1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR J U D G M E N T INCOME TAX APPEAL No. 56 of 2006 C.I.T. AJMER Vs. BASANTI LAL MUNDRA Date of Judgment : 16.5.2008 PRESENT HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI KISHAN SWAROOP CHAUDHARI,J. Mr.K.K.Bissa, for the appellant. BY THE COURT : (PER HON'BLE GUPTA,J.) This appeal is filed by the Revenue against the judgment dated 4.11.2004 upholding the order of the learned Commissioner. The appeal was admitted on 10.5.2006 by framing the following substantial question of law:- “(i)-Whether in the facts and circumstances of the case, the Tribunal was justified in dismissing the appeal only on the ground that as per the circular of Central Board of Direct Taxes that department may not file any appeal if the tax effect in the appeal is less than 1 lacs?” Arguing the appeal, learned counsel for the appellant-Revenue relied upon judgment of this Court in case of C.I.T. Vs. Rajasthan Patrika Ltd. reported in 258 ITR 300, which in turn has considered the earlier judgment of Hon'ble the Supreme Court in the 2 case of C.I.T. Vs. Hero Cycles P.Ltd. reported in 228 ITR 463, and had also considered still other judgment of Hon'ble the Supreme Court in Tamil Nadu Industrial Investment Corporation Ltd. Vs. C.I.T. reported in 237 ITR 889. By relying on the aforesaid two judgments in Rajasthan Patrika Ltd.'s case, and Hero Cycles P.Ltd.'s case, it is sought to be contended that the circulars are mere administrative instructions, and where in spite of these administrative instructions, if the department prefers to file an appeal, or make a reference to the High Court, the appeal of the reference should not be dismissed, while according to learned counsel, learned Tribunal has dismissed the appeal substantially on that count, though purportedly has written one sentence about having examined the issue on merits also. Then it is contended that the impugned order is liable to be set aside. We have gone through the two judgments in Hero Cycles P.Ltd.'s case and Rajasthan Patrika Ltd.'s case. There is no dispute about the legal proposition propounded therein. In that view of the matter, it is clear that notwithstanding the fact of this circular, if the appeal is filed, the circular doesn't bind the Tribunal or the High Court, so as to require the appeal to be dismissed. However, in view of the small amount involved, and in view of the fact, that only one line 3 has been observed by the learned Tribunal, about having examined the merits, instead of prolonging the litigation by remanding it back to the learned Tribunal for such a small amount, we thought it more appropriate to examine the case of the Revenue on merits ourselves. From that standpoint, learned counsel for the Revenue took us through the order of the Assessing Officer as well as the order of the learned Commissioner. By reading of the order of the learned Commissioner, it was contended that the learned Commissioner has set off the amounts of Rs.17,001/-, Rs.45,000/- and Rs.30,800/- against the residual disclosure/surrender made by the assessee in the amount of Rs.5,47,343/-, while there is no provision for setting off against such disclosure/surrender. We have considered the submission, and find that the additions made by the Assessing Officer with respect to some of the amounts have been upheld by the learned Commissioner, while with respect to Rs.17,001/- it has been set aside. So far as setting off is concerned, in our view, the user of the expression “set off”, is, in the circumstances of the case, a total misnomer on the part of the learned Commissioner, inasmuch as, as appears from the order of the learned Commissioner that apart from surrendering a sum of Rs.76.14 lacs by the assessee, 4 representing possible assets from expenditure of the entire family, consisting of three sons, his wife, investment in the property in the name of his wife, in the stock of Basant Textiles, the marriage expenses etc., in addition to it a sum of Rs.5,47,343/- was surrendered under unspecified head to cover, and make available for the department to be taken into account for any other additions, which were sustained by the department in hands of the assessee by using the expression “on account of unspecified assets/investments/expenses to be identified later on. Thus, as a matter of fact, it was not a matter of set off, but was a matter of later identification of the said unspecified assets/investments/expenses, as has been found by the department to be liable to be added, and as the things have come up, even after this subsequent identification, a substantial amount of Rs.4,79,178/- still remains pending residual amount voluntarily surrendered. In that view of the matter, it cannot be said that the learned Commissioner was in error in treating these amounts, which represented the additions upheld by him, as representing unspecified assets/investments/expenses, identified later on by using an erroneous expression of setting off. Thus, having examined the matter on merits, in our view, the order of the learned Commissioner does not suffer from any error, requiring interference. Resultantly, answering the question as framed in negative, and in favour of the Revenue, it is held 5 that the Tribunal was not justified in dismissing the appeal only on the ground that as per circular of the CBTD, the department may not file appeal if the tax effect in the appeal is less than specified amount, but then after examining the matter on merits, the order of the learned Commissioner is upheld. Consequently, though for different reasons, the appeal is dismissed. (KISHAN SWAROOP CHAUDHARI),J. (N.P.GUPTA),J. /tarun/