Income-tax Officer, V. M/s. Debros Polymer Product, Nashik

ITA 1929/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3692 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 31-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Bogus purchase; Tax effect
• Section: 133(6); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO S. 1927 TO 1929 /P U N/201 6 / ASSESSMENT YEAR S : 20 09 - 10 TO 2011 - 12 INCOME TAX OFFICER, WARD 1(5), NASHIK ....... / APPELLANT / V/S. M/S. DEBROS POLYMER PRODUCT, STICE, PLOT NO. 76 & 83, SINNAR SHIRDI ROAD, MUSALGAON, TAL. - SINNAR, DISTT. - NASHIK PAN : AADFD2682C / RESPONDENT . / CO NO S.45 TO 47 /PUN/201 8 / ASSESSMENT YEAR S : 20 09 - 10 TO 2011 - 12 M/S. DEBROS POLYMER PRODUCT, STICE, PLOT NO. 76 & 83, SINNAR SHIRDI ROAD, MUSALGAON, TAL. - SINNAR, DISTT. - NASHIK PAN : AADFD2682C ....... / APPELLANT / V/S. INCOME TAX OFFICER, WARD 1(5), NASHIK / RESPONDENT ASSESSEE BY : SHRI S ANKET JOSHI REVENUE BY : DR. VIVEK AGGARWAL / DATE OF HEARING : 2 8 - 06 - 2018 / DATE OF PRONOUNCEMENT : 08 - 0 8 - 201 8 2 ITA NO S. 1927 TO 1929/PUN/2016 & CO NOS. 45 TO 47/PUN/2018 / ORDER PER VIKAS AWASTHY, JM : TH ESE THREE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 1, NASHIK DATED 01 - 06 - 2016 COMMON FOR THE ASSESSMENT YEAR S 2 009 - 10, 2010 - 11 AND 2011 - 12. THE ASSESSEE HAS FILED CROSS OBJECTIONS (CO) AGAINST THE AFORESAID ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). SINCE, THE ISSUES INVOLVED IN ALL THESE APPEALS AND CROSS OBJECTIONS ARE IDENTICAL AND ARE ARISING FROM SAME SET OF FACTS, THESE APPEALS AND CROSS OBJECTIONS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE BEING DISPOSED OF VIDE THIS COMMON ORDER. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE IS ENGAGED IN MANUFACTURING OF RUBBER MOULDED PARTS AND OTHER ALLIED ITEMS. THE INFORMA TION WAS RECEIVED FROM THE SALES TAX DEPARTMENT, MAHARASHTRA REGARDING VARIOUS PERSONS ENGAGED IN PROVIDING ENTRIES/BILLS FOR BOGUS PURCHASES AND ALSO THE DETAILS OF BENEFICIARIES OF SUCH BOGUS PURCHASES. THE NAME OF THE ASSESSEE APPEARED IN THE LIST OF B ENEFICIARIES FROM SUCH HAWALA DEALERS. ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT , ASSESSMENTS IN THE CASE OF ASSESSEE FOR ASSESSMENT YEARS 2009 - 10, 2010 - 11 AND 2011 - 12 WERE REOPENED. DURING THE COURSE OF RE - ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED FOR VARIOUS DETAILS INCLUDING THE DETAILS OF PURCHASES MADE ALONG WITH THE ORIGINAL BILLS FROM THE ALLEGED HAWALA OPERATORS, ORIGINAL DOCUMENTS IN SUPPORT OF DELIVERY OF GOODS, OCTROI PAID, PURCHASE ORDERS , PROOF OF TRANSPORTATION , DETAILS OF PAYMENTS MADE ETC. THE ASSESSEE FURNISHED SOME OF THE DETAILS AS SOUGHT 3 ITA NO S. 1927 TO 1929/PUN/2016 & CO NOS. 45 TO 47/PUN/2018 BY THE ASSESSING OFFICER. IN THE ABSENCE OF COMPLETE DETAILS , AS SOUGHT THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES MADE BY ASSESSEE FROM TH E SUSPICIOUS HAWALA DEALERS AS UNDER : ASSESSMENT YEAR ADDITIONS MADE ON ACCOUNT OF PURCHASES MADE FROM HAWALA DEALERS 2009 - 10 RS.59,08,177/ - 2010 - 11 RS.46,24,696/ - 2011 - 12 RS.7,73,908/ - AGGRIEVED BY THE ASSESSMENT ORDER S FOR THE RESPECTIVE ASSESSMENT YEARS, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) ASSAILING THE ADDITIONS MADE BY ASSESSING OFFICER. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) THE ASSESSEE FURNISHED ADDITIONAL DOCUMENTS IN SUPPORT OF CONSUM PTION OF THE MATERIAL PURCHASED , STOCK STATEMENT , DELIVERY CHALLANS OF PURCHASE, ETC. THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER ANALYZING THE FACTS OF CASE AND DOCUMENTS ON RECORD CAME TO THE CONCLUSION THAT IT IS NOT A CASE OF BOGUS PURCHASES BUT IN FLATED PURCHASES FROM BOGUS PARTIES. THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION TO THE EXTENT OF 25% OF THE ALLEGED BOGUS PURCHASES. AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) , THE REVENUE IS IN APPEAL ASSAILING DEL ETING OF ADDITION AND THE ASSESSEE HAS FILED CROSS OBJECTIONS IN SUSTAINING 25% OF THE BOGUS PURCHASES. 3. DR. VIVEK AGGARWAL REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTING THE ASSESSMENT ORDER SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS THE ASS ESSING OFFICER HAD SENT NOTICES TO THE HAWALA DEALERS FROM WHOM THE ASSESSEE HAD PURPORTEDLY MADE PURCHASES. THE REGISTERED LETTERS SENT TO THE DEALERS WERE RECEIVED BACK UN - SERVED WITH REMARKS LEFT/REFUSED/NOT KNOWN. THE ASSESSEE WAS GIVEN OPPORTUNITY TO PRODUCE THE DEALERS FROM WHOM THE GOODS WERE PURCHASED FOR VERIFICATION. THE ASSESSEE COULD NEITHER PRODUCE THE PARTIES NOR COULD PROVIDE ANY DETAILS OF 4 ITA NO S. 1927 TO 1929/PUN/2016 & CO NOS. 45 TO 47/PUN/2018 THE SAID DEALERS. FURTHER, THE ASSESSEE FAILED TO PRODUCE THE DOCUMENTS WHICH WERE SOUGHT BY THE ASSESSING OFFICER FOR VERIFICATION. THUS, IT IS QUITE EVIDENT FROM THE CONDUCT OF ASSESSEE THAT THE PURCHASES CLAIMED ARE FICTITIOUS/BOGUS TO REDUCE THE PROFIT AND THEREBY REDUCING THE TAX LIABILITY. THE LD. DR FURTHER POINTED THAT EVEN BEFORE THE COMMIS SIONER OF INCOME TAX (APPEALS) THE ASSESSEE COULD NOT PRODUCE THE DEALERS FOR CROSS - EXAMINATION. THE LD. DR VEHEMENTLY PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER AND RESTORING THE FINDINGS OF ASSESSING OFFICER. THE LD. DR STRONGLY PLACED RELIANCE ON THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. VS. DY. COMMISSIONER OF INCOME TAX IN ITA NO. 795/PUN/2014 FOR ASSESSMENT YEAR 2010 - 11 DECIDED ON 28 - 04 - 2017. THE LD. DR SUBMITTED THAT THE CASE OF ASSESSEE FALLS UNDER SEGMENT II AND/OR III OF PARA 40 OF THE AFORESAID TRIBUNAL ORDER. 4. ON THE OTHER HAND SHRI SANKET JOSHI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD MADE PURCHASES FROM THE DEALERS AND HAD PRODUCED ORIGINAL BILLS BEFORE THE AUTHORITIES BELOW. THE LD. AR SUBMITTED THAT THE ASSESSEE HAD FURNISHED VARI OUS DOCUMENTS BEFORE THE ASSESSING OFFICER IN SUPPORT OF ITS CONTENTIONS ON 17 - 07 - 2013, 26 - 05 - 2014 AND 17 - 09 - 2014. THE LD. AR SUBMITTED THAT THE ASSESSEE IN COMMUNICATION DATED 17 - 07 - 2013 HAD CATEGORICALLY MENTIONED THAT OCTROI IS NOT APPLICABLE AT MUSALG AON ( SINNAR ) STICE , T HEREFORE, THERE IS NO PROOF OF OCTROI. THE ASSESSEE IS NOT MAINTAINING RG 3 REGISTER AS THE PRODUCTS MANUFACTURED BY THE ASSESSEE ARE EXEMPT FROM EXCISE DUTY. THE ASSESSEE HAD FURNISHED A COPY OF EXCISE NOTIFICATION TO THE ASSESSING OFFICER. THE ASSESSEE VIDE LETTER DATED 26 - 05 - 2014 HAD FURNISHED THE DETAILS OF PURCHASES MADE AND THE DETAILS OF SALES DURING THE YEAR IN THE FORMAT DESIGNED BY THE ASSESSING OFFICER. THE ASSESSEE HAD ALSO FURNISHED MONTH WISE QUANTITATIVE AND VALUE WIS E DETAILS OF OPENING STOCK, PURCHASE, SALES 5 ITA NO S. 1927 TO 1929/PUN/2016 & CO NOS. 45 TO 47/PUN/2018 AND CLOSING STOCK, ETC. THE LD. AR SUBMITTED THAT BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , THE ASSESSEE HAD FURNISHED CONSUMPTION STATEMENT OF PURCHASES MADE FROM ALLEGE D HAWALA DEALERS, ANNUAL STOCK STA TEMENT/CLOSING STOCK AND COPIES OF THE DELIVERY CHALLAN IN RESPECT OF PURCHASES MADE FROM ALLEGED HAWALA DEALERS. THE LD. AR SUBMITTED THAT THE ASSESSEE HAD MADE PURCHASES OF THE ITEMS WHICH WERE SELF CONSUMED AS RAW MATERIAL I.E. USE FOR IN - HOUSE CONSUMP TION FOR PRODUCTION OF RUBBER ROLLS, INDUSTRIAL RUBBER PARTS, RUBBER BELTING ETC. MANUFACTURED BY THE ASSESSEE. THE LD. AR ASSERTED THAT THE ASSESSING OFFICER WHILE MAKING ADDITION HAS ONLY CONSIDERED THE PURCHASE SIDE AND HAS FAILED TO TAKE INTO CONSIDER ATION THE SALES MADE BY THE ASSESSEE. 4.1 THE LD. AR FURNISHED THE CHART GIVING COMPARATIVE ANALYSIS OF G.P./N.P. AS DECLARED BY THE ASSESSEE AND AFTER DISALLOWANCE OF PURCHASES FROM HAWALA DEALERS. THE SAME IS REPRODUCED HERE - IN - BELOW : ASST. YEAR SALES NET PROFIT DECLARED BY ASSESSEE PURCHASES MADE FROM ALLEGED HAWALA SUPPLIERS G.P. % DECLARED BY ASSESSEE G.P. % AFTER DISALLOWING HAWALA PURCHASES N.P. % DECLARED BY ASSESSEE N.P. % AFTER DISALLOWING HAWALA PURCHASES 2009 - 10 1,76,40,951 5,24,152 59,08,177 17.51% 51.00% 2.97% 36.46% 2010 - 11 1,70,08,814 4,79,960 46,24,696 17.37% 44.57% 2.82% 30.01% 2011 - 12 1,74,01,038 4,93,990 7,73,908 18.13% 22.58% 2.83% 7.29% THE LD. AR POINTED THAT THE GP DECLARED BY THE ASSESSEE VARIED BETWEEN 1 7 % TO 18% AND NP DECLARED BY THE ASSESSEE RANGED BETWEEN 2.82% TO 2.97% FOR THE ASSESSMENT YEAR S UNDER APPEALS. WHEREAS, AFTER MAKING DISALLOWANCE OF PURCHASES FROM ALLEGED HAWALA DEALERS THE GP INCREASED TO 51% IN ASSESSMENT YEAR 2009 - 10, 44.57% IN ASSESSMENT YEAR 20 10 - 11 AND 22.58% IN ASSESSMENT YEAR 2011 - 12. ACCORDINGLY, THE NET PROFIT AFTER DISALLOWING HAWALA PURCHASES WAS ALSO DISTORTED AND ROSE TO 36.46% IN ASSESSMENT YEAR 2009 - 10, 30.01% IN ASSESSMENT YEAR 2010 - 11 6 ITA NO S. 1927 TO 1929/PUN/2016 & CO NOS. 45 TO 47/PUN/2018 AND 7.29% IN ASSESSMENT YEAR 2011 - 12. THE FIGURES OF GP/NP AFTER DISALLOW ANCE MADE BY THE ASSESSING OFFICER ARE NO WHERE COMPARABLE TO THE INDUSTR Y IN WHICH THE ASSESSEE IS OPERATING. THE LD. AR SUBMITTED THAT IN THE FIRST INSTANCE NO ADDITION IS WARRANTED IN THE FACTS OF THE CASE . IF AT ALL AD DITION HAS TO BE MADE , THE SAME MAY BE MADE IN ACCORDANCE WITH THE DECISION OF CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. VS. DY. COMMISSIONER OF INCOME TAX IN ITA NO. 795/PUN/2014 (SUPRA). THE LD. AR CONTENDED THAT THE CASE OF THE ASSESSEE FALLS IN CATEGORY IV OF PARA 40 OF THE TRIBUNAL ORDER. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . THE SOLITARY ISSUE RAISED IN THESE APPEALS BY TH E REVENUE AND THE CROSS OBJECTIONS BY THE ASSESSEE ARE THE ADDITIONS ON ACCOUNT OF BOGUS PURCHASES. THE ASSESSING OFFICER ON THE BASIS OF INFORMATION RECEIVED FROM SALES TAX DEPARTMENT ADDED ENTIRE PURCHASES MADE BY THE ASSESSEE FROM ALLEGED HAWALA DEALER S. THE COMMISSIONER OF INCOME TAX (APPEALS) REDUCED THE ADDITION TO 25 % OF SUCH PURCHASES. THE REVE NUE IN APPEAL HAS ASSAILED THE R EDUCTION OF ADDITION FROM 100% TO 25% WHEREAS, THE ASSESSEE IN CROSS OBJECTIONS HAS ASSAILED THE ADDITION OF 25% OF THE BOGUS PURCHASES BY THE COMMISSIONER OF INCOME TAX (APPEALS). A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSING OFFICER HAS MADE ADDITION MERELY ON THE BASIS OF THE INFORMATION RECEIVED FROM SALES TAX DEPARTMENT WITHOUT TAKING INTO CONSIDERATION T HE FACT THAT THE ASSESSEE HAS DISCLOSED THE SALE OF MANUFACTURED ITEMS. THE ASSESSEE HAS FURNISHED TRAIL OF GOODS TO THE AUTHORITIES BELOW AND HAS ALSO FURNISHED QUANTITATIVE DETAILS OF OPENING STOCK, PURCHASE, SALES AND CLOSING STOCK. WE CONCUR WITH THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) THAT THE PRESENT CASE DOES NOT APPEAR TO BE A CASE OF BOGUS PURCHASES IN ENTIRETY. THE REVENUE HAS NOT RAISED DOUBT OVER THE SALE OF 7 ITA NO S. 1927 TO 1929/PUN/2016 & CO NOS. 45 TO 47/PUN/2018 FINISHED GOODS BY THE ASSESSEE. THE ASSESSING OFFICER HAS ACCEPTED THE SALES DISCLOSED BY THE ASSESSEE. WITHOUT INPUT OF RAW MATERIAL, THE ASSESSEE CANNOT CARRY MANUFACTURING OF VARIOUS RUBBER PARTS. IT APPEARS TO BE A CASE WHERE THE ASSESSEE HAS MADE PURCHASE OF MATERIAL FROM GREY MARKET FOR SELF CONSUMPTION IN MANUFACTURE ACTIVITY AND HAS OBTAINED BILLS FROM SUSPICIOUS DEALERS. THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. VS. DY. COMMISSIONER OF INCOME TAX (SUPRA) HAS CONSIDERED AND ANALYZED VARIOUS SITUATION S. THE TRIBUNAL HAS WEIGHED THE BOGUS PURCHASE TRANSACTION S ON VARIOUS PARAMETERS VIZ. DOCUMENTS FURNISHED BY THE ASSESSEE TO SUPPORT PURCHASES, TRAIL OF GOODS, OPPORTUNITY TO CROSS EXAMINE ETC. AND HAS THEREAFTER CATEGORIZED THE SAME. THE RELEVANT EXTRACT OF THE TRIBUNAL ORDER IN A FORESAID CASE IS REPRODUCED HERE - IN - BELOW : 40. . THE TRIBUNAL HAS ALREADY HELD THAT THE ADDITION BE MADE BY ESTIMATING THE SAME @ 10% OF THE ALLEGED HAWALA PURCHASES. ACCORDINGLY, IT IS SO HELD. IN VIEW THEREOF, THE ISSUES WHICH EMERGE ARE AS UNDER: - I . IN CASE NO INFORMATION IS RECEIVED BY THE ASSESSING OFFICER FROM THE SALE TAX DEPARTMENT AND NO COPY OF STATEMENT RECORDED OR ANY OTHER EVIDENCE IS RECEIVED FROM THE SALES TAX DEPARTMENT, THEN NO ADDITION IS TO BE MADE ON THE BASIS OF NAME OF HAWALA DEALER IN THE LIST PREPARED BY THE SALES TAX DEPARTMENT, WHERE THE ASSESSEE HAD ASKED FOR THE SAID INFORMATION DURING ASSESSMENT PROCEEDINGS. II . WHERE THE ASSESSING OFFICER HAD RECEIVED THE STATEMENTS OF PERSONS WHO HAD ADMITTED TO HAVE JUST ISSUED BILLS OF SALE WITHOUT ANY DELIVERY OF GOODS. IN VIEW OF SUCH EVIDENCE, WHERE THE ASSESSEE HAD NOT ENTERED INTO REAL TRANSACTION OF PURCHASE OF GOODS AND IN THE ABSENCE OF ANY DELIVERY OF GOODS, THE SALES ARE BOGUS AND THE ENTIRE SALES ARE TO BE ADDED IN THE HANDS OF ASSESSEE. ADMITTEDLY, THE DEALER HAD NOT EVEN PAID VAT AGAINST SUCH PASSING OF GOODS. III . THE CASE WHERE THE ASSESSING OFFICER HAD CONFRONTED THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT AND HAD SUPPLIED COPIES OF STATEMENTS RECORDED AND HAD ALS O ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT, WHERE HAWALA DEALER WAS NOT TRACEABLE AND IN THE ABSENCE OF THE ASSESSEE FAILING TO FILE ANY DOCUMENTARY EVIDENCE OF DELIVERY OF GOODS, ADDITION IS TO BE UPHELD IN THE HANDS OF ASSESSEE ON ACCOUNT OF SUCH BO GUS PURCHASES. IV . THE NEXT INSTANCE IS THE CASE OF GOODS WHICH HAVE BEEN ADMITTEDLY SOLD BY THE HAWALA DEALER AND HAS BEEN RECEIVED BY THE ASSESSEE, WHO IN TURN HAD MAINTAINED QUANTITATIVE DETAILS AND ALSO EVIDENCE OF 8 ITA NO S. 1927 TO 1929/PUN/2016 & CO NOS. 45 TO 47/PUN/2018 ITS MOVEMENT I.E. TRANSPORTATION DETAILS AND QUALITY CONTROL DETAILS OF CONSUMPTION OF THE SAID MATERIAL OR EXACT DETAILS OF SALE OF THE SAME CONSIGNMENT THROUGH SAME TRANSPORTER DIRECTLY TO THE PARTY, THEN THE TOTAL PURCHASES CANNOT BE ADDED IN THE HANDS OF ASSESSEE. HOWEVER, SINCE THE PURCHAS ES ARE MADE FROM THE GREY MARKET, SOME ESTIMATION NEEDS TO BE MADE IN THE HANDS OF ASSESSEE. THE TRIBUNAL IN M/S. CHETAN ENTERPRISES VS. ACIT (SUPRA) HAS ALREADY HELD THAT THE ADDITION BE MADE BY ESTIMATING THE SAME @ 10% OF THE ALLEGED HAWALA PURCHASES, OVER AND ABOVE THE GP SHOWN BY THE RESPECTIVE ASSESSEE. V . ANOTHER SET OF CASES WHERE THE STATEMENTS RECORDED BY THE SALES TAX DEPARTMENT HAVE BEEN HANDED OVER TO THE ASSESSEE AND THE COPIES OF SAME HAVE BEEN SUPPLIED TO THE ASSESSEE, THEN WHERE THE ASSESSEE ESTABLISHED THE CASE OF RECEIPT OF GOODS AND ITS ONWARD TRANSMISSION, THEN THE FACTUM OF PURCHASES BY THE ASSESSEE STANDS ESTABLISHED IN SUCH CIRCUMSTANCES. HOWEVER, ESTIMATION IS TO BE MADE IN THE HANDS OF ASSESSEE BECAUSE OF PURCHASES FROM THE GREY MAR KET AND FOLLOWING THE ABOVE SAID RATIO, ADDITION IS TO BE MADE BY ESTIMATING THE SAME @ 10% OF THE ALLEGED HAWALA PURCHASES, OVER AND ABOVE THE NET PROFIT SHOWN BY THE ASSESSEE. 6. WE ARE OF CONSIDERED VIEW THAT THE CASE OF ASSESSEE FALLS IN CATEGORY I V OF THE VARIOUS SEGMENTS CLASSIFIED IN PARA 40 OF THE AFORESAID TRIBUNAL ORDER. THUS, IN THE LIGHT OF THE FACTS OF THE CASE AND THE DECISION RENDERED IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. VS. DY. COMMISSIONER OF INCOME TAX (SUPRA) WE HOLD THAT ADDITION OF GP @ 10% OF THE PURCHASES FROM ALLEGED HAWALA DEALERS OVER AND ABOVE GP DECLARED BY THE ASSESSEE DESERVES TO BE SUSTAINED. THUS, GROUNDS RAISED BY THE REVENUE IN APPEAL ARE DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE PARTLY A LLOWED IN THE TERMS AFORESAID. 7. WE FURTHER OBSERVE THAT THE TAX EFFECT IN EACH OF THESE APPEAL S IS LESS THAN RS.20 LAKHS. THE RECENT CBDT CIRCULAR NO. 3/2018, DATED 11 - 07 - 2018 HAS RAISED THE MONETARY LIMIT OF TAX EFFECT FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE TRIBUNAL TO RS.20 LAKHS. THE CIRCULAR APPLIES TO THE APPEALS TO BE FILED BY THE DEPARTMENT IN FUTURE, AS WELL AS THE APPEALS PENDING BEFORE THE TRIBU NAL. THUS, IN VIEW OF THE CBDT CIRCULAR 9 ITA NO S. 1927 TO 1929/PUN/2016 & CO NOS. 45 TO 47/PUN/2018 THE PRESENT APPEAL S BY THE REVENUE ARE LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT, AS WELL. 8. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE PAR TLY ALLOWED . ORDER PRONOUNCED ON WEDNESDAY, THE 08 TH DAY OF AUGUST, 2018 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 08 TH AUGUST, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 1, NASHIK 4. THE PR. COMMISSIONER OF INCOME TAX - 1, NASHIK 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE