The Commissioner Of Income Tax,Chennai v. Shri G.thiagarajan

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 05.12.2018 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MR.JUSTICE N.SATHISH KUMAR Tax Case Appeal Nos.675 to 677 of 2011 The Commissioner of Income Tax,Chennai. ...Appellant in all the appeals -vs- Shri G.Thiagarajan,Prop.Shri Thiagarajan Enterprises,555/1, 15[th] Avenue, Ashok Nagar,Chennai – 600 083....Respondent in all the appeals Tax Case Appeals filed under Section 260A of the IncomeTax Act, 1961 against the common order of the Income TaxAppellate Tribunal 'A' Bench, Chennai, dated 29.06.2007 passedin I.T.A Nos.291 to 293/Mds/2004, for the assessment years 1999-2000, 2000-01, 2001-02 respectively. Against the Order of the Order of the Commissioner of Income Tax(Appeals) – VIII, Chennai dated 21/11/2003 passed in ITA.No.12,13,14/2003-2004. against the Order of the Assistant Commissioner of IncomeTax, Circle V, (I/c) Chennai 34, dated 13/03/2003 for theAssessment Year 2001-2002 and against the Order of the Assistant Commissioner of IncomeTax Circle V, (i/c) Chennai 34 dated 13/03/2003 for theAssessment Year 2000-2001 and against the Order of the Assistant Commissioner of IncomeTax Circle V (i/c), Chennai, dated 13/03/2003 for the AssessmentYear 1999-2000. https://hcservices.ecourts.gov.in/hcservices/ JUDGMENT [Judgement of the Court was delivered by T.S.Sivagnanam, J.] These Tax Case Appeals are filed under Section 260A ofthe Income Tax Act, 1961 against the common order of the IncomeTax Appellate Tribunal 'A' Bench, Chennai, dated 29.06.2007passed in I.T.A Nos.291 to 293/Mds/2004, for the assessmentyears 1999-2000, 2000-01, 2001-02 respectively. 2.Heard M/s.V.Pushpa, learned Counsel for the Revenueand Mr.G.Thiagarajan, learned Counsel for the assessee. 3.These Appeals have been admitted on 27.03.2012, on thefollowing Substantial Questions of Law: "(i)Whetheronthefactsandcircumstances of the case, the Income TaxAppellate Tribunal is right in holding thatdeleting the addition made on account of cashcredit on the ground that the decision of theHon'ble Supreme Court in the case of Kale KhanMohd Hanif Vs. Commissioner of Income Taxreported in 50 ITR Page 1 would apply only tocredits introduced by way of a loan and not tocredits introduced by way of creditors?(ii)Whetheronthefactsandcircumstances of the case, the Income TaxAppellate Tribunal is right in holding thatSection 68 of the Income Tax Act was notapplicable in respect of trade creditors,addition to capital and fresh investments etc.,even though the Assessing Officer had foundthat such trade creditors were bogus? (iii)Whether on the facts andcircumstances of the case, the Income TaxAppellate Tribunal is right in law in notconsidering the judgement of the Hon'bleSupreme Court in the case of the CBI Vs. Shuklareported in (1998) 3 SCC page 410 wherein itwas held “if the word 'account' is to be givena wider meaning to include a record offinancial transaction, reckoned a bookcontaining statement of monetary transactions,would attract the definition of books ofaccount under Section 34 of the Act? (iv)Whetheronthefactsandcircumstances of the case, the Income TaxAppellate Tribunal is right in law in notconsidering the fact that the book containingthe statement of monetary transaction wouldattract the definition of books of accountespecially when the assessee had admitted thatthe profit and loss account and the balancesheet were prepared based on monetarytransactions recorded in the computer systemthough incomplete? (iv)Whetheronthefactsandcircumstances of the case, the Income TaxAppellate Tribunal is right in law in notconsidering the fact that the book containingthe statement of monetary transaction wouldattract the definition of books of accountespecially when the assessee had admitted thatthe profit and loss account and the balancesheet were prepared based on monetarytransactions recorded in the computer systemthough incomplete? (v)Whetheronthefactsandcircumstances of the case, the Income TaxAppellate Tribunal is right in law in notconsidering a specific ground raised foradjudication namely ground No.4.1 which was notdealt with by the Tribunal and therefore nonconsideration of the same would give rise to asubstantial question of law as held by the HighCourt of Madras in the case of M/s.South IndiaSurgicals Company Pvt. Ltd., Vs. ACIT reportedin 263 ITR page 5?” 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 these appeals are lesser than the thresholdlimit mentioned in Circular No.3 of 2018, dated 11.07.2018,issued by the Central Board of Direct Taxes, which fixes themonetary limit as Rs.50,00,000/- for the Department to pursuethe matter. Furthermore, the Revenue has not been able to pointout any distinguishing features, by which the Circular No.3 of2018, dated 11.07.2018, cannot be applied. 5.Thus, for the above reasons, the Revenue cannot pursuethese Appeals in view of the low tax effect. Hence, theseAppeals are dismissed and the Substantial Questions of Law,framed for consideration, are left open. No costs. TheRevenue is at liberty to seek for restoration of appeal, if at alater point of time, it is found that the tax effect is abovethe threshold limit. Sd/-Assistant Registrar //True Copy// mrm/abr Sub Assistant Registrar https://hcservices.ecourts.gov.in/hcservices/ To 1.Income Tax Appellate Tribunal, Madras 'A' Bench. Madras 'A' Bench. 2.The Commissioner of Income Tax (Appeals), Chennai. Chennai. 3.The Assistant Commissioner of Income Tax, Circle V, Chennai-34. Circle V, Chennai-34. +1cc to Mr.M.Swaminathan, Advocate, S.R.No. 83444 T.C.A.No.675 to 677 of 2011NA(CO)GN(03/01/2019)