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ACIT, Central Circle-16(1), New Delhi Vs. 3 Com India Pvt. Ltd. Regus Eros Corporate Towers, Level 15, Nehru Place New Delhi
June, 10th 2015
                DELHI BENCH `H', NEW DELHI
     Before Sh. George George K, JM And Sh. N. K. Saini, AM
             ITA No. 5348/Del/2010 : Asstt. Year : 2004-05

ACIT, Central Circle-16(1),    Vs 3 Com India Pvt. Ltd.
New Delhi                         Regus Eros Corporate Towers,
                                  Level 15, Nehru Place
                                  New Delhi
                                  PAN : AAACZ1256G
(APPELLANT)                       (RESPONDENT)
                                    PAN No. AAAPG3416E
            Assessee by : Sh. Syed Nasir Ali, CITDR
            Revenue by : Sh. Vishal Kalra, Adv. & Sh. S.S. Tomar, Adv.

Date of Hearing : 2. 06.2015        Date of Pronouncement : 03.06.2015



      This appeal by the Department is directed against the order
dated 29.09.2010 of the Ld. CIT(A)-XX, New Delhi.

2.    The grounds raised in the appeal of the Department read as

     "The ld. CIT(A) has erred on facts and in law by deleting the
     disallowance of depreciation of Rs. 12,28,236/- made since
     the assessee failed to prove the existence and use of certain
     plant and machinery comprising demonstration equipments
     ignoring that.
                                  2                    ITA No.5348/Del/2010

     (i)   The assessee had failed to provide the address of the
           premises where the demonstration equipments were
     (ii) The assessee had failed to explain the nature of business
           use to which the demonstration equipments were put
           during the year.
     (iii) As per the observations of the auditors in the audit
           report, the management had not got the equipments
           physically verified at the year end.
     (iv) No physical verification could be got done by the
           assessee during the assessment proceedings despite
           specific requisition to this effect."

3.    During the course of hearing, the Learned counsel for
the assessee at the very outset stated that the tax effect in
this appeal is less than Rs.4,00,000/-, therefore, the
department ought not to have filed this appeal in view of the
circular issued by the CBDT and the provisions contained in
Section 268A of the Income Tax Act, 1961 (hereinafter to
be referred as the Act).

4.    On the other hand, the ld. D.R., although supported the
order of the Assessing Officer, but could not controvert this
fact that tax effect in this appeal is less than Rs.4,00,000/-.

5.    After considering the submissions of the ld. D.R. and
the material on record, it is noticed that Section 268A has
been inserted by the Finance Act, 2008 with retrospective
                             3                 ITA No.5348/Del/2010

effect from 01/04/99. The provisions contained in section
268A read as under:

   "268A. (1) The Board may, from time to time, issue
   orders, instructions or directions to other income-tax
   authorities, fixing such monetary limits as it may
   deem fit, for the purpose of regulating filing of
   appeal or application for reference by any income-
   tax authority under the provisions of this Chapter.

   (2) Where, in pursuance of the orders, instructions or
   directions issued under sub-section (1), an income-
   tax authority has not filed any appeal or application
   for reference on any issue in the case of an assessee
   for any assessment year, it shall not preclude such
   authority from filing an appeal or application for
   reference on the same issue in the case of--

   (a) the same assessee for any other assessment
       year; or
   (b) any other assessee for the same or any other
   assessment year.
   (3) Notwithstanding that no appeal or application for
   reference has been filed by an income-tax authority
   pursuant to the orders or instructions or directions
   issued under sub-section (1), it shall not be lawful
   for an assessee, being a party in any appeal or
   reference, to contend that the income-tax authority
   has acquiesced in the decision on the disputed issue
   by not filing an appeal or application for reference
   in any case.
                               4                 ITA No.5348/Del/2010

     (4) The Appellate Tribunal or Court, hearing such
     appeal or reference, shall have regard to the orders,
     instructions or directions issued under sub-section
     (1) and the circumstances under which such appeal
     or application for reference was filed or not filed in
     respect of any case.

     (5) Every order, instruction or direction which has
     been issued by the Board fixing monetary limits for
     filing an appeal or application for reference shall be
     deemed to have been issued under sub-section (1)
     and the provisions of sub-sections (2), (3) and (4)
     shall apply accordingly.]"

6.    It is not in dispute that the Board's instruction or
directions issued to the income-tax authorities are binding
on those authorities, therefore, the department ought not to
have filed the appeal in view of the above said provisions
mentioned in section 268A of the Act since the tax effect in
the instant case is less than the amount prescribed for not
filing the appeal.

7.    It is noticed that the CBDT has issued Instruction No.5
of 2014 dated 10.07.2014, by which the CBDT has revised
the monetary limit to Rs. 4,00,000/-    for filing the appeal
before the Tribunal.

8.    Keeping in view the CBDT Instruction No.5 of 2014
dated 10.07.2014 and also the provisions of Section 268A of
                               5                  ITA No.5348/Del/2010

Income Tax Act, 1961, we are of the view that the Revenue
should not have filed the instant appeal before the Tribunal.
While taking such a view, we are fortified by the following
decisions of Hon'ble Punjab & Haryana High Court:-

     1. CIT v Oscar Laboratories P. Ltd (2010) 324 ITR
     115 (P&H)
     2. CIT v Abinash Gupta (2010) 327 ITR 619 (P&H)
     3. CIT v Varindera Construction Co. (2011) 331 ITR
     449 (P&H)(FB)

9.    Similarly the Hon'ble Delhi High Court in the case of
CIT v. Delhi Race Club Ltd. in ITA No.128/2008, order
dated 03.03.2011 by following the earlier order dated
02.08.2010 in ITA No.179/1991 in the case of CIT Delhi-III
v. M/s. P.S. Jain & Co. held that such circular would also be
applicable to pending cases.

10. From the ratio laid down by the Hon'ble Delhi High
Court, it is clear that the instructions issued in the Circulars
by CBDT are applicable for pending cases also. Therefore,
by keeping in view the ratio laid down in the aforesaid
referred to cases, we are of the considered view that
Instruction No.5/14 dated 10.07.2014 issued by the CBDT
are applicable for the pending cases also and in the said
                             6                 ITA No.5348/Del/2010

instructions, monetary tax limit for not filing the appeal
before the ITAT is Rs. 4.00 lakhs.

11. In view of the above, without going into merits of the
case, we dismiss the appeal filed by the Revenue.

12. In the result, appeal of the Revenue stand dismissed.
(Order Pronounced in the Court on     03/06/2015).

       Sd/-                                  Sd/-
  (George George K)                     (N. K. Saini)
Dated: 03/06/2015
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
                                        ASSISTANT REGISTRAR
                                          7                             ITA No.5348/Del/2010

                                                     Date     Initial
1.    Draft dictated on                          02/06/2015
2.    Draft placed before author
3.    Draft proposed & placed before the
      second member
4.    Draft discussed/approved by Second
5.    Approved Draft comes to the Sr.PS/PS
6.    Kept for pronouncement on
7.    File sent to the Bench Clerk
8.    Date on which file goes to the AR
9.    Date on which file goes to the Head Clerk.
10.   Date of dispatch of Order.
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