Commissioner of Income-tax v. Dr. C. T. Kiruba
[Citation -2015-LL-0119-7]

Citation 2015-LL-0119-7
Appellant Name Commissioner of Income-tax
Respondent Name Dr. C. T. Kiruba
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 19/01/2015
Assessment Year 1989-90,1990-91,1991-92,1992-93,1993-94,1994-95,1995-96,1996-97,1997-98,1998-99,01/04/1999-27/10/1999
Judgment View Judgment
Keyword Tags residential building • cost of construction • valuation report • audit objection • monetary limit • revenue audit • block period • tax effect
Bot Summary: In the case on hand, the tax liability pertains to the additions made by the Assessing Officer on account of cost of renovation and construction of nurses quarters. The preliminary objection of the assessee and the tax liability under the above heads is as under: Preliminary objection on maintainability of Department's tax case appeal: Instruction No. 2 of 2005, dated October 24, 2005, read with Instruction No. 5 of 2007, dated July 16, 2007, fixed the monetary limit to prefer a tax case appeal only if the tax effect exceeds Rs. 4 lakhs. The assessee submits that the assessee does not fall within any of the exceptions provided in the instruction mandating the Department to prefer an appeal. The total tax effect excluding interest is as follows: Amount in Description Rs. Renovation Difference between Rs. 1,71,150 and Rs. 28,850 2 lakhs Cost of construction of nurses qua rters Difference between Rs. 2,50,000 admitted by the assessee and Rs. 2,59,700 5,09,700 added by the Assessing Officer Total Income 2,88,550 Income-tax at 60 per cent. 17,313 Total Tax effect 1,90,443 The learned counsel for the assessee also pleaded that the case of the assessee does not fall within the exceptions specified in Instruction No.1979 issued by the Central Board of Direct Taxes on March 27, 2000, where irrespective of revenue effect the matter should be contested by the Department. The learned standing counsel for the Revenue is not disputing the fact that the tax effect in the present case is less than Rs. 4 lakhs and that the assessee's case does not fall within the exceptions specified in Instruction No. 1979, dated March 27, 2000. Considering the circulars issued by the Central Board of Direct Taxes and the tax effect involved in the case on hand, this court is not inclined to entertain these appeals.


JUDGMENT judgment of court was delivered by R. Sudhakar J.-The Revenue has filed these appeals challenging order of Income-tax Appellate Tribunal "D" Bench, Chennai, dated October 27, 2006, made in I. T. (SS) A. Nos. 87/Mds/2004 and 215/Mds/ 2003 for block period April 1, 1989, to October 27, 1999, and same were admitted on following questions of law: "(a) Whether Tribunal is right in deleting addition of Rs. 2 lakhs made on account of renovation of residential building, including wooden work, which was admitted by assessee himself as cost of investment? (b) Whether Tribunal is right in deleting addition of Rs. 5,09,700 made in construction of quarters for nurses which was based on Departmental valuation report and is valid in view of provisions of section 142A of Income-tax Act? (c) Whether Tribunal is right in deleting interest charged under section 158BFA(1) as return for block period had been filed belatedly, especially when charging of interest is mandatory? (d) Whether Tribunal is right in law in not considering sworn statement dated October 27, 1999, given by assessee when search under section 132 of Act had taken place?" Even though these appeals were admitted on questions of law, referred to supra, we are not inclined to entertain these appeals in view of preliminary objection made by learned counsel for respondent that monetary limit to prefer appeal is pegged at Rs. 4,00,000 by Central Board of Direct Taxes, vide Instruction No. 2 of 2005, dated October 24, 2005, read with Instruction No. 5 of 2007, dated July 16, 2007. In case on hand, tax liability pertains to additions made by Assessing Officer on account of cost of renovation and construction of nurses quarters. preliminary objection of assessee and tax liability under above heads is as under: Preliminary objection on maintainability of Department's tax case appeal: Instruction No. 2 of 2005, dated October 24, 2005, read with Instruction No. 5 of 2007, dated July 16, 2007, fixed monetary limit to prefer tax case appeal only if tax effect exceeds Rs. 4 lakhs. assessee submits that assessee does not fall within any of exceptions provided in instruction mandating Department to prefer appeal. total tax effect excluding interest is as follows: Amount in Description Rs. Renovation Difference between Rs. 1,71,150 and Rs. 28,850 2 lakhs Cost of construction of nurses qua rters Difference between Rs. 2,50,000 admitted by assessee and Rs. 2,59,700 5,09,700 added by Assessing Officer Total Income 2,88,550 Income-tax at 60 per cent. 1,73,130 Add: Surcharge at 10 per cent. 17,313 Total Tax effect 1,90,443 learned counsel for assessee also pleaded that case of assessee does not fall within exceptions specified in Instruction No.1979 issued by Central Board of Direct Taxes on March 27, 2000, where irrespective of revenue effect matter should be contested by Department. relevant portion of said instruction reads as under: "3. Adverse judgments relating to following should be contested irrespective of revenue effect: (i) Where Revenue audit objection in case has been accepted by Department. (ii) Where Board's order, notification, instruction or circular is subject-matter of adverse order. (iii) Where prosecution proceedings are contemplated against assessee. (iv) Where constitutional validity of provisions of Act are under challenge." learned standing counsel for Revenue is not disputing fact that tax effect in present case is less than Rs. 4 lakhs and that assessee's case does not fall within exceptions specified in Instruction No. 1979, dated March 27, 2000. Considering circulars issued by Central Board of Direct Taxes and tax effect involved in case on hand, this court is not inclined to entertain these appeals. Accordingly, without going into merits of questions of law formulated, these appeals are dismissed as not maintainable. No costs. *** Commissioner of Income-tax v. Dr. C. T. Kiruba
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