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TMI Blog2015 (8) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... brought to our notice the judgment dated 11th January 2011 rendered by this Court in ITA Nos.95 and 168 of 2010 passed in the case of the respondent assessee itself on the very same issue concerning the assessment years 2000-2001, 2001-2002 and contended that in those appeals filed by the Revenue, the orders passed by the Commissioner of Income Tax (Appeals) and the Tribunal were set aside and the matters were remitted to the Assessing Officer to decide the matter afresh. Therefore, he submitted that these appeals can also be disposed of with similar directions. 3. However, the learned Senior Counsel appearing for the respondent assessee brought to our notice Instruction No.5/2014 dated 10th July, 2014, issued by the Central Board of Direct Taxes fixing Rs. 10,00,000/- as the monetary limit for maintaining an appeal under Section 260A. According to him, in the light of the said Instruction and in view of the fact that the tax effect involved in these appeals is less than the limit prescribed in Instruction No.5/2014, they are not maintainable and therefore should be dismissed. In support of this plea, the learned Senior Counsel placed reliance on the judgments of the Bomba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in the contention raised by counsel for the assessee that having regard to the Instruction No.5/2014 dated 10th July 2014, the appeals cannot be maintained. 7. Instruction No.5/2014, a copy of which was made available to us, was issued in supercession of Instruction No.3/2011 issued on 9.2.2011. Paragraphs 3 and 11 of the Instruction No.5/2014, being relevant for the purpose of this judgment, reads thus: "3. Henceforth appeals shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: Sl. No. Appeals in Income Tax matters Monetary Limit (in Rs.) 1 Before Appellate Tribunal 4,00,000/- 2 U/s 260A before High Court 10,00,000/- 3 Before Supreme Court 25,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. This instruction will apply to appeals filed on or after 10th July, 2014. However, the cases where appeals have been filed before 10th July, 2014 will be governed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in our view, is consistent with the language and spirit of the Instruction making the same applicable with reference to the date of filing the appeal and not with reference to the assessment year in relation to which the appeal was filed. 12. Second judgment of the Bombay High Court in the case of Commissioner of Income Tax v. Pithwa Engg. Works (2005) 276 ITR 519 was also rendered in the context of Instruction No.1979 dated 27th March 2000. In that case, the contention raised by the Revenue was that the Instruction was not applicable to old referred cases. This contention of the Revenue was overruled by the Bombay High Court by holding thus: "5. One fails to understand how the Revenue can contend that so far as new cases are concerned, the circular issued by the Board is binding on them and in compliance with the said instructions, they do not file references if the tax effect is less than Rs. 2 lakhs. But the same approach is not adopted with respect to the old referred cases even if the tax effect is less than Rs. 2 lakhs. In our view, there is no logic behind this approach. 6. This Court can very well take judicial notice of the fact that by passage of time, money value ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject, operative at the time when such appeal was filed." 15. The language of the Instruction, as we have already held in the context of Instruction No.5/2014, is plain and clear that it applied only to appeals filed on or after 15th May 2008, when the circular was issued. Despite the clear language of the Instruction, Bombay High Court appears to have referred to Instruction issued by the Board on 5th June, 2007 and held thus: "7. One fails to understand how the Revenue, on the face of the above clear instructions of the CBDT, can contend that the circular dt. 15th May, 2008 issued by the CBDT is applicable to the cases filed after 15th May, 2008 and in compliance thereof, they do not file appeals, if the tax effect is less than Rs. 4 lakhs; but the said circular is not applicable to the cases filed prior to 15th May, 2008 i.e. to the old pending appeals, even if the tax effect is less than Rs. 4 lakhs. In our view, there is no logic behind this belief entertained by the Revenue. 8. This Court can very well take judicial notice of the fact that by passage of time money value has gone down, the cost of litigation expenses has gone up, filing of cases at the instance of Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Gupta (2010) 327 ITR 619 rendered in the context of the assessment year 2000-2001 and the judgment of the Madras High Court in Commissioner of Income Tax v. Nagaraja Rao and Others (2009) 318 ITR 422 (Mad), rendered in the context of the assessment year 1991- 1992 and Instruction No.1979 dated 27th March 2000. These judgments were rendered basically following the earlier judgments of the Bombay High Court which, as we have already held, cannot be followed. 18. Sum and substance of the above discussion is that Instruction No.5/2014 issued on 10th July 2014, cannot be pressed into service in respect of appeals filed prior to 10th July 2014 and such appeals are governed by instructions on this subject operative at the time when the appeals were filed. 19. Having thus seen the effect of the Instruction No.5/2014 that are discussed above, we will have to see the appeals when these appeals were filed. We find that ITA 153/2001 and 50/2002 concerning the assessment years 1991-1992 and 1992-1993 were filed on 9.10.2001. ITA 171/2001 concerning the assessment year 1994-95 was filed on 10.10.2001. ITA 30/07 concerning the assessment year 2002-2003 was filed on 14.12.2006. ITA Nos.172/08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the assessee. 22. Having thus cleared the ground, we shall now deal with the merits of the matter. It is seen that the very same issue is held in favour of the Revenue in the judgment ITA Nos.95 & 168/2010. That judgment reads thus: "The question raised is whether the Tribunal was justified in confirming the order of the first appellate authority holding that the respondent assessee is eligible for deduction of commission paid to agents for sale of liquor to Kerala State Beverages Corporation Ltd. We have heard standing counsel for the Revenue which filed the appeals and also Adv.Sri.T.M.Sreedharan counsel for the respondent assessee. 2. Standing counsel has relied on a Division Bench judgment of this Court reported in Commissioner of Income Tax v. Premier Breweries Ltd. (Ker.) [2005] 279 ITR 51 (Ker)] wherein this Court held that the Tribunal should allow the claim only on being satisfied about the genuineness of the claim and the purpose for which commission was paid. The contention of the Revenue is that liquor distribution in the State is the monopoly of the sole marketing agency, which is the KSBC, a wholly owned Kerala Government company. Accordingly, there is no s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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