ACIT,CIRCLE-34, KOLKATA V. MACHINERY AGENCIES INDIA, KOLKATA

ITA 2212/KOL/2024

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The case involves Machinery Agencies India, a partnership firm engaged in trading natural raw rubber and latex, which had its income tax return scrutinized by the Assessing Officer (AO). The AO made significant additions to the assessee's declared income, which were partly overturned by the CIT(A). The revenue appealed against the CIT(A)'s decision, arguing that the case fell under an exceptional clause despite the tax effect being below the monetary limit. The Tribunal dismissed the revenue's appeal, referencing a previous ITAT decision in favor of the assessee for a similar assessment year and finding no merit in the revenue's arguments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35920 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Other Referred Cases: ITA NO. 2100/Kol/2018 for AY 2014-15
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Bogus
• Section: 143(3); 68; 69C

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “ए’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA Įी राजेश क ुमार, लेखा सटèय एवं Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय क े सम¢ [Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member] I.T.A. No. 2212/Kol/2024 Assessment Year: 2016-17 ACIT, Circle-34, Kolkata Vs. Machinery Agencies India (PAN: AAEFM 7603 D) Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 07.01.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 30.01.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से Shri Manish Tiwari, FCA For the revenue / राजèव कȧ ओर से Shri Sailen Samadder, Addl. CIT Sr. DR ORDER / आदेश Per Pradip Kumar Choubey, JM: This is the appeal preferred by the revenue against order of Commissioner of Income Tax (Appeal)-Addl/JCIT(A)-4, Chennai (hereinafter referred to as the Ld. CIT(A)] dated 09.08.2024 for AY 2016-17. 2 I.T.A. No. 2212/Kol/2024 Assessment Year: 2016-17 Machinery Agencies India 2. Brief facts of the case of the assessee is that the assessee is a partnership firm engaged in business of trading of natural raw rubber and latex. The assessee filed its return of income by declaring a total income of RS. 43,52,040/-. The case was selected for scrutiny and show cause notice was also issued and thereafter the AO completed the assessment and passed an order u/s 143(3) of the Act by making any addition of Rs. 1,06,48,783/- which includes expenses of Rs. 88,591/- u/s 37 of the Act, unsecured loans of Rs. 95,00,000/- u/s 68 of the Act and interest paid on unsecured loans of Rs. 10,60,192/- u/s 69C of the Act. 3. Aggrieved by this order, the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been partly allowed as the addition of Rs. 10,50,692/- in respect of addition on unsecured loan and interest paid on the unsecured loan has been directed to be deleted but confirmed the order of AO on the ground of the disallowance made on expenses amounting to Rs. 88,591/- u/s 37 of the Act. Being aggrieved and dissatisfied the department has preferred the present appeal. 4. At the very outset, it has been argued by the ld. Counsel for the assessee that the monetary limit of filing of appeal is less than the prescribed limit and it is hit by tax effect. 5. The Ld. D.R submitted that his case lies under the exceptional clause and according to him, the Ld. CIT(A) erred in law by deleting the addition of Rs. 95,00,000/- on account of unsecured loan credited u/s 68 of the Act and Rs. 10,60,192/- on account of bogus expenses u/s 69C of the Act by ignoring the facts that the case of the assessee is different from the fact for the AY 2014-15. 6. We have perused the order of Ld. CIT(A) and find that the Ld. CIT(A) passed an order in favour of the assessee, keeping in view the order passed by the Hon’ble ITAT, Kolkata against the same the assessee for AY 2014-15. The Hon’ble ITAT in the said appeal has been decided the matter in faovur of the assessee. The Order passed by the ITAT in ITA NO. 2100/Kol/2018 for AY 2014-15 dated 30.09.2021 has also placed 3 I.T.A. No. 2212/Kol/2024 Assessment Year: 2016-17 Machinery Agencies India before us. Going over the order passed by ITAT, Kolkata against the same assessee, we find that the Hon’ble Bench has decided the case in favour of assessee for AY 2014-15 and CIT(A) keeping in view of the order passed deleted the addition made by the AO u/s 68 and 69 of the Act. Going over the facts of the case we find nothing that the case of the assessee lies on the exceptional clause. It is pertinent to mention here that tax effect is below the monetary limit prescribed by the department to prefer appeal. We also do not find any infirmity on merit in the order of Ld. CIT(A). Accordingly, the appeal of the revenue is dismissed on merit as well as tax effect. In the result, the appeal filed by the revenue is dismissed. Order is pronounced in the open court on 30th January, 2025 Sd/- Sd/- (Rajesh Kumar/राजेश क ुमार) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 30th January, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- ACIT, Circle-34, Kolkata 2. Respondent – Machinery Agencies India, 3A, Surendra Mohan Ghosh Sarani, Dalhausie-700001. 3. Ld. CIT(A)-NFAC, Delhi 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "