As per IT circular May 15’2008 if the same issue in respect of the same assessee for other assessment year department cannot file appeal if tax effect less than 4 lakh

IN THE INCOME TAX APPELLATE TRIBUNAL

“D” BENCH, MUMBAI

BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER, AND

SHRI R.S. PADVEKAR, JUDICIAL MEMBER

ITA no. 2197/Mum./2010

(Assessment Year: 2005–06)

Dy. Commissioner of Income Tax

Circle–8(3), Aayakar Bhavan

101, M.K. Road, Mumbai 400 020

………….………. Appellant

V/s

Rishabh Investments P. Ltd.

A–54, Marol MIDC, Andheri (E)

Mumbai 400 093

PAN – AAAC2228D

..…….………. Respondent

Revenue by: Mr. C.G.K. Nair

Assessee by: Mr. Kishore B. Phadke

Date of Hearing – 24.05.2012

Date of Order – 24.05.2012

O R D E R

PER J. SUDHAKAR REDDY

The present appeal preferred by the Revenue, is directed against impugned order dated 5th January 2010, passed by the Commissioner (Appeals)–XVIII, Mumbai, for assessment years 2005–06.

2. Before us, both the learned Representatives agree that the tax effect in the Revenue’s appeal is less than ` 3,00,000. As per CBDT Instruction no.3 of 2011, dated 9th February 2011, the appeal before the Appellate  Rishabh Investments P. Ltd. Tribunal can be filed by the Revenue, when the tax effect exceeds the monitory limit of ` 3,00,000.

3. The Hon'ble Bombay High Court in the case of CIT v/s Madhukar K. Inamdar (HUF), 318 ITR 149 (Bom.) held as follows:-

“The circular dated May 15, 2008 in general and paragraph (5) thereof in particular lay down that even if the same issue, in respect of the same assessee, for other assessment years is involved, the Department should not file appeal, if the tax effect is less than ` 4 lakhs. In other words, even if the question of law is of recurring nature, the Revenue is not expected to file appeals in such cases, if the tax impact is less than the monetary limit fixed by the Central Board of Direct Taxes. The Board has also issued a circular on June 5, 2007, directing the Department to examine all appeals pending before the court on a case to case basis with further direction to withdraw cases wherein the criteria of monetary limits as per the prevailing instruction are not satisfied, unless the question of law involved or raised in appeal or referred to the High Court for opinion is of a recurring nature required to be settled by the higher court. The circular makes it clear that on the date of issuance of the circular, prevailing instructions fixing monetary limit will hold good even for pending cases. The circular dated May 15, 2008 would be applicable to pending cases requiring the Department to withdraw cases wherein the tax effect is less than the prescribed monetary limits. The circular dated May 15, 2008, would be applicable to cases pending before the court either for admission or for final disposal and it is binding on the Revenue.”

4. Similar view was taken by the Hon'ble Jurisdictional High Court in the judgment in CIT v/s Pithwa Engineering Works, (2005) 276 ITR 519 (Bom.), and the Hon'ble Delhi High Court in M/s. P.S. Jain & Co., 335 ITR 591 (Del.). Applying the propositions laid down in these case laws to the facts of the present case, we dismiss the Revenue’s appeal.

5. In the result, Revenue’s appeal is dismissed.

Order pronounced in the open Court on 24th May 2012.

                                                        Sd/-                                     Sd/-

                                          R.S. PADVEKAR J.         SUDHAKAR REDDY

                                          JUDICIAL MEMBER   ACCOUNTANT MEMBER

MUMBAI, DATED: 24th May 2012

Rishabh Investments P. Ltd.

Copy to:

(1) The Assessee;

(2) The Respondent;

(3) The CIT (A), Mumbai, concerned;

(4) The CIT, Mumbai City concerned;

(5) The DR, “D” Bench, ITAT, Mumbai.

TRUE COPY

Pradeep J. Chowdhury

Sr. Private Secretary

BY ORDER

ASSISTANT REGISTRAR

ITAT, MUMBAI BENCHES, MUMBAI