M/S. ELPHISTONE PAPER BOX MANUFATURING CO., MUMBAI V. JURISDICTIONAL ITO - 31(1)(1), MUMBAI

CO 16/MUM/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3741 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 20-02-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Audit objection; Tax effect; Tax effect
• Section: 131; 133A; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 445/MUM/2021 Assessment Year: 2007-08 & ITA No. 444/MUM/2021 Assessment Year: 2008-09 & ITA No. 443/MUM/2021 Assessment Year: 2009-10 & ITA No. 442/MUM/2021 Assessment Year: 2010-11 & ITA No. 441/MUM/2021 Assessment Year: 2011-12 Jurisdictional Income-tax Officer- 31(1)(1), Room No. 603, 6 th Floor, Kautilya Bhavan, Bandra Kurla Complex, ‘G’ Block, Bandra (East) Mumbai-400051. Vs. M/s Elphinstone Paper Box Manufacturing Co. S/10 Ram Mandir Road, Goregaon (West), Mumbai-400104. PAN No. AAAFE 0509 Q Appellant Respondent CO No. 18/MUM/2022 (ITA No. 445/MUM/2021) Assessment Year: 2007-08 & CO No. 17/MUM/2022 (ITA No. 444/MUM/2021) Assessment Year: 2008-09 & M/s Elphinstone Paper Box Manufacturing Co. S/10 Ram Mandir Road, Goregaon (West), Mumbai-400104. PAN No. AAAFE 0509 Q Appellant Jurisdictional Income-tax Officer-31(1)(1), Room No. 603, 6 th Floor, Kautilya Bhavan, Bandra Kurla Complex, ‘G’ Block, Bandra (East) Mumbai-400051. Appellant M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. CO No. 16/MUM/2022 (ITA No. 443/MUM/2021) Assessment Year: 2009-10 & CO No. 15/MUM/2022 (ITA No. 442/MUM/2021) Assessment Year: 2010-11 & CO No. 14/MUM/2022 (ITA No. 441/MUM/2021) Assessment Year: 2011-12 M/s Elphinstone Paper Box S/10 Ram Mandir Road, Vs. Jurisdictional Income 31(1)(1), Room No. 603, 6 Kautilya Bhavan, Bandra Kurla Complex, ‘G’ Block, Bandra (East) Mumbai-400051. PAN No. AAAFE 0509 Q Respondent ITA No. 440/MUM/2021 Assessment Year: 2010-11 tax Floor, Vs. Yogendra K. Patel (HUF) 31, Vakharia Indl. Estate, Ram Mandir Road, Goregaon (West), Mumbai-400104. PAN No. AAAHY 0047 D Respondent M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 2 Jurisdictional Income-tax Officer- Room No. 603, 6 th Floor, Kautilya Bhavan, Bandra Kurla Complex, ‘G’ Block, Bandra (East) 400051. Yogendra K. Patel (HUF) 31, Vakharia Indl. Estate, Ram Mandir Road, Goregaon (West), 400104. PAN No. AAAHY 0047 D Yogendra K. Patel (HUF) 31, Vakharia Indl. Estate, Ram Mandir Road, Goregaon (West), Mumbai-400104. PAN No. AAAHY 0047 D Appellant Revenue by Assessee by Date of Hearing Date of pronouncement PER BENCH These appeals by the assessee(s) are directed against separate orders passed by the Commissioner of Income Ld. CIT(A)’] for different assessment years. M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. CO No. 13/MUM/2022 (ITA No. 440/MUM/2021) Assessment Year: 2010-11 Yogendra K. Patel (HUF) 31, Vakharia Indl. Estate, Vs. Jurisdictional Income 31(1)(1), Room No. 603, 6 Kautilya Bhavan, Bandra Kurla Complex, ‘G’ Block, Bandra (East) Mumbai-400051. PAN No. AAAHY 0047 D Respondent : Mrs. Smita Nair, DR Assessee by : Mr. Bhupendra Shah, AR Date of Hearing : 21/06/2022 Date of pronouncement : 29/06/2022 ORDER These appeals by the Revenue and cross-objection by the are directed against separate orders passed by the Commissioner of Income-tax (Appeals)-42, Mumbai [in short ] for different assessment years. M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 3 Jurisdictional Income-tax Officer- Room No. 603, 6 th Floor, Kautilya Bhavan, Bandra Kurla Complex, ‘G’ Block, Bandra (East) 400051. Mr. Bhupendra Shah, AR objection by the are directed against separate orders passed by the 42, Mumbai [in short ‘the 2. In the grounds, which were made by the made from one of the party namely Private Limited” as bogus. 3. In the cross-objection, the assessee has raised one of the issue of appeals being covered by the tax effects Circular issued by the Central Board of Direct Taxes(CBDT), New Delhi. 4. Before us, the Ld. effects Circular, submitted that in these cases information was received from the Sales Tax Authorities and therefore appeals of the assessee falls under exception clause of the circular, according to which wherever information has been received from external sources, by the tax effects circular. M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. In the grounds, Revenue has agitated deleting of additions, which were made by the Assessing Officer alleging the purchases made from one of the party namely “M/s Bigwin Paper Distributor as bogus. objection, the assessee has raised one of the issue of appeals being covered by the tax effects Circular issued by the Central Board of Direct Taxes(CBDT), New Delhi. Ld. DR on the issue of appeals covered by tax , submitted that in these cases information was Sales Tax Authorities regarding bogus purchases and therefore appeals of the assessee falls under exception clause of the circular, according to which wherever information has been from external sources, those appeals shall not be covered by the tax effects circular. M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 4 deleting of additions, alleging the purchases Paper Distributor objection, the assessee has raised one of the issue of appeals being covered by the tax effects Circular issued by the DR on the issue of appeals covered by tax , submitted that in these cases information was regarding bogus purchases and therefore appeals of the assessee falls under exception clause of the circular, according to which wherever information has been those appeals shall not be covered 5. In the rejoinder, the sales tax information was received in the case of Distributor Private Limited proceeding was conducted, wherein it was found that said party has issued further bills in the case of the assessee objection. According to the from the body of the assessment order, and therefore exception clause does not apply to these appeals and same are covered by the tax effects circular. 6. We have heard submission of the both parties on the issue in dispute. The tax effect in these appea below: S. No. 1. 445/M/2021 2. 444/M/2021 M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. In the rejoinder, the Ld. counsel of assessee submitted that sales tax information was received in the case of Private Limited” and thereafter in that case survey proceeding was conducted, wherein it was found that said party has issued further bills in the case of the assessees before us . According to the Ld. counsel, these facts are amply clear from the body of the assessment order, and therefore exception clause does not apply to these appeals and same are covered by the We have heard submission of the both parties on the issue in The tax effect in these appeals is reproduced in the chart ITA No. Tax effect 445/M/2021 36,875/- 444/M/2021 69,012/- M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 5 of assessee submitted that sales tax information was received in the case of “Bigwin Paper ter in that case survey proceeding was conducted, wherein it was found that said party has before us in cross- , these facts are amply clear from the body of the assessment order, and therefore exception clause does not apply to these appeals and same are covered by the We have heard submission of the both parties on the issue in ls is reproduced in the chart Tax effect 3. 443/M/2021 4. 440/M/2021 5. 441/M/2021 6. 442/M/2021 6.1 We find that tax effect in these appeals is not monetary limit, which has been revised by the CBDT dated 08/08/2019 for the purpose of the filing of the appeal by the Department before the lakhs to ₹ 50.00 lakhs. For ready reference, said circular is reproduced as under: “Reference is invited to the Circular No.3 Circular) of Central Board of Direct Taxes (the Board) and its amendment dated ling of income tax appeals by the Department before Income Tax Appellate Tribunal. High Courts and Court have been specified. Representation has also been received that an an~omaly in the said 2. As a step towards further management of litigation. it has been decided by the Board M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. 443/M/2021 1,10,375/ 440/M/2021 1,13,471/ 441/M/2021 32,068/- 442/M/2021 1,17,596/ We find that tax effect in these appeals is not which has been revised by the CBDT dated 08/08/2019 for the purpose of the filing of the appeal by the Department before the Income-Tax Appellate Tribunal from 50.00 lakhs. For ready reference, the relevant part of the said circular is reproduced as under: Reference is invited to the Circular No.3 of2018 dated 11.07.2018 Circular) of Central Board of Direct Taxes (the Board) and its amendment dated 20 th August. 2018 vide which monetary limits for fi ling of income tax appeals by the Department before Income Tax Appellate Tribunal. High Courts and SLPs/appeals hefore Court have been specified. Representation has also been received that in the said circular at para 5 may be removed. 2. As a step towards further management of litigation. it has been decided by the Board that monetary limits for filing of appeals in M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 6 1,10,375/- 1,13,471/- 1,17,596/- We find that tax effect in these appeals is not exceeding the which has been revised by the CBDT vide circular dated 08/08/2019 for the purpose of the filing of the appeal by the Tribunal from ₹ 20.00 the relevant part of the 11.07.2018 (the Circular) of Central Board of Direct Taxes (the Board) and its vide which monetary limits for fi ling of income tax appeals by the Department before Income Tax hefore Supreme Court have been specified. Representation has also been received that circular at para 5 may be removed. 2. As a step towards further management of litigation. it has been that monetary limits for filing of appeals in income-tax cases be enhanced further through of the Circular menti monetary limits specified in Para 3 ofthe Circular shall read as follows: S. No. Appeals/SLPs in Income 1. Before Appellate Tribunal 2. Before High Court 3. Before Supreme Court 6.2 Thus prima facie, the appeals of the Department are not maintainable in view of monetary tax effect being less than The Ld. DR however, submitted that the case falls under exception clause communicated by the CBDT. He referred dated 20.08.2018 by which exceptions have been carved out to Circular No. 03 of 2018 dated 11 withdrawal/non-filing appeal by the Department in low tax effect appeals. The CBDT has specified several instances for filing appeal despite their low tax effect. The contents of the said letter are reproduced as under: “All the Principal Chief Commissioners of Inc Subject: Amendment to para 10 of the Circular No. 3 of 2018 dated 11.07.2018-reg: M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. tax cases be enhanced further through amendment in Para 3 of the Circular mentioned above and accordingly, the table for monetary limits specified in Para 3 ofthe Circular shall read as follows: Appeals/SLPs in Income-tax matters Monetary Limit (₹) Before Appellate Tribunal Before High Court Before Supreme Court prima facie, the appeals of the Department are not maintainable in view of monetary tax effect being less than The Ld. DR however, submitted that the case falls under exception clause communicated by the CBDT. He referred to dated 20.08.2018 by which exceptions have been carved out to Circular No. 03 of 2018 dated 11 th July 2018 relating to filing appeal by the Department in low tax effect appeals. The CBDT has specified several instances for filing appeal tax effect. The contents of the said letter are reproduced as under: “All the Principal Chief Commissioners of Inc Subject: Amendment to para 10 of the Circular No. 3 of 2018 reg: M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 7 amendment in Para 3 oned above and accordingly, the table for monetary limits specified in Para 3 ofthe Circular shall read as follows: Monetary Limit ₹) 50,00,000/- 1,00,00,000/- 2,00,00,000/- prima facie, the appeals of the Department are not maintainable in view of monetary tax effect being less than ₹50 lakh. The Ld. DR however, submitted that the case falls under exception CBDT directive dated 20.08.2018 by which exceptions have been carved out to July 2018 relating to filing appeal by the Department in low tax effect appeals. The CBDT has specified several instances for filing appeal tax effect. The contents of the said letter are “All the Principal Chief Commissioners of Income Tax Madam/Sir, Kindly refer to the above. 2. The monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/ appeals before Supreme Court have been revised by Board’s Circular No. 3 of 2018 dated 11.07.2018. 3. Para 10 of the said Circular p enumerated in the said para should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 thereof or there is no tax effect. Para 10 of amended as under: “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board’s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where addition relates to undisclosed foreign income/ undisclosed foreign assets (including financial assets)/ undisclosed foreign bank account. (e) Where addition is based on the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution has been filed by the Department and is pending in the Court. ” 4. The said modification shall come into effect from the date o f issue of this letter. 5. The same may be brought to the knowledge of all officers working in your region. 6. This issues with the approval o 6.3 The exception 10(e) which has been referred by the Ld. DR related to the cases whether information from the external sources in the nature of law enforcement agencies such as M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. Kindly refer to the above. 2. The monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/ appeals before Supreme Court have been revised by Board’s Circular No. 3 of 2018 dated 11.07.2018. 3. Para 10 of the said Circular provides that adverse judgments relating to the issues enumerated in the said para should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 thereof or there is no tax effect. Para 10 of the Circular No. 3 of 2018 dated 11.07.2018 is hereby “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule is under (b) Where Board’s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or venue Audit objection in the case has been accepted by the Department, (d) Where addition relates to undisclosed foreign income/ undisclosed foreign assets (including financial assets)/ undisclosed foreign bank account. (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution has been filed by the Department and is pending in the The said modification shall come into effect from the date o f issue of this letter. 5. The same may be brought to the knowledge of all officers working in your region. 6. This issues with the approval of the Hon’ble Finance Minister. The exception 10(e) which has been referred by the Ld. DR related to the cases whether information from the external sources in the nature of law enforcement agencies such as M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 8 2. The monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/ appeals before Supreme Court have been rovides that adverse judgments relating to the issues enumerated in the said para should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 thereof or there is the Circular No. 3 of 2018 dated 11.07.2018 is hereby “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified (a) Where the Constitutional validity of the provisions of an Act or Rule is under (b) Where Board’s order, Notification, Instruction or Circular has been held to be venue Audit objection in the case has been accepted by the Department, (d) Where addition relates to undisclosed foreign income/ undisclosed foreign assets information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate (f) Cases where prosecution has been filed by the Department and is pending in the The said modification shall come into effect from the date o f issue of this letter. 5. The same may be brought to the knowledge of all officers working in your region. f the Hon’ble Finance Minister.” The exception 10(e) which has been referred by the Ld. DR related to the cases whether information from the external sources in the nature of law enforcement agencies such as CBD/ED/DRI/SFIO/Directorate General of GST Intelligence (DGGI) etc. Whereas the Investigation Wing of the Income Tax Department is part of the Income Tax Department and administratively as well as functionally it is a part of the Income Tax Department and not external law enforcement agency as specified in the aforesaid exception. The issue precipitated before us is whether the information in the case has been received from external law enforcement agency i.e. Sales Tax Department or from internal source i.e. Investigation Wing. Assessing Officer has given was conducted in the case of Limited’ and ‘M/s Arun Paper and Iron Traders Wing of the Income Tax Department based on the information from the Sales Tax Authorities that those were engaged in bogus purchase bills. During the search/survey action on Bigwin Paper Distributor Private Limited M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. CBD/ED/DRI/SFIO/Directorate General of GST Intelligence (DGGI) nvestigation Wing of the Income Tax Department is part of the Income Tax Department and administratively as well as functionally it is a part of the Income Tax Department and not external law enforcement agency as specified in the aforesaid issue precipitated before us is whether the information in the case has been received from external law enforcement agency i.e. Sales Tax Department or from internal source i.e. Investigation Wing. In the case before us, the Ld. Assessing Officer has given a details finding as how search/survey was conducted in the case of ‘M/s Bigwin Paper Distributor Private M/s Arun Paper and Iron Traders’ by the Investigation Wing of the Income Tax Department based on the information from horities that those were engaged in bogus purchase bills. During the search/survey action on Bigwin Paper Distributor Private Limited and M/s Arun Paper and M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 9 CBD/ED/DRI/SFIO/Directorate General of GST Intelligence (DGGI) nvestigation Wing of the Income Tax Department is part of the Income Tax Department and administratively as well as functionally it is a part of the Income Tax Department and not external law enforcement agency as specified in the aforesaid issue precipitated before us is whether the information in the case has been received from external law enforcement agency i.e. Sales Tax Department or from internal In the case before us, the Ld. a details finding as how search/survey Bigwin Paper Distributor Private by the Investigation Wing of the Income Tax Department based on the information from horities that those were engaged in accepting bogus purchase bills. During the search/survey action on M/s and M/s Arun Paper and Iron Trader, it was found that providing entries of bo Investigation Wing has sent the information to the Assessing Officer of the assessee that assessee was engaged in receipt of bogus purchase bills from M/s The relevant finding of the Assessing Officer is reproduced as under: “4.1(v) Here it is pertained to mention that the statement of Shri Arun Agarwal Director of M/s. Bigwin paper Distributors was recorded U/s 131 of the I.T. Act by ACIT 31(1) Mumbai on 02/02/2015 and o in the statements may be summarized as under: i. In both the entities i.e. Bigwin paper Distributors and M/s. Arun Paper and Iron Traders, he was managing person. Both the firm had carried out trading of paper during the under assessment. ii. Both the concerns engaged in the business of trading of paper, wherein they had been procuring orders for supply of papers from its customers and pass on the same to the other traders/suppliers, availa market, who directly supply the goods to the customers of his two concerns i.e. M/s Bigwin paper Distributors Pvt. Ltd. and M/s. Arun Paper and Iron Traders. iii. During the course of statement proceedings, he has stated that the Sales tax Department had M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. Iron Trader, it was found that those were also engaged in the providing entries of bogus sales to the assessee and thereafter the Investigation Wing has sent the information to the Assessing Officer of the assessee that assessee was engaged in receipt of bogus purchase bills from M/s Bigwin Paper Distributor Private Limited inding of the Assessing Officer is reproduced as under: 4.1(v) Here it is pertained to mention that the statement of Shri Arun Agarwal Director of M/s. Bigwin paper Distributors was recorded U/s 131 of the I.T. Act by ACIT 31(1) Mumbai on 02/02/2015 and on 24/02/2015. The facts emerged in the statements may be summarized as under: In both the entities i.e. Bigwin paper Distributors and M/s. Arun Paper and Iron Traders, he was managing person. Both the firm had carried out trading of paper during the financial year, relevant to the year under assessment. Both the concerns engaged in the business of trading of paper, wherein they had been procuring orders for supply of papers from its customers and pass on the same to the other traders/suppliers, availa market, who directly supply the goods to the customers of his two concerns i.e. M/s Bigwin paper Distributors Pvt. Ltd. and M/s. Arun Paper and Iron Traders. During the course of statement proceedings, he has stated that the Sales tax Department had conducted an enquiry in Feb/March 2010 in the M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 10 also engaged in the gus sales to the assessee and thereafter the Investigation Wing has sent the information to the Assessing Officer of the assessee that assessee was engaged in receipt of bogus Bigwin Paper Distributor Private Limited. inding of the Assessing Officer is reproduced as under: 4.1(v) Here it is pertained to mention that the statement of Shri Arun Agarwal Director of M/s. Bigwin paper Distributors was recorded U/s 131 of the I.T. Act n 24/02/2015. The facts emerged In both the entities i.e. Bigwin paper Distributors and M/s. Arun Paper and Iron Traders, he was managing person. Both the firm had carried financial year, relevant to the year Both the concerns engaged in the business of trading of paper, wherein they had been procuring orders for supply of papers from its customers and pass on the same to the other traders/suppliers, available in market, who directly supply the goods to the customers of his two concerns i.e. M/s Bigwin paper Distributors Pvt. Ltd. and M/s. Arun During the course of statement proceedings, he has stated that the Sales conducted an enquiry in Feb/March 2010 in the above named two concerns in connection to the purchases made from certain parties which are alleged involved in issuing sales bills without making actual delivery of the goods. In general terms which are being named as Bogus/ "Hawala" dealers. The names of such the parties are as under: 1. M/S V.S.K. Enterprises 2. M/s Forum Traders 3. M/s Apple Industries 4. M/S Adinath Traders 5. M/s Raviraj Impex Pvt. Ltd. 6. M/s Shubham Enterprises 7. M/s Sameer Trading Cor 8. M/S Hiten Enterprises 9. M/s Neelofar Trade Pvt. Ltd. iv. It is also stated by him that in November 2013, survey u/s 133A of I.T.Act was carried out by the Investigation Wing of the Income Department, Mumbai in the case of both the entities During the course of survey proceeding, his statement on of the I.T.Act was recorded on 6/12/2012 and on statement, he had admitted that out of the made by his two concerns, there a were involved in M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. above named two concerns in connection to the purchases made from certain parties which are alleged involved in issuing sales bills without making actual delivery of the goods. In general terms which are being named as Bogus/ "Hawala" dealers. The names of such the parties are 1. M/S V.S.K. Enterprises 2. M/s Forum Traders 3. M/s Apple Industries 4. M/S Adinath Traders 5. M/s Raviraj Impex Pvt. Ltd. 6. M/s Shubham Enterprises 7. M/s Sameer Trading Corporation 8. M/S Hiten Enterprises 9. M/s Neelofar Trade Pvt. Ltd. It is also stated by him that in November 2013, survey u/s 133A of I.T.Act was carried out by the Investigation Wing of the Income Department, Mumbai in the case of both the entities, managed During the course of survey proceeding, his statement on of the I.T.Act was recorded on 6/12/2012 and on 7/12/2012. In the statement, he had admitted that out of the purchases claimed to have made by his two concerns, there are certain parties, mentioned supra were involved in "hawala" transactions. M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 11 above named two concerns in connection to the purchases made from certain parties which are alleged involved in issuing sales bills without making actual delivery of the goods. In general terms which are being named as Bogus/ "Hawala" dealers. The names of such the parties are It is also stated by him that in November 2013, survey u/s 133A of the I.T.Act was carried out by the Investigation Wing of the Income Tax , managed by him. During the course of survey proceeding, his statement on oath u/s 131 7/12/2012. In the purchases claimed to have certain parties, mentioned supra v. Vide reply to question no. 22 of the statement, recorded on oath on 06/12/2012 as a proprietor of M/s Arun Paper and Iron Traders and also vide reply to question no. 22 of his stat managing person of M/s Bigwin paper Distributors Pvt. Ltd. expressed his inability to furnish the vital evidences i.e. Purchase Transport Receipts, weighment Slips, Octroi Receipts, and goods receipt register made from the alleged hawala traders. vi. He admitted that certain purchases, reflected in the books of account his two concerns were affected through a broker/trader namely Hamukh Upadhayaya, (who is now no mor that all the concerns/parties which are appearing in the list Department as suspicious Hawala dealers are related to affected through the Mr. Hamukh Upadhayaya. vii. Vide answer to the question no 15 of course of survey proceeding on 7/12/2012 it is confirmed by him all the nine concerns i.e. M/s V.S.K. Enterprises, M/s Forum Apple Industries, M/s Adinath Traders, M/s Raviraj Shubham Enterprises, M/s Sameer Trading Enterprises, M/s Neelofar Trade Pvt. Ltd. are said hawala parties were engaged in hawala issuing sales bills without making actual viii. During the course of survey proceeding, carried out by the wing of the Income Department he had furnished sale shown in his two concerns i.e. M/s Ltd. and M/s. Arun Paper and Iron relevant to the financial year year 2008-09, financial M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. reply to question no. 22 of the statement, recorded on oath on 6/12/2012 as a proprietor of M/s Arun Paper and Iron Traders and also vide reply to question no. 22 of his statement, recorded as managing person of M/s Bigwin paper Distributors Pvt. Ltd. expressed his inability to furnish the vital evidences i.e. Purchase Transport Receipts, weighment Slips, Octroi Receipts, Delivery Challans and goods receipt register in respect of the purchases, claimed to have made from the alleged hawala traders. He admitted that certain purchases, reflected in the books of account his two concerns were affected through a broker/trader namely Hamukh Upadhayaya, (who is now no more alive). He further that all the concerns/parties which are appearing in the list Department as suspicious Hawala dealers are related to affected through the Mr. Hamukh Upadhayaya. Vide answer to the question no 15 of the statement recorded during course of survey proceeding on 7/12/2012 it is confirmed by him all the nine concerns i.e. M/s V.S.K. Enterprises, M/s Forum Apple Industries, M/s Adinath Traders, M/s Raviraj Impex Pvt. Ltd., M/s Enterprises, M/s Sameer Trading Corporation, M/s Hiten Enterprises, M/s Neelofar Trade Pvt. Ltd. are appearing in the list of said hawala parties were engaged in hawala trading activity and have issuing sales bills without making actual delivery of goods. During the course of survey proceeding, carried out by the wing of the Income Department he had furnished mapping of each of the sale shown in his two concerns i.e. M/s Bigwin paper Distributors Pvt. Ltd. and M/s. Arun Paper and Iron Traders with the respective purchase relevant to the financial year 2006-07, financial year 2007 09, financial year 2009-10 and financial year 2010 M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 12 reply to question no. 22 of the statement, recorded on oath on 6/12/2012 as a proprietor of M/s Arun Paper and Iron Traders and ement, recorded as managing person of M/s Bigwin paper Distributors Pvt. Ltd. he expressed his inability to furnish the vital evidences i.e. Purchase orders, Delivery Challans purchases, claimed to have He admitted that certain purchases, reflected in the books of account of his two concerns were affected through a broker/trader namely e alive). He further admitted that all the concerns/parties which are appearing in the list of Sales tax Department as suspicious Hawala dealers are related to the purchases the statement recorded during the course of survey proceeding on 7/12/2012 it is confirmed by him that all the nine concerns i.e. M/s V.S.K. Enterprises, M/s Forum Traders, M/s Impex Pvt. Ltd., M/s Corporation, M/s Hiten appearing in the list of trading activity and have delivery of goods. During the course of survey proceeding, carried out by the Investigation mapping of each of the Bigwin paper Distributors Pvt. with the respective purchase 07, financial year 2007-08, financial 10 and financial year 2010-11. It is stated by him that in September, 2011. ix. During the course of captioned assessment proceeding, while his statement on 02/02/2015 and 24/02/2015, a copy of recorded on oath in the course of survey proceeding 7/12/2013 along with the mapping detail (procured from the Investigation wing of provided to Mr. Arun Agarwal and was comments on the same. It is stated through the statements, record proceeding and the mapping of relevant to financial year further admitted that facts mentioned correct and still mapping report of the purchase and sales shown to him is also related to the his two concerns and is also acceptable to him. 4.1 (vi) From the statement of Mr. Arun Agarwal on various dates in the of survey proceeding and in the captioned assessment proceeding and the mapping report of the purchase and sales of both his concerns provided by him as well procured from the Invest Mumbai, it is emerged that during the financial year 2006 claimed to have made by M/s Bigwin Paper Distributors Pvt. Ltd. and M/s Arun Paper & Iron Traders to M/s Goel Packaging were sourced from M/s V.S.K. Enterprises and M/s Foram Traders. It is also clear that from the detail mentioned above that both these parties were engaged in "Hawala Activity" i.e. issuing sales bills without making actual delivery of the goods. M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. stated by him that in both the concerns business is closed down after 2011. During the course of captioned assessment proceeding, while his statement on 02/02/2015 and 24/02/2015, a copy of his statements, recorded on oath in the course of survey proceeding on 06/12/2013and 7/12/2013 along with the mapping detail purchases and sales, (procured from the Investigation wing of Income Tax Department) was provided to Mr. Arun Agarwal and was asked to go through and give his comments on the same. It is stated by him that that he has gone the through the statements, recorded during the course of survey proceeding and the mapping of purchases and sales of both his entities relevant to financial year 2006-07, 2007-08, 2008-09 and 2009 further admitted that these statements had been given by him and the facts mentioned in the statements were given by him and are true& correct and still acceptable to him. It is further admitted by him that the report of the purchase and sales shown to him is also related his two concerns and is also acceptable to him. From the statement of Mr. Arun Agarwal on various dates in the of survey proceeding and in the captioned assessment proceeding and the mapping report of the purchase and sales of both his concerns provided by him as well procured from the Investigation wing of the Income Tax Department, Mumbai, it is emerged that during the financial year 2006-07 all the sales, claimed to have made by M/s Bigwin Paper Distributors Pvt. Ltd. and M/s Arun Paper & Iron Traders to M/s Goel Packaging were sourced from V.S.K. Enterprises and M/s Foram Traders. It is also clear that from the mentioned above that both these parties were engaged in "Hawala i.e. issuing sales bills without making actual delivery of the goods. M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 13 both the concerns business is closed down after During the course of captioned assessment proceeding, while recording his statements, on 06/12/2013and urchases and sales, Income Tax Department) was asked to go through and give his by him that that he has gone the during the course of survey purchases and sales of both his entities 09 and 2009-10. He these statements had been given by him and the the statements were given by him and are true& acceptable to him. It is further admitted by him that the report of the purchase and sales shown to him is also related From the statement of Mr. Arun Agarwal on various dates in the course of survey proceeding and in the captioned assessment proceeding and the mapping report of the purchase and sales of both his concerns provided by him igation wing of the Income Tax Department, 07 all the sales, claimed to have made by M/s Bigwin Paper Distributors Pvt. Ltd. and M/s Arun Paper & Iron Traders to M/s Goel Packaging were sourced from two concerns V.S.K. Enterprises and M/s Foram Traders. It is also clear that from the mentioned above that both these parties were engaged in "Hawala i.e. issuing sales bills without making actual delivery of the goods.” 6.4 Thus it is clear that in the case of the assessee source of information is not Sales Tax Department and information is received only from the Investigation Wing of the Department internal source and specified in exception 10(e) of the CBDT Letter under reference reproduced above. 6.5 In view of the above appeals filed by the Revenue are covered by the Circular No. 17/2019 dated 08.08.2019 being tax effect involved less than the monetary limit prescribed in the said Circular. These appeals of the Revenue are accordingly dismissed. 6.6 As these appeals have already been dismissed, the cross objection raised by the assessee in respective appeals are accordingly allowed. M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. is clear that in the case of the assessee source of information is not Sales Tax Department and information is received only from the Investigation Wing of the Department and not external law enforcement n exception 10(e) of the CBDT Letter under reference In view of the above appeals filed by the Revenue are covered by the Circular No. 17/2019 dated 08.08.2019 being tax effect involved less than the monetary limit prescribed in the said Circular. These appeals of the Revenue are treated as infructuous and ccordingly dismissed. As these appeals have already been dismissed, the cross objection raised by the assessee in respective appeals are . M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 14 is clear that in the case of the assessee source of information is not Sales Tax Department and information is received only from the Investigation Wing of the Department, which is an law enforcement agencies as n exception 10(e) of the CBDT Letter under reference In view of the above appeals filed by the Revenue are covered by the Circular No. 17/2019 dated 08.08.2019 being tax effect involved less than the monetary limit prescribed in the said Circular. treated as infructuous and As these appeals have already been dismissed, the cross- objection raised by the assessee in respective appeals are 7. In the result, the appeals filed by the Revenue whereas cross objection raised by the assessee are Order pronounced in the Court on Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 29/06/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// M/s Elphinstone Paper Box ITA Nos. 445/M/2021 & 11 Ors. In the result, the appeals filed by the Revenue s objection raised by the assessee are allowed ounced in the Court on 29/06/2022. Sd/- SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary ITAT, Mumbai M/s Elphinstone Paper Box Manufacturing Co ITA Nos. 445/M/2021 & 11 Ors. 15 In the result, the appeals filed by the Revenue are dismissed, allowed. - OM PRAKASH KANT) MEMBER Sr. Private Secretary) ITAT, Mumbai