ACIT 3(2)(2), MUMBAI V. OMRICRON STEEL TRADERS P.LTD, MUMBAI

ITA 1600/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0777 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 08-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 1600/MUM/2017 FOR ASSESSMENT YEARS: 2012-13 ACIT- 3(2)(2), ROOM NO. 674, 6 TH FLOOR, AAYAKAR BHAWAN, M.K. ROAD, MUMBAI-400020. VS M/S OMRICORN STEEL TRADERS PVT. LTD., 307, MAKER CHAMBER V, NARIMAN POINT, MUMBAI-400021. PAN : AABCO2286J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHISH POPHARE (DR) RESPONDENT BY : NONE DATE OF HEARING : 22/08/2019 DATE OF PRONOUNCEMENT : 22/08/2019 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDE R OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-8, [CIT(A)], MUMBAI DATED 30.1 1.2016 WHICH IN TURN ARISES FROM THE ASSESSMENT ORDER DATED 26.03.2015 P ASSED UNDER SECTION 143(3) FOR ASSESSMENT YEAR 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LA W, THE LD. CIT(A) WAS RIGHT IN DELETING THE DISALLOWANCE OF RS.1,91,564/- ON ACCOU NT OF NON-GENUINE BUSINESS LOSS MERELY ON THE PREMISE THAT THE BOOKS OF ACCOUN T WERE NOT REJECTED AND THE BILLS/ VOUCHERS/ CHALLANS WERE NOT EXAMINED WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE WAS ENGAGED IN TRADING AMONG ITS GROUP CON CERNS, AND THE TRANSACTIONS WERE AFFECTED IN BOOKS ONLY, WITHOUT ACTUAL DELIVER Y OF GOODS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LA W, THE LD. CIT (A) WAS RIGHT IN DELETING THE DISALLOWANCE OF RS. 50,85,923/ BEIN G LOSS ON TRADING OF INDONESIAN STEAM COAL WITHOUT APPRECIATING THE FACT THAT THE ENTIRE TRANSACTION OF ITA NO. 1600/MUM/2017-M/S OMRICORN STEEL TRADERS PV T. LTD. 2 PURCHASES AND SALES WAS MADE WITHIN GROUP CONCERNS EFFECTED ON HIGH SEAS AND THERE WAS NO ACTUAL DELIVERY OF GOODS. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LA W, THE LD. CIT (A) WAS RIGHT IN DELETING THE DISALLOWANCE OF RS.13,89,027/- BEIN G LOSS ON ACCOUNT OF EXPENSES INCURRED IN CONNECTION WITH THE PURCHASES MADE FROM GROUP CONCERN, 'TOPWORTH GROUP' AGAINST LETTER OF CREDIT WITHOUT APPRECIATIN G THE FACT THAT THE PURCHASES MADE FROM THE GROUP CONCERN WERE ON CREDIT AND HENC E THERE IS NO JUSTIFICATION TO OBTAIN THE LETTER OF CREDIT FOR PURCHASES UNDER CON SIDERATION. 4. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPA NY IS ENGAGED IN THE BUSINESS OF TRADING IN FERRO-ALLOYS AND STEEL PRODU CTS, FILED IS RETURN OF INCOME FOR ASSESSMENT YEAR 2012-13 ON 29.09.2012 DE CLARING TOTAL INCOME OF RS. 3.22 CRORE (APPROX). THE RETURN OF INCOME WA S SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) O N 26.03.2015. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R MADE THE ADDITION/DISALLOWANCE OF RS. 1,91,564/- ON ACCOUNT OF LOSS IN TRADING, DISALLOWANCE ON LOSS ON TRADING OF INDONESIAN STEAM COAL AND DISALLOWANCE OF EXPENSES/FINANCE CHARGES OF RS. 13,89,027/-. ON APPEAL BEFORE THE LD. CIT(A), ALL THE DISALLOWANCES/ADDITION WERE DELETED . AGGRIEVED BY THE ORDER OF LD. CIT(A), THE REVENUE HAS FILED THE PRESENT AP PEAL BEFORE US. 3. NONE APPEARED ON BEHALF OF ASSESSEE DESPITE THE SER VICE OF NOTICE OF HEARING FOR MORE THAN TWO OCCASIONS BY WAY OF REGISTERED P OST WITH ACKNOWLEDGE (RPAD.) PERUSAL OF GROUNDS OF APPEAL REVEALS THAT R EVENUE HAS CHALLENGED THE DELETION OF DISALLOWANCE OF RS. 1,91,54,564/- O N ACCOUNT OF NON-GENUINE BUSINESS LOSS, DISALLOWANCE OF LOSS ON ACCOUNT OF T RADING WITH INDONESIAN ITA NO. 1600/MUM/2017-M/S OMRICORN STEEL TRADERS PV T. LTD. 3 STEAM COAL OF RS. 50,85,293/- AND DISALLOWANCE OF E XPENSES/FINANCE CHARGES OF RS. 13,89,027/-. ADMITTEDLY, THE TAX EFF ECT INVOLVED IN THE PRESENT APPEAL IS LESS THAN RS. 50,00,000/-. THEREF ORE, THE PRESENT APPEAL IS SQUARELY COVERED BY THE CENTRAL BOARD OF DIRECT TAX ES (CBDT) CIRCULAR NO. 17/2019 DATED 8 TH AUGUST 2019. 4. KEEPING IN VIEW THE CBDT CIRCULAR NO. 17/2019 DATED 8 TH AUGUST 2019, WHEREIN THE REVENUE IS PRECLUDED FROM FILING APPEAL BEFORE THE TRIBUNAL. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS DISMISSE D. HOWEVER, THE REVENUE IS GIVEN LIBERTY TO GET THE APPEAL REVIVED IN CASE, IF AT ANY LATER STAGE, IT IS FOUND THAT THE PRESENT APPEAL IS COVERED BY ANY EXC EPTION CLAUSE OF CBDT CIRCULAR NO.3/2018 DATED 11 TH JULY 2018. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT O N THIS 22/08/2019. SD/- SD/- (RAJESH KUMAR (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMB ER MUMBAI, DATE: 22 .08.2019 SK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT BY ORDER ASSISTANT REGISTRAR IT AT MUMBAI