Energetic Construction (P) Ltd.,, vs Department Of Income Tax

ITO, Ward 11 (1), vs. M/s. Energetic Constructions (P) Ltd., New Delhi. C/o Prof. S. Sampath, A - 2, Ground Floor, Jangpura Extension, Near DAV Public School, New Delhi - 110 014.

(PAN : AAACE2614H)

(APPELLANT) (RESPONDENT)

ASSESSEE BY : Shri Ankit Saini, CA REVENUE by : Shri P. Dam Kanunjna, Senior DR

Date of Hearing : 02.06.2015 Date of Pronouncement : 02.06.2015

ORDER

PER GEORGE GEORGE K., JUDICIAL MEMBER :

This appeal, at the instance of the revenue, is directed against the order of

the Commissioner of Income-tax (Appeals)-XIV, New Delhi dated 20.01.2005.

The relevant assessment year is 2001-02.

2. In this case, the revenue has come in appeal against the order of the ld.

CIT (A) that the assessee has rightly netted the interest while computing the

work in progress and deleted the addition of Rs.13,17,244/- made by the 2 ITA NO.1378/Del/2005

Assessing Officer by holding that the interest income is assessable under the

head "other sources" in spite of the fact that the business of assessee had not

commenced up to the end of previous year under consideration. The assessee

filed return of income on 31.10.2001 declaring income of Rs.7,18,825/-. The

AO assessed the income at Rs.20,36,070/-. The Assessment Year in the appeal

is 2001-02. The tax effect on the deleted addition is less than the threshold

limit, i.e. Rs.4 lacs. The appeal has been filed in the year 2005.

3. At the time of hearing, ld. Counsel submitted an application for

adjournment of hearing which has been rejected after taking into account that

the tax effect in the appeal is less than the threshold limit i.e. Rs.4 lacs.

3. We find that the tax effect in this case is less than Rs.4 lacs. As per the

recent CBDT Instruction No.5/2014 dated 10.07.2014, the revenue is not

permitted to file appeal before the Tribunal if the tax effect is less than

Rs.4.00 lakh. We find support from the decision of Hon'ble Supreme Court

dated 25.03.2011 in ITA Nos. 3 to 5/2010. Ld. DR for the revenue submitted

that Instruction no. 5/2014 is not applicable for the appeals filed prior to issue

of the said instructions. It is also submitted that the Full Bench of Punjab &

Haryana High Court in the case of CIT Vs. Virendra Construction Co., 239

CTR 1, held that revised monetary limits are not applicable to the pending

appeals, and it is in favour of the revenue.

4. We have heard both the sides and gone through the material available on

record. Instruction No.5/2014 dated 10.07.2014 has revised the monetary 3 ITA NO.1378/Del/2005

limit for filing the appeal by the department before Income-tax Appellate

Tribunal, Hon'ble High Courts and Hon'ble Supreme Court. Monetary limit

for filing the appeal before the Tribunal is Rs.4.00 lakh; before Hon'ble High

Court Rs. 10.00 lakh and before Hon'ble Supreme Court Rs. 25.00 lakh.

Hon'ble Supreme Court in the order dated 25.03.2011 referred to above has

held as under:-

"It is stated that the tax impact in the present cases is less than Rs. 10.00 lacs. The Department has recently issued an instruction bearing no. 3/2011 dated 09.02.2011, which is identical to its earlier instruction bearing no. 5/2008 dated 15.05.2008 except that in so far as the High Court is concerned, the monetary limit in respect of appeals where the questions of law raised need not to be answered, has been raised from Rs. 4.00 lacs to Rs. 10.00 lacs. The Division Bench of this Court in ITA No. 89/1999 decided on 28.01.2011 has already held that the instruction bearing no. 5/2008 dated 15.05.2008 would apply even to the old pending references and appeals. This principle would thus naturally equally apply to the instant instruction bearing no.3/2011 dated 09.02.2011, as well. The tax effect being less than Rs. 10.00 lacs, the question of law does not require to be answered. The appeals are disposed of accordingly."

4.1 Hon'ble Delhi High Court in the case of CIT Vs. Delhi Race Club Ltd.

in ITA No. 128/2008 dated 03.03.2011 has held as under:-

"The tax effect involved in the present appeal is Rs. 4,65,860/-. As per the recent guidelines of the CBDT, appeal in those cases where the tax effect is less than Rs. 10.00 lacs, are not to be entertained.

This court in the case of CIT, Delhi-III Vs. M/s P.S. Jain & Co., being ITA No. 179/1991 decided on 2nd August, 2010 has taken a view that such circular would also apply to pending cases."

4 ITA NO.1378/Del/2005

4.2 In view of the above, Instruction no. 5/2014 dated 10.07.2014 will

apply to all pending appeals. Respectfully following the precedent, it is held

that the appeal is not maintainable in the instant case as the tax effect is less

than Rs.4 lacs. Accordingly, it is held that appeal filed by the revenue is not

maintainable.

5. In the result, appeal filed by the department is dismissed without going

into the merits.

Order pronounced in open court on this day of 2nd June, 2015.

Sd/- sd/- (N.K. SAINI) (GEORGE GEORGE K.) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated the 2nd day of June, 2015 TS

Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A)-XIX, New Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.