Income Tax Appellate Tribunal - Bangalore
The Assistant Commissioner Of Income ... vs Shri Vinod M Sherlekar , Mangalore on 25 June, 2021
MPNo.117/Bang/2020
Vinod M Sherlekar, Mangalore
IN THE INCOME TAX APPELLATE TRIBUNAL
"B''BENCH: BANGALORE
BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER
AND
SMT. BEENA PILLAI, JUDICIAL MEMBER
M.P. No.117/Bang/2020
(Arising out of ITA No.2758/Bang/2017)
Assessment Year: 2013-14
ACIT Circle-1(1) & TPS Shri Vinod M. Sherlekar
Mangalore No.4-1-103,
Veenu Constructions
Vs. Ballalbagh, M.G. Road
Mangalore
PAN No.AHMPS4701M
APPELLANT RESPONDENT
Appellant by : Smt. R. Premi, D.R.
Respondent by : Shri Shree Hari Kutsa, A.R.
Date of Hearing : 19.03.2021
Date of Pronouncement : 25.06.2021
ORDER
PER B.R. BASKARAN, ACCOUNTANT MEMBER:
The revenue has filed this miscellaneous application seeking recall of order dated 26.6.2020 passed by the coordinate bench in the revenue's appeal No.2758/Bang/2017.
2. It is stated in the miscellaneous application that the Tribunal has dismissed the appeal of the revenue on the ground that the tax effect involved in the appeal filed by the revenue is less than Rs.50 lakhs. It is further stated that the tax effect involved in respect of the issues disputed by the revenue is more than Rs.50 lakhs. The MP No.117/Bang/2020 Vinod M Sherlekar, Mangalore Page 2 of 5 revenue has also filed a letter written by A.O., wherein it is stated that the relief granted by CIT(A) is Rs.1,72,63,459/- and the tax effect involved thereon is Rs.53,34,409/- and the same constitutes a mistake apparent from record. Accordingly, it is prayed that that order of the Tribunal be recalled.
3. We heard the parties and perused the record. For the sake of convenience, we have tabulated below the addition made by A.O. and the relief granted by the CIT(A).
Addition Para Relief granted
Sl.No. Details of addition made by A.O No.in by LdCIT(A)
(Rs.) CIT(A)'s (Rs.)
order
1 Investment in jewellery 10,21,850/- 4.1 10,21,850/-
2 Investment in Ujire property 20,00,000/- 5.3 20,00,000/-
3 Telescoping benefit for 25,00,000 6.1 11,58,680/-
Shakthi Nagar property
4. Totalling mistake of Shakthi 5,00,000/-
Nagar property
4 Padukodi land 1,25,00,000/- 7.4 1,25,00,000/-
5 Rental income 82,929/- 9.3 82,929/-
Total 1,81,04,779/- 1,72,63,459/-
4. We shall now reproduce the grounds raised by the revenue before the Tribunal:-
1. "Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in allowing the addition made on account of undisclosed investment in jewellery of Rs.10,21,850/- and investment Ujire property of Rs.20,00,000/- declared by the assessee u/s 132(4) based on the evidences found?
2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in allowing the claim for telescoping effect not claimed by the assessee during assessment proceeding?
3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not considering the merits of the case and ignoring the facts reflected in the assessment order?MP No.117/Bang/2020
Vinod M Sherlekar, Mangalore Page 3 of 5
4. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not considering the fact that the addition on account of undisclosed investment in Padukodi land of Rs.1,25,00,000/- was made based on the agreement found during the search which clearly specifies the total consideration?
5. Any other grounds that may arise at the time of hearing."
5. A perusal of the above grounds urged by the revenue would show that the revenue is contesting the order of Ld CIT(A) in respect of following issues only:-
Ground No.3 and 5 are general in nature Ground No.1 is on the following issues:-
Investment in Jewellery - 10,21,850 Investment in Ujire Property - 20,00,000 Ground No.2 relates to the telescoping Benefit given for Shakthi Nagar Property - 11,58,680 Ground No. 5 relates to Investment in Padukodi Land - 1,25,00,000
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Total 1,66,80,530
============
As per Circular No.3/2018 dated 11.07.2018 issued by CBDT, the issues contested by the revenue alone needs to be taken into consideration for computing tax effect. In this regard, paragraph no.4 of the above said circular is relevant and the same reads as under:-
"4. For this purpose, 'tax effect' means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as 'disputed issues').
Further, 'tax effect' shall be tax including applicable surcharge and cess. However, the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case MP No.117/Bang/2020 Vinod M Sherlekar, Mangalore Page 4 of 5 the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against."
In the instant case, the total income computed by the assessing officer was Rs.1,22,96,445/-. The aggregate amount of the issues contested by the revenue is Rs.1,66,80,530/- and if the same is removed, then the total income shall result in a loss figure. The total amount of demand raised in the assessment order is Rs.32,80,129/-, which is below the monetary limit of Rs.50.00 lakhs.
6. It is also stated that in cases where returned loss is reduced or assessed as income, the tax effect would include notional tax computed on the "disputed additions". Accordingly, we have computed the notional tax effect on the amount of Rs.1,66,80,530/- as under:-
For Rs. 10,00,000/- - 1,30,000
For Rs.1,56,80,530/- - 47,04,159
---------------
48,34,159
Education cess @ 3% 1,45,025
---------------
49,79,184
=========
We notice that the tax effect is less than the prescribed monetary limit of Rs.50.00 lakhs under this computation also. Hence we do not find any infirmity in the order passed by the Tribunal. Accordingly, we do not find any merit in the miscellaneous petition filed by the revenue.
MP No.117/Bang/2020Vinod M Sherlekar, Mangalore Page 5 of 5
6. In the result, the miscellaneous application filed by the revenue is dismissed.
Order pronounced in the open court on 25th June, 2021 Sd/- Sd/-
(Beena Pillai) (B.R. Baskaran)
Judicial Member Accountant Member
Bangalore,
Dated 25th June, 2021.
VG/SPS
Copy to:
1. The Applicant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The DR, ITAT, Bangalore.
6. Guard file
By order
Asst. Registrar,
ITAT, Bangalore.