ACIT, KANPUR V. ARPIT OMAR, KANPUR

ITA 561/LKW/2024

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals)-4, Kanpur, which pertained to the assessment year 2016-17. The Revenue challenged the deletion of various disallowances made under section 37 and related sections of the Income Tax Act, 1961, by the CIT(A). The disallowances were initially made by the Assessing Officer (AO) due to suspicions regarding the genuineness of transactions and non-compliance with notices under section 133(6) of the Act. However, the CIT(A) deleted these disallowances, leading to the Revenue's appeal. The Tribunal, however, dismissed the appeal based on the monetary limit for filing appeals as set by the CBDT.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471435 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2021-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEPARTMENTAL APPEAL IS; ASHISH JAISWAL
• Assessee Lawyers: SANJEEV KRISHNA SHARMA
• Keywords: Tax effect; Bogus
• Section: 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “B”, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No.561/LKW/2024 (Assessment Year: 2021-22) ACIT, Kanpur 10/503, Laxmi Niwas, Allenganj, Kanpur-208001. v. Arpit Omar Hig-9, F1, Barra-8, Kanpur, Uttar Pradesh- 208027. PAN: ABAPO2156Q (Appellant) (Respondent) Appellant by: Shri Ashish Jaiswal, Adv Respondent by: Shri Sanjeev Krishna Sharma, Addl. CIT(DR) O R D E R PER ANADEE NATH MISSHRA, A.M.: 1. The present appeal has been filed by the Revenue against the impugned appellate order dated 16.07.2024 passed by the Ld. Commissioner of Income Tax (Appeals)-4, Kanpur under section 250(6) of the Income Tax Act, 1961 (hereinafter referred as to “the Act”), pertaining to the assessment year 2016-17. The grounds of appeal of the Revenue are as under: - “1. Whether on facts and circumstances of the case and in law, the Ld. CIT (A)-IV, Kanpur has erred in deleting the disallowance of Rs. 1,21,24,874/- made u/s 37 of the Income Tax Act, 1961, without appreciating the facts that alleged sellers have not filed their ITRs and these entities have also not complied with the notices issued u/s 133(6) of the Act during the course of assessment proceedings. Hence, the alleged transactions remained unsubstantiated and the AO has rightly held the transactions as suspicious and non-genuine. 2. Whether on facts and circumstances of the case and in law, the Ld, CIT (A)-!V, Kanpur has erred in deleting the disallowance of Rs. 30,94,316/- made u/s 37 r.w.s 40A(2)(b) of the Income Tax Act, 1961, ignoring the fact that the assessee during the course of assessment proceedings failed to furnish details/documents like terms of employment, work performed by the related parties as well as ITA No.561/LKW/2024 Page 2 of 3 ill/qualification possessed by them with regard to nature and business carried out by the assessee. 3. Whether on facts and circumstances of the case and in law, the Ld. CIT (A)-IV, Kanpur has erred in deleting the addition of Rs. 3,69,636/- made u/s 37 of the Act on account of disallowance of purchases claimed to have made from Sri Chandra Bhan Mishra and Sri Sujeet Gupta, ignoring the fact that the assessee during the course of assessment Proceedings failed to furnish confirmation of these parties and also notices issued u/s 133(6) of the Act to them remained un- complied with. Therefore, the transactions could not be substantiated and the AO has rightly held the same to be bogus and suspicious. 4. Whether on facts and circumstances of the case and in law, the Ld. CIT (A)-IV, Kanpur has erred in deleting the disallowance of Rs. 71,238/- made u/s 37 of the Act, ignoring the fact | that VAT penalty paid by the assessee is not allowable expenditure and the same had not been disallowed by the assessee in computation of Income. 5. That the appellant craves leave to add alter, adduce or amend or any ground or grounds or before the date of hearing of appeal.” 2. At the outset, the Ld. Counsel for the Assessee pointed out that as per the Revenue, itself, the tax effect stated to be Rs.56,18,831/- and in this context he drew our attention to the Form no. 36 submitted by the Revenue wherein tax effect is stated to be Rs.56,18,831/-. On the other hand, the learned Departmental Representative for Revenue fairly conceded that the tax effect as per Form No. 36 is stated to be Rs. 56,18,831/- which is below the pecuniary limit for filing of appeal as instructed by Central Board of Direct Taxes (CBDT), Circular No. 5 of 2024 dated 15.03.2024. The CBDT in its Circular No. 5 of 2024 dated 15.03.2024 has enhanced the pecuniary limit for filing of appeal before the Tribunal. As per the aforesaid circular, the minimum monetary limit for Departmental appeal is prescribed to be Rs.60,00,000/-. As the tax effect in this appeal is below the aforesaid monetary limit prescribed by the CBDT; the appeal is not maintainable. Accordingly, appeal of the Revenue is dismissed in limine, being not maintainable due to law tax effect. By way of abundant caution, we clarify that we ITA No.561/LKW/2024 Page 3 of 3 have not expressed any opinion on merits of the case. The appeal is dismissed. Order pronounced in the open Court on 06/03/2025. Sd/- Sd/- [SUDHANSHU SRIVASTAVA] [ANADEE NATH MISSHRA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 06/03/2025 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard file By order //True Copy// Assistant Registrar "