The Commissioner Of Income Tax –12, Mumbai v. M/S. Elphinstone Cricket Club

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 909 OF 2011 The Commissioner of Income Tax –12, Mumbai ..... Appellant Vs. M/s. Elphinstone Cricket Club ..... Respondent None for the Appellant. Mr.Sanjiv M. Shah for the Respondent. CORAM : DR.D.Y.CHANDRACHUD &R.D. DHANUKA, JJ. P.C.: DATE : APRIL 25, 2012 This Appeal arises from a decision of the Income tax Appellate Tribunal dated 29 January 2010. The Assessment Year to which the appeal relates is A.Y.2004 – 05. The Appeal raises the following question of law : Whether on the facts and in the circumstances of the case, and in law the Hon’ble Tribunal was right in upholding the order of the CIT (A) holding that the forfeited amount of Rs. 12 lacs cannot be brought to tax in AY 2004-05 and accordingly deleting the addition. 2.The Learned Counsel appearing on behalf of the Assessee has submitted that the tax effect is less than Rs.10 lacs and hence the Appeal ought not to be entertained having regard to Instruction No.3 of 2011 issued by the Central Board of Direct Taxes. Our attention has been drawn to the decision of the Supreme Court in C.I.T. Central – III vs. Surya Herbal, Ltd. decided on 29 August 2011, which has been quoted in a Judgment of a Division Bench of this Court at Aurangabad in C.I.T. II Nashik vs. Varsha Dilip Kolhe (Tax Appeal No. 7 of 2010) decided on on 5 March 2012. The Supreme Court has observed thus :- “Liberty is given to the Department to move the High Court pointing out that the Circular dated 9[th ]February, 2011, should not be applied ipso facto, particularly, when the matter has a cascading effect. There are cases under the Income Tax Act, 1961, in which a common principle may be involved in subsequent group of matters or large number of matters. In our view, in such cases if attention of the High Court is drawn, the High Court will not apply the Circular ipso facto. For that purpose, liberty is granted to the Department to move the High Court in two weeks. The special leave petition is, accordingly disposed of.” 3.In the present case, the assessee had entered into a Leave and Licence Agreement on 1 November 1986 which was terminated on 1 July 1994. Upon termination of the agreement, the assessee forfeited the security deposit of Rs. 12 lacs. The amount was shown in the balance sheet in a suspense account. Hence, both the CIT (A) and the Tribunal held that the income, if any, could have been assessed in assessment year 1995 – 96, but there was no basis to justify the assessment of the amount in assessment year 2004 – 05. On these findings, we are of the view that no substantial question of law would arise from the finding. Moreover, having regard to the instructions of the C.B.D.T. and since the tax ITXA909_11 effect is less than Rs. 10 lacs, no case for entertaining the appeal is made out. 4.The appeal is accordingly dismissed. DR.D.Y.CHANDRACHUD, J. R.D. DHANUKA, J.