M/S Homera Tanning Industries Private ... vs Department Of Income Tax

DCIT-6 v. M/s Homera Tanning Industries Kanpur Pvt. Ltd. 150 Feet Road, Jajmau, Kanpur TAN/PAN: AAACH3613H (Appellant) (Respondent)

Appellant by: Smt. Swati Ratna,D.R. Respondent by: Shri. Rakesh Garg, Advocate Date of hearing: 23 06 2015 Date of pronouncement: 30 06 2015

ORDER

PER SUNIL KUMAR YADAV:

These appeals are preferred by the Revenue against the respective orders of the ld. CIT(A). We, however, prefer to adjudicate these appeals one after the other.

I.T.A. No. 595/LKW/2014:

2. At the very outset, the learned Counsel for the assessee has submitted that the tax effect involved in this appeal is less than the prescribed monetary limit, therefore, the Department ought not to have filed this appeal in view of the instructions issued by C.B.D.T.

3. The Learned D. R. did not controvert the above fact.

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4. It is noticed that Section 268A of the Act has been inserted by the Finance Act, 2008 with retrospective effect from 1.4.1999. The provisions contained in section 268A read as under:-

"268A. (1) The Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of this Chapter.

(2) Where, in pursuance of the orders, instructions or directions issued under sub-section (1), an income-tax authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of--

(a)the same assessee for any other assessment year; or

(b)any other assessee for the same or any other assessment year.

(3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or instructions or directions issued under sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case.

(4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case.

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(5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) shall apply accordingly.]"

5. It is not in dispute that the Board's instructions or directions issued to the Income-tax Authorities are binding on the Income-tax authorities, therefore, the Department ought not to have filed this appeal in view of the provisions of section 268A of the Act, since the tax effect in the instant case is less than the amount prescribed for not filing the appeal. Accordingly, this appeal is dismissed.

I.T.A. No. 596/LKW/2014:

6. In this appeal, the Revenue has assailed the order of the ld. CIT(A) on the following grounds:-

1. That the Commissioner of Income Tax (Appeals) has erred in law and on facts in allowing the relief of Rs.21,80,515/-on account of deduction u/s. 80HHC without appreciating the fact that the DFRC credits amounting to Rs.80,78,539/- was not eligible for deduction u/s. 80HHC of the Act.

2. That the Commissioner of Income Tax (Appeals) has erred in law and on facts in allowing the relief of Rs.75,398/- on account late payment of ESI & PF without appreciating the fact that the assessee itself added this amount in the computation of income and no addition was made by the AO.

3. That the Commissioner of Income Tax (Appeals) has erred in law and on facts in allowing the relief of Rs.41,401/- on account of Telephone expenses without appreciating the fact that during the course of assessment proceedings, the assessee failed to establish with documentary evidence that these expenses were incurred for wholly and exclusively for business purposes. :-4-:

4. That the Commissioner of Income Tax (Appeals) has erred in law and on facts in allowing the relief of Rs.59,890/- on account of vehicle Maintenance & Depreciation without appreciating the fact that during the course of assessment proceedings, the assessee failed to establish with documentary evidence that these expenses were incurred for wholly and exclusively for business purposes.

5. That the order of Commissioner of Income Tax (Appeals), being erroneous, unjust and bad in law be vacated and the order of Assessing officer be restored.

7. With regard to ground No.1, our attention was invited to the order of the ld. CIT(A) in which the ld. CIT(A) has restored the matter to the Assessing Officer with a direction to re-adjudicate the issue in the light of the judgment of the Hon'ble Apex court in the case of Topman Exports vs. CIT, 342 ITR 49(SC). Though the appeal is filed by the Revenue, the ld. D.R. has agreed that there is no infirmity in the direction of the ld. CIT(A) with regard to the re-computation of deduction under section 80HHC of the Act in the light of the judgment of the Hon'ble Apex Court in the case of Topman Exports vs. CIT (supra). Therefore, we confirm the order of the ld. CIT(A) in this regard and reject ground No.1.

8. With regard to ground No.2, our attention was invited that the ld. CIT(A) has adjudicated the issue and has deleted the addition having observed that the payments were made before filing of the Income-tax return in the light of the judgment of the Hon'ble Apex court in the case of CIT vs. Alom Extrusions Ltd, 319 ITR 306. Since the ld. CIT(A) has decided the issue in the light of the judgment of the Hon'ble Apex court, we find no infirmity in the order of the ld. CIT(A). Therefore, we confirm the order of the ld. CIT(A) in this regard and reject ground No.2.

9. So far as grounds No.3 & 4 are concerned, ad-hoc disallowances were made by the Assessing Officer under the head "telephone expenses"

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and "vehicle maintenance expenses & depreciation" on the ground that there is possibility of personal use of vehicle and telephone.

10. This issue was examined by the ld. CIT(A) in the light of the judgment of the Hon'ble Gujarat High Court in the case of Sayaji Engineering Works Pvt. Ltd. vs. CIT, 253 ITR 749 (Guj) in which it has been held that in the case of company, there is no possibility of personal use of vehicle and telephone. Since the ld. CIT(A) has adjudicated the issue following the judgment of the Hon'ble Gujarat High Court, we find no infirmity therein. Accordingly we confirm the same. Accordingly, the order of the ld. CIT(A) is confirmed on this issue and grounds No.3 & 4 are rejected.

11. Ground No.5 is general in nature which does not call for any specific adjudication.

12. In the result, appeals of the Revenue are dismissed.

Order was pronounced in the open court on the date mentioned on the captioned page.

Sd/- Sd/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER

DATED: 30th June, 2015 JJ:2306

Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR Assistant Registrar