Income-tax Officer, V. M/s. Radhakrishna Trading Co., Jalna

ITA 1176/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5353 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-07-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 01-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Unexplained cash credit; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E . , , , ' BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO. 1176/PUN/2016 $ $ / ASSESSMENT YEAR : 2011-12 THE INCOME TAX OFFICER, WARD-2(4), JALGAON ....... / APPELLANT / V/S. M/S. RADHAKRISHNA TRADING COMPANY, KRUSHI UTPANNA BAZAR SAMITI, N.H.NO.6, TAL. PAROLA, DIST. JALGAON PAN : AAMFR5815L / RESPONDENT APPELLANT BY : SHRI MUKESH JHA RESPONDENT BY : SHRI SANKET JOSHI / DATE OF HEARING : 18.07.2018 / DATE OF PRONOUNCEMENT : 18.07.2018 / ORDER PER D. KARUNAKARA RAO, AM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF C IT(A)-2, NASHIK, DATED 02.03.2016 FOR THE A.Y. 2011-12. 2. GROUNDS RAISED BY THE REVENUE ARE EXTRACTED BELOW : (1) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A)-2, NASHIK WAS JUSTIFIED IN DELETING THE ADDITION OF RS .50,00,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE INCOME TAX AC T, 1961 DESPITE THE FACT THAT AO HAD CLEARLY ESTABLISHED THAT THE ASSESSEE F AILED TO FURNISH SATISFACTORY EXPLANATION REGARDING CASH CREDITS TO BANK ACCOUNTS INTER-ALIA TO THE CAPITALS OF PARTNERS. 2 ITA NO.1176/PUN/2016 M/S. RADHAKRISHNA TRADING COMPANY 2. THE APPELLANT PRAYS THE ORDER OF THE AO MAY BE R ESTORED. 3. THE APPELLANT PRAYS TO ADDUCE SUCH FURTHER EVIDE NCE TO SUBSTANTIATE HIS CASE. 4. THE APPELLANT PRAYS LEAVE TO ADD, CLARIFY, AMEND AND OR WITHDRAW ANY GROUNDS OF APPEAL AS AND WHEN THE OCCASION DEMANDS. 3. BRIEFLY STATED RELEVANT FACTS INCLUDES THAT THE ASSESS EE IS A COMPANY ENGAGED IN THE BUSINESS OF TRADING IN COTTON, COTTON SEE DS AND COTTON BALES. ASSESSEE FILED THE RETURN OF INCOME ON 26-09-2011 DECLAR ING TOTAL INCOME OF RS. 3,62,174/-. IN THE ASSESSMENT PROCEEDINGS, THE AO MA DE ADDITION OF RS.50 LAKHS AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT T O THE TOTAL INCOME OF THE ASSESSEE. AO ALSO MADE COUPLE OF ADDITIONS, I.E. (1) A DDITION OF RS.18,740/- ON ACCOUNT OF INTEREST ON ADVANCING OF INTEREST FREE LOANS AND (2) ADDITION OF RS.21,112/- ON ACCOUNT OF EXPENSES. 4. AGGRIEVED WITH THE ASSESSMENT ORDER DATED 24.03.2014 , THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) GRANTED RELIEF TO THE ASSESSEE ON ACCOUNT OF CASH CREDIT OF RS.50 LAKHS AND CONFIRMED THE AD DITION OF RS.21,112/- ON ACCOUNT OF EXPENSES. NOW, THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 5. AT THE OUTSET, LD. AR FOR THE ASSESSEE SUBMITTED THAT THE APPEAL FILED BY THE DEPARTMENT IS LIABLE TO BE DISMISSED ON ACCOUNT O F LOW TAX EFFECT. THE LD. AR POINTED THAT AS PER CBDT CIRCULAR NO.3/2018 DATE D 11 TH JULY, 2018, THE MONETARY LIMIT FOR FILING OF APPEAL BY THE DEPARTMENT BEFO RE THE TRIBUNAL IS RS.20 LAKHS, THEREFORE, THE APPEAL FILED BY THE DEPARTME NT IS NOT MAINTAINABLE. 3 ITA NO.1176/PUN/2016 M/S. RADHAKRISHNA TRADING COMPANY 6. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE DEFENDE D THE ASSESSMENT ORDER AND PRAYED FOR REVERSING THE FINDINGS O F THE CIT(A) ON THE SOLITARY ISSUE RAISED BY THE REVENUE. HOWEVER, THE LD. DR FAIRLY ADMITTED THAT THE TAX EFFECT IN THE PRESENT APPEAL IS LESS THAN RS.20 LAKHS . 7. BOTH SIDES HEARD. A PERUSAL OF THE IMPUGNED ORDER SHOW S THAT THE ADDITION MADE IN THE ASSESSMENT YEAR UNDER CONSIDERATION IS ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE I.T. ACT. UNDISPUTE DLY, THE TAX EFFECT ON THE ADDITION OF RS.50 LAKHS IN THE PRESENT APPEAL IS LES S THAN RS. 20 LAKHS. THE CBDT CIRCULAR NO.3/2018 DATED 11 TH JULY, 2018 RAISED THE MONETARY LIMIT OF TAX EFFECT FOR FILING OF APPEAL BY THE DEPART MENT BEFORE THE TRIBUNAL TO RS.20 LAKHS. THE CIRCULAR APPLIES TO THE PENDIN G APPEALS OF THE DEPARTMENT BEFORE THE TRIBUNAL TOO. THUS, IN VIEW OF THE C BDT CIRCULAR, WE ARE OF THE OPINION THAT THE PRESENT APPEAL OF THE REVENU E IS LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 18 TH DAY OF JULY, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 18 TH JULY, 2018. SATISH 4 ITA NO.1176/PUN/2016 M/S. RADHAKRISHNA TRADING COMPANY ' ) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-2, AURANGABAD. 4. THE PR. CIT-2, AURANGABAD. 5. , , ' , / DR, ITAT, B BENCH, PUNE. 6. % / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.