOARD OF DIREC T TAXES NOT TO RAISE QUESTIONS OF LAW WHERE THE EFFECT IS LESS THAN THE AMOUNT PRESCRIBED IN THE INSTRUCTIONS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES WITH A VIEW TO REDUCE LITIGATIONS BEFORE THE HIGH COURTS AND THE S UPREME COURT. THE CIRCULAR IS BINDING ON THE REVENUE. AN APPEAL OR RE FERENCE CONTRARY TO THE INSTRUCTIONS ISSUED IN THE CIRCULAR WILL NOT BE CONSIDERED BY THE COURTS.' 15. IN THE CASE OF C.I.T. VS. PITHWA ENGG. WORKS [2005 ] 276 I.T.R. 519 THE HON'BLE BOMBAY HIGH COURT OBSERVED AS UNDER:- 'THE CENTRAL BOARD OF DIRECT TAXES BY ITS CIRCULAR DATED MARCH 27 2000 HAS TAKEN A POLICY DECISION NOT TO FILE REFER ENCES IF THE TAX EFFECT IS LESS THAN RS.2 LAKHS. THE CIRCULAR IS APPLICABLE EV EN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMEN T CANNOT CONTEND THAT THE CIRCULAR IS BINDING ONLY WITH RESPECT TO T HE NEW CASES AND NOT WITH RESPECT TO THE OLD REFERRED CASES EVEN IF THE TAX IS LESS THAN RS.2 LAKHS. THE SAME POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT.' 16. IN THE CASE OF C.I.T. VS. DIGVIJAY SINGH [2007] 29 2 I.T.R. 314 THE HON'BLE M.P. HIGH COURT OBSERVED AS UNDER:- 'COUNSEL FOR THE RESPONDENT RAISED A PRELIMINARY OB JECTION ABOUT THE MAINTAINABILITY OF THE APPEALS. ACCORDING TO HIM TH E TOTAL TAX EFFECT IN EVERY APPEAL IS AROUND RS. 2 000. HE INVITED THE AT TENTION OF HIS COURT TO NOTIFICATION ISSUED UNDER SECTION 10 OF THE WEALTH- TAX ACT WHICH PROVIDES THAT APPEAL COULD BE PREFERRED TO THE HIGH COURT IN CASES WHERE A DEBT OF WEALTH-TAX DOES NOT EXCEED RS. 25 0 00. HE INVITED THE ATTENTION OF THIS COURT TO THE JUDGMENT OF THE BOMB AY HIGH COURT IN THE CASE OF CIT V. ZOEB Y. TOPIWALA [2006] 284 ITR 379 ; [2005] 199 CTR 5 ITA NO. 3378 & 3391/AHD /2007 656 WHEREIN THE BOMBAY HIGH COURT HAS HELD THAT TH E DIRECTIONS ISSUED BY THE BOARD DATED MARCH 27 2000 DIRECTING THE DE PARTMENT NOT TO RAISE QUESTIONS OF LAW WHERE THE TAX EFFECT IS LE SS THAN RS. 2 LAKHS IS BINDING ON THE REVENUE. THE APPEAL WHICH WAS FILED HAVING TAX EFFECT LESS THAN RS. 7 000 WAS DISMISSED AS NOT MAINTAINAB LE BY THE BOMBAY HIGH COURT BY HOLDING THAT THE DIRECTIONS ISSUED BY THE BOARD ARE BINDING ON THE DEPARTMENT. THE NEXT CASE RELIED UPO N BY HIM IS IN THE CASE OF CIT VS.- CAMCO COLOURCO. [2002] 254 ITR 56 5 ; [2002] 173 CTR 255 IN WHICH THE BOMBAY HIGH COURT HAS REPRODUC ED THE CIRCULAR ISSUED BY THE MINISTRY OF FINANCE DATED MARCH 27 2000 IN WHICH IT IS DIRECTED THAT APPEAL S UNDER SECTION 260A OF THE INCOME-TAX ACT WITH TAX EFFECT LESS THAN RS. 2 LAKHS SHOULD NOT BE PREFERRED. IN PARAGRAPH 5 OF THE SAID CIRCULAR IT I S MENTIONED THAT THE SAID CIRCULAR IS APPLICABLE TO WEALTH-TAX GIFT-TAX ESTATE DUTY ETC. IN THAT CASE ALSO THE APPEAL WAS DISMISSED BY THE BOMB AY HIGH COURT BY HOLDING THE SAME AS NOT MAINTAINABLE. A NUMBER OF O THER JUDGMENTS WERE RELIED UPON BY COUNSEL FOR THE APPELLANT FOR S UPPORTING HIS ARGUMENTS ON THE SAID QUESTION INCLUDING CIT V. KE LVINATOR OF INDIA LTD. [2002] 256 ITR 1 WHICH IS A FULL BENCH JUDGME NT OF THE DELHI HIGH COURT UCO BANK V. CIT [1999] 237 ITR 889 (SC) ; [1999] 4 SCC 599 AND CIT V. PITH WA ENGINEERING WORKS [2005] 276 ITR 519 (BOM). IN ALL THESE CASES APPEALS WERE DISMISSED ON THE GROUND THAT THE TAX EFFECT INVOLVE D IN THE APPEALS IS VERY LOW. IN THE PRESENT CASE ALSO THE TAX EFFECT I S LESS THAN RS.5 000 PER YEAR HENCE THE APPEALS ARE NOT MAINTAINABLE. HOWEVE R TO COMPLETE THE JUDGMENT WE PROCEED TO DECIDE OTHER GROUNDS.' 17. IN THE CASE OF C.I.T. VS. ZOEB Y. TOPIWALA [2006] 284 I.T.R. 379 THE HON'BLE BOMBAY HIGH COURT OBSERVED AS UNDER:- 'THE INSTRUCTION OF THE CENTRAL BOARD OF DIRECT TAX ES DATED MARCH 27 2000 REFLECTS THE POLICY DECISION TAKEN BY THE BOA RD NOT TO RAISE QUESTIONS OF LAW WHERE THE TAX EFFECT IS LESS THAN THE AMOUNT PRESCRIBED IN THE INSTRUCTIONS WITH A VIEW TO REDUCE LITIGATIO N BEFORE THE HIGH COURTS AND THE SUPREME COURT. THE CIRCULAR IS BINDI NG ON THE REVENUE.' 18. THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF C.I.T. VS. RAJASTHAN PATRIKA LTD. [2002] 258 I.T.R. 300 HELD THAT THOUG H NO APPEAL SHOULD HAVE BEEN FILED WHERE TAX EFFECT IS LESS THAN LIMIT PRESCRIBE D BUT THE HIGH COURT OUGHT NOT TO DISMISS THE APPEAL OR REJECT REFERENCE. THE REL EVANT PORTION OF HEAD NOTES ARE AS UNDER:- 6 ITA NO. 3378 & 3391/AHD /2007 'HELD - ALSO THAT IF IN SPITE OF ADMINISTRATIVE INSTRUCTIONS IN A CIRCULAR OF THE CENTRAL BOARD OF DIRECT TAXES TO THE EFFECT THA T NO APPEAL SHOULD BE FILED WHEN THE TAX EFFECT IS NOT MORE THAN RS.50 00 0 THE DEPARTMENT PREFERS TO FILE AN APPEAL OR TAKE A REFERENCE TO TH E HIGH COURT ON SUCH ADMINISTRATIVE INSTRUCTIONS THE HIGH COURT OUGHT NO T TO DISMISS THE APPEAL OR REJECT THE REFERENCE. THERE IS NO INFIRMI TY IN DISPOSING OF THE APPEAL OR REFERENCE ON THE MERITS.' 19. BUT NOW IN THE LATEST JUDGMENT THE HON'BLE AL LAHABAD HIGH COURT HAS HELD THAT WHERE TAX LIABILITY IS LESS THAN RS.5 LAKHS S UCH MATTER NEED NOT BE CARRIED IN APPEAL BEFORE THE HON'BLE ALLAHABAD HIGH COURT. IN THIS REGARD WE REFER PARAS 2 3 4 & 5 FROM THAT JUDGEMENT AS UNDER:- '2. THE APPEAL RAISES THE FOLLOWING SUBSTANTIAL QUE STION OF LAW:- 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED I.T.A.T. WAS JUSTIFIED IN DELETING THE ADDI TION OF RS.90 000/- CLAIMED AS GIFTS RECEIVED FROM 8 PARTIES EVEN THOUG H THE ASSESSEE FAILED TO PROVE GENUINENESS OF THE AFORESAID GIFTS ?' 3. THE RESPONDENT HEREIN IS STATED TO BE A COLONIZE R IN ASSESSMENT YEAR 1986- 87 HE RETURNED THE INCOME OF RS.29 890. HE FURTHE R SHOWED THE CASH CREDIT OF THE AGGREGATE AMOUNT OF RS.90 000 BEING SHOWN AS GIFTS. THEY WERE THE AMOUNTS SUPPOSED TO BE DONATED BY SOME EIGHT PERSON S. THE ASSESSING OFFICER THEREFORE MADE AN ADDITION OF RS.90 000 A ND CONSEQUENT TAX LIABILITY INCREASED WOULD BE RS.53 312. THE APPEAL PREFERRED BY THE ASSESSEE WAS DISMISSED BY THE COMMISSIONER OF INCOME TAX (APPEAL S). HOWEVER THE TRIBUNAL ENTERTAINED THE APPEAL PREFERRED BY THE AS SESSEE. THE APPELLATE COMMISSIONER TOOK THE VIEW THAT THE DONORS HAD NOT SHOWN THESE AMOUNT IN THEIR BALANCE SHEET WHICH WAS AT LEAST SEEN IN THE CASE OF ONE OF THE DONORS AND THE PERSONS CONCERNED WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER AND THEREFORE HE HAD CONFIRMED THE ADDITION. AS AGAINST THAT THE TRIBUNAL HAD NOTED THAT THE MEMORANDUM FOR GIFT WERE FILED I N EACH OF THESE CASES AND GIFT TAX ASSESSMENT WAS MADE IN THE SAME WARD WHERE THE ASSESSEE WAS BEING ASSESSED. THE TRIBUNAL THEREFORE OBSERVED THAT T HERE WAS NO DIFFICULTY FOR THE INCOME-TAX OFFICER TO KNOW FROM THE RECORD WHET HER THESE PERSONS WERE EXISTING OR NOT. BESIDES THAT AFFIDAVITS WERE ALSO FILED. IN THE CIRCUMSTANCES THE TRIBUNAL INTERFERED WITH THE ADDITION MADE BY T HE ASSESSING OFFICER AND SET ASIDE HIS ORDER AS WELL THAT OF THE COMMISSIONE R OF INCOME TAX (APPEALS). 4. IT IS A CASE WHERE PERHAPS TWO VIEWS WERE POSSIB LE AND IT IS NOTED ABOVE THAT THE TAX LIABILITY IS RS.53 312. THE CENTRAL B OARD OF DIRECT TAXES HAS 7 ITA NO. 3378 & 3391/AHD /2007 COME OUT WITH A CIRCULAR THAT WHERE THE TAX LIABILI TY IS LESS THAN RS.5 00 000 SUCH MATTERS SHOULD NOT BE CARRIED IN APPEAL. 5. IN VIEW OF THE ABOVE WE DO NOT THINK THAT THIS COURT SHOULD INTERFERE. OTHERWISE ALSO WE DO NOT FIND THAT THIS IS A CASE INVOLVING SUBSTANTIAL QUESTION OF LAW WHICH OUGHT TO BE ENTERTAINED.' 20. SINCE IN THE LATEST DECISION THE HON'BLE ALLAHABAD HIGH COURT HAS HELD THAT APPEAL INVOLVING TAX EFFECT OF LESS THAN PRESC RIBED MONETARY LIMIT AS PER INSTRUCTIONS ISSUED BY THE C.B.D.T. NEED NOT BE PUR SUED THIS JUDGMENET OF THE HON'BLE ALLAHABD HIGH COURT BEING LATEST IN TIME WO ULD BE BINDING ON THE TRIBUNAL AND THEREFORE WE HOLD THAT THE APPEALS IN THE CASES INVOLVING TAX EFFECT LESS THAN PRESCRIBED LIMIT FOR FILING APPEAL BEFORE THE TRIBUNAL SHOULD NOT HAVE BEEN FILED BY THE DEPARTMENT. 21. IT IS UNDISPUTED FACT THAT CIRCULAR ISSUED BY THE C.B.D.T. ARE BINDING ON SUBORDINATE AUTHORITIES. IN THIS REGARD WE REFER TO THE DECISIONS OF THE HON'BLE SUPREME COURT OF INDIA IN ELLERMAN LINES LTD. VS. C .I.T. [1971] 82 I.T.R. 913 (S.C); UCO BANK VS. C.I.T. [1999] 237 I.T.R. 889 (S .C); C.I.T. VS. KELVINATOR OF INDIA LTD. [ 2002] 256 I.T.R. 1 (FULL BENCH DELHI ); C.I.T. VS. SOUNDARARAJA FINANCE LTD. [2006] 283 I.T.R. 559 (MAD.); BHARAT C ONSTRUCTION CO. VS. C.I.T. [2002] 258 I.T.R. 140 (RAJ.); C.I.T. VS. BLAZE ADVE RTISING (DELHI) PVT. LTD. [2002] 255 I.T.R. 46 (DELHI) AND HARSHENDU UPENDRE KAKA VS. I.T.O. AND OTHERS [2001] 249 I.T.R. 612 (BOM.). 22. AS A RESULT WE DISMISS ALL THE APPEALS FILED BY THE REVENUE BEING AGAINST LATEST EXECUTIVE INSTRUCTIONS OF 2008 ISSUED BY THE C.B.D.T. AND BELOW MANDATORY MONETARY LIMIT PRESCRIBED THEREIN FOR FILING APPEAL S. HOWEVER IT IS NOT TO BE CONSTRUED AS A DECISION ON MERITS OR ON LEGAL CONTE NTIONS INVOLVED IN THESE APPEALS. 5. SINCE IN THE PRESENT CASE ALSO TAX EFFECT IN DEPARTMENTS APPEAL IS LESS THAN RS.2 LAKHS DEPARTMENT OUGHT NOT HAVE FILED THE APPEAL. AS THE APPEAL SO FILED IS AGAINST THE EXECUTIVE INSTRUCTIONS WHICH ARE BINDING ON THE DEP ARTMENT. EVEN ON MERIT WE ARE OF THE OPINION THAT IN THE IMPUGNED ORDER THE LEARNED COM MISSIONER OF INCOME TAX(APPEALS) HAS GIVEN COGENT REASON FOR DELETING THE ADDITIONS MADE BY THE A.O. THEREFORE WE DISMISS THE APPEAL IN LIMINE. 6. THE ONLY GROUND RAISED BY THE ASSESSEE IN ITS AP PEAL READS AS UNDER :- 8 ITA NO. 3378 & 3391/AHD /2007 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.1 50 000/- FOR SALE PROCEEDS OF CAR WRONGLY SHOWN AS LOAN AND RECTIFIED IN AY 2006-07. THE ADDITION OF RS.1 50 00 0/- SHOULD BE DELETED. 7. BRIEF FACTS RELATING TO CONTROVERSY INVOLVED IN THIS GROUND OF APPEAL IS THAT THE ASSESSING OFFICER MADE THE ADDITION OF RS.1 50 000/- FOR CRED IT BALANCE OF SHRI ANUP SULTANI. ON APPEAL BEFORE THE LD. CIT(A) THE ASSESSEE CONTENDED THAT THE AMOUNT WAS NOT RECEIVED AS LOAN OR DEPOSIT BUT IT WAS RECEIVED FOR SALE OF CAR. IT WAS FURTHER EXPLAINED THAT THE ASSESSEE HAD SOLD CAR FOR RS.8 55 084/- AND OUT OF SALE PROCEEDS RS.7 05 084/ - WAS CREDITED TO THE CAR A/C. AND RS.1 50 000/- WAS KEPT TO THE CREDIT APPEARING IN T HE BALANCE-SHEET. IF THE AMOUNT IS CREDITED TO THE CAR A/C. THE LOSS ON SALE OF CAR CLAIMED IN TH E CAPITAL ACCOUNT AT RS.8 80 041/- STANDS REDUCED TO RS.7 30 041/-. THE ENTRY BY CORRECTING THE ERROR IS PASSED IN SUBSEQUENT YEAR I.E. ASSESSMENT YEAR 2006-07. THEREFORE IT WAS CLAIMED THAT THE AM OUNT IS NOT A LOAN BUT IT REPRESENTS SALE PROCEEDS OF CAR. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE NEVER CLAIMED ANY DEPRECIATION ON THE CAR. THEREFORE THE LOSS IS DEBITED TO CAPITAL A/C. AND IT HAS NO TAX EFFECT AS THE ASSESSEE DID NOT CLAIM ANY CAPITAL LOSS IN THE COMPUTATION OF INCOME . 8. AFTER CONSIDERING THE AFORESAID SUBMISSIONS IN THE IMPUGNED ORDER THE LD. CIT(A) UPHELD THE ACTION OF ASSESSING OFFICER FOR THE DETA ILED REASONS GIVEN IN PARA 2.2 WHICH READS AS UNDER :- 2.2. ON CONSIDERATION OF THE ASSESSMENT ORDER AND THE ABOVE SUBMISSIONS IT IS NOTICED THAT THE APPELLANT HAS NOT FURNISHED ANY EX PLANATION IN RESPECT OF THIS AMOUNT SHOWN AS LOAN IN THE BALANCE SHEET IN THE A SSESSMENT PROCEEDINGS. THE AMOUNT IS CLEARLY SHOWN AS LOAN AND NOW A DIFFERENT STAND IS TAKEN. THE APPELLANT HAS BEFORE ME FURNISHED A LETTER SIGNED BY ANUP S ULTANIA STATING THAT HE HAD PURCHASED THE CAR FOR RS.8 55 000/- FROM THE APPELL ANT. ALONG WITH THAT THE PAN CARD COPY OF ANUP SULTANIA IS GIVEN. IT IS HOWEVER OBSERVED THAT THE APPELLANT HAS NOT PROVED THE CREDITWORTHINESS OF ANUP AND THAT TH E AMOUNT IS SHOWN AS CASH CREDIT IN THE NAME OF ANUP SULTANIA. NO PROOF ABOUT THE SOURCES OF PAYMENT BY ANUP SULTANIA OR HIS CAPACITY TO MAKE PAYMENT IS SH OWN. CONSIDERING THESE ASPECTS AND CONSIDERING THE FACT THAT THE ASSESSEE HAS NOW CHANGED HIS STAND THE ARGUMENT OF THE APPELLANT ARE NOT ACCEPTED AND THIS GROUND OF APPEAL IS DISMISSED. 7. AGGRIEVED BY THE ORDER OF LD. CIT(A) THE ASSESS EE IS IN APPEAL BEFORE US. 9 ITA NO. 3378 & 3391/AHD /2007 9. AT THE TIME OF HEARING BEFORE US SHRI ASHWIN PA REKH APPEARING ON BEHALF OF THE ASSESSEE CONTENDED THAT BEFORE THE ASSESSING OFFICER THE AS SESSEE SUBMITTED THE PAN OF BUYER OF CAR VEHICLE A/C. CAPITAL A/C. FOR THE ASSESSMENT YEAR 2006-07. THE LD. COUNSEL OF THE ASSESSEE EXPLAINED THAT ON THE CAR WHICH WAS SOLD IN THE PR EVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL THE ASSESSEE HAS NOT DECLARED CAPITAL GAIN ON SALE OF CAR. THE AO COMPLETED THE ASSESSMENT FRAMED UNDER SECTION 143(3) FOR THE ASSE SSMENT YEAR UNDER APPEAL AND ALSO MADE NO ADDITION ON ACCOUNT OF CAPITAL GAIN BECAUSE THE CAR IN QUESTION WAS NOT A BUSINESS ASSET NO DEPRECIATION ON THE CAR WAS CLAIMED BY THE ASSESSEE IN THE EARLIER ASSESSMENT YEARS. THE CAR WAS SOLD FOR RS.8 55 084/- AND THE AMOUNT SHOWN IN THE BALANCE SHEET AMOUNTING TO RS.1 50 000/.- IS NOTHING BUT CREDIT ENTRY OF SHRI ANUP SULTANIA WHI CH REPRESENTS SALE CONSIDERATION OF CAR WRONGLY SHOWN AS LOAN. THE LD. COUNSEL OF THE ASSES SEE SUBMITTED THAT COMPLETE NAME AND ADDRESS OF THE PERSON FROM WHOM THE CAR IS SOLD AR E AVAILABLE AND IN CASE ASSESSING OFFICER WANTS TO MAKE CROSS VERIFICATION IT CAN BE MADE. 10. ON THE OTHER HAND SHRI SANJEEV KASHYAP SR. D.R . APPEARING ON BEHALF OF THE REVENUE CONTENDED THAT THE ASSESSEE HAS NOT SHOWN ANY CAPIT AL ACCOUNT ON SALE OF CAR. SINCE BEFORE THE A.O. THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE R EGARDING SALE OF CAR CONFIRMATION FROM THE BUYER OF CAR WHEN HE ACTUALLY RECEIVED BACK RS.1 5 0 000/- FROM THE BUYER OF CAR WAS NOT FURNISHED. THEREFORE THE A.O. RIGHTLY MADE THE ADD ITION AND THE LD. CIT(A) IS LEGALLY AND FACTUALLY CORRECT IN UPHOLDING THE SAME. 11. AFTER HEARING BOTH THE SIDES WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND PERUSED THE MATERIAL PLACED BEFORE US. IT IS PERTINENT TO NOTE THAT BEFORE THE ASSESSING OFFICER THE ASSESSEE HAS NOT FURNISHED ANY EXPLANA TION. WHATEVER EXPLANATION IS FURNISHED IT WAS FURNISHED BEFORE THE LD. CIT(A). THE LD. CIT(A) WITHOUT CALLING THE REMAND REPORT UPHELD THE ACTION OF ASSESSING OFFICER. WE THEREFORE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OF FICER WITH THE DIRECTION THAT THE ASSESSEE SHOULD FURNISH ALL THE NECESSARY EVIDENCES REGARDING SALE OF CAR DETAILS OF PAYMENT RECEIVED WHY THE CAPITAL A/C. / PROFIT & LOSS A/C. ON SALE OF CAR WA S NOT DECLARED IN THE RETURN OF INCOME. THE ASSESSING OFFICER WILL EXAMINE THE SAME AND RE-ADJU DICATE THE ADDITION OF RS.1 50 000/- AFRESH. NEEDLESS TO ADD IN CASE THE ASSESSING OFFICER IS O F THE OPINION THAT INSTEAD OF MAKING THE 10 ITA NO. 3378 & 3391/AHD /2007 ADDITION OF RS.1 50 000/- CAPITAL GAIN IS REQUIRED TO BE TAXED ASSESSING OFFICER IS AT LIBERTY TO TAX THE SAME IN ACCORDANCE WITH LAW. WITH THIS OBSE RVATION THE MATTER IS RESTORED BACK TO THE FILE OF ASSESSING OFFICER WHO WILL RE-ADJUDICATE THE SA ME AFRESH AFTER GIVING APPROPRIATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 12. IN THE RESULT FOR STATISTICAL PURPOSES THE AP PEAL FILED BY THE REVENUE IS DISMISSED AND THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 21.05.2010 . SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21 / 05 /2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AHMEDABAD LAHA/SR.P.S.