Tca/4/2011 Of Commisisoner Of Income Tax-I v. Shri Badrashyam H Kothari

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.11.2018 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MR.JUSTICE N.SATHISH KUMAR Tax Case (Appeal) No.4 of 2011 The Commissioner of Income Tax - I,Chennai.... Appellant-vs- Shri. Badrashyam H.Kothari... Respondent Tax Case (Appeal) filed under Section 260-A of the IncomeTax Act, 1961 against the order of the Income-tax AppellateTribunal, “A” Bench, Chennai, dated 23.07.2010, passed inI.T.A.No.1871/Mds/2008 for the assessment year 2005-06. asagainst the Order of the Commissioner of Income Tax (Appeals)-III, Chennai dated 12/06/2008 made in Appeal No. (IT(A) –III/CHE/315/07-08 for the Assessment Year 2005-06 and againstthe Order of the Assistant Commissioner of Income Tax, Chennaiin PAN/GIR.No. AGJPK 7393K order dated 19/11/2007 for theAssessment Year 2005-06. For Appellant For Appellant:Mr.Karthik RanganathanStanding CounselFor Respondent:Mr.R.Venkatanarayanan for M/s.Subaraya Aiyar Padmanabhan JUDGMENT (Judgment was delivered by T.S.Sivagnanam, J.) This appeal by the appellant/Revenue is directed againstthe order of the Income-tax Appellate Tribunal, “A” Bench,Chennai, dated 23.07.2010, passed in I.T.A.No.1871/Mds/2008 forthe assessment year 2005-06. 2.Heard Mr.Karthik Ranganathan, learned Standing Counselfor the appellant/Revenue and Mr.R.Venkatanarayanan for https://hcservices.ecourts.gov.in/hcservices/ M/s.Subaraya Aiyar Padmanabhan, learned counsel for therespondent/assessee. 3.This Appeal has been admitted on 24.02.2011, on thefollowing substantial questions of law:- “1.Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal was right in only remitting the issue tothe file of the Assessing Officer for re-adjudication after giving a finding that theassessee had not maintained Books of Accounts as perthe provisions of Section 40AA(2) and the two AuditReports u/s 44AB filed did not deal with the tradingin shares and units, instead of setting aside theorder of the Commissioner of Income Tax (appeals)and restoring the order of the Assessing Officer? 2.Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal was right in first recording a conclusionthat the claim of the assessee that he was doing thebusiness in purchase and sale of shares and units ofmutual fund stood substantiated and thereafter goingto find that the assessee had not satisfied thestatutory requirements for claiming the businessloss in question instead of recording a conclusionthat the assessee's claim could not be substantiatedfor reasons mentioned by the Tribunal? 3.Without prejudice to the preceding questions, whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal was right in not making it clear that theissue regarding the nature of the loss was left opento be decided in the course of re-adjudication,while remitting the matter to the file of theAssessing Officer?" 4.We have perused the Order of Assessment as well as theOrder passed by the Commissioner of Income Tax and we find thatthe tax effect in this appeal is lesser than the threshold limitmentioned in Circular No.3 of 2018, dated 11.07.2018, issued bythe Central Board of Direct Taxes, which fixes the monetarylimit as Rs.50,00,000/- for the Department to pursue the matter.Furthermore, the Revenue has not been able to point out anydistinguishing features, by which the Circular No.3 of 2018,dated 11.07.2018, cannot be applied. 4.We have perused the Order of Assessment as well as theOrder passed by the Commissioner of Income Tax and we find thatthe tax effect in this appeal is lesser than the threshold limitmentioned in Circular No.3 of 2018, dated 11.07.2018, issued bythe Central Board of Direct Taxes, which fixes the monetarylimit as Rs.50,00,000/- for the Department to pursue the matter.Furthermore, the Revenue has not been able to point out anydistinguishing features, by which the Circular No.3 of 2018,dated 11.07.2018, cannot be applied. 5.Thus, for the above reasons, the Revenue cannot pursuethis Appeal in view of the low tax effect. Hence, the Appeal isdismissed and the Substantial Questions of Law, framed forconsideration, are left open. No costs. The Revenue is atliberty to seek for restoration of appeal if at a later point oftime, it is found that the tax effect is above the thresholdlimit or to fall under the exceptional clauses mentioned in theCircular. Sd/- Assistant Registrar(CS-IV) //True Copy// Sub Assistant RegistrarcseTo1.The Income-tax Appellate Tribunal, “A” Bench, Chennai.2.The Commissioner of Income Tax, Company Circle II, Chennai 34.+1cc to Mr. Subbaraya Aiyar, Advocate, S.R.No. 80767Tax Case (Appeal) No.4 of 2011SPD(CO)GN(19/12/2018)