Income-tax Officer, Ward - 5(2), Pune V. Pradeep Laxmanrao Dhumal, Pune

ITA 2470/PUN/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4794 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 24-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Bogus purchase; Tax effect

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI GEORGE MATHAN, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.2470/PUN/2017 / ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER, WARD-5(2), PUNE. . / APPELLANT V/S SHRI PRADEEP LAXMANRAO DHUMAI, C*303, AKSHAY GARDEN SAMBAJI NAGAR, DHANKAWADI, PUNE 411 043. PAN : AARPD7977N. . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE. REVENUE BY : SHRI S.P. WALIMBE. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 4, PUNE DATED 26.05.2017 FOR THE ASSESSMENT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE REVENUE READS AS UNDER : 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE T HE LD CIT(A) HAS ERRED IN RESTRICTING THE ADDITION MADE BY THE ASSESSING O FFICER ON ACCOUNT OF BOGUS PURCHASES TO RS6,62,408/( I.EM12.5% OF THE HA WALA PURCHASES OF RS 52,99,262/-) INSTEAD OF UPHOLDING THE ENTIRE ADD ITION OF RS 52,99,262/- CONTRARY TO THE DECISION OF HON'BLE HIG H COURT OF DELHI OF LA MEDICA (117 TAXMAN 628),HON'BLE HIGH COURT OF ALLAH ABAD IN THE CASE OF KAVERI RICE MILL (157 TAXMAN 376 ) AND HON'BLE HIGH COURT OF RAJASTHAN IN THE CASE OF INDIAN WOLLEN CARPET FACTO RY (125 TAXMAN 763 ). / DATE OF HEARING : 21.02.2020 / DATE OF PRONOUNCEMENT: 21.02.2020 2 ITA NO.2470/PUN/2017 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT (A) HAS ERRED IN NOT CONSIDERING FACTS THAT GOODS CLAIM ED TO HAVE BEEN PURCHASED FROM HAWALA PARTIES WERE NOT AT ALL RECEI VED BY THE ASSESSEE, NOT TRADED BY HIM OR CONSUMED BY HIM. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD CIT (A) HAS ERRED IN HOLDING THAT 12.5% OF THE PURC HASES CAN BE ADDED AS INCOME WHEREAS SALES TAX ACTION FOUND THE TRANSACTI ON BOGUS WITHOUT ACTUAL SALE/DELIVERY OF GOODS, ON ENQUIRIES FOUND S ELLERS NON-EXISTENT AT THE GIVEN ADDRESS, ASSESSEE FAILED TO FILE CONFIRMA TION, FAILED TO PRODUCE THE SUPPLIERS AND, LETTERS ISSUED TO SELLERS HAVE C OME BACK UN-SERVED, WHICH PROVED THAT THE WHOLE PURCHASES WERE NOT GENU INE. 4 FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LD. CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THE APP EAL OF THE REVENUE IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF CIRCULAR NO.17/2019 DATED 08.08.2019 ISSUED BY CBDT AND T HEREFORE, THE APPEAL OF THE REVENUE BE DISMISSED. LD.D.R. DID NOT OBJECT TO THE AFORESAID CONTENTION MADE BY THE LD.A.R. BUT HOWEVER SUP PORTED THE ORDER OF LOWER AUTHORITIES. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSING THE GROUNDS OF APPEAL R AISED BY THE REVENUE, WE FIND THAT REVENUE IS AGGRIEVED BY THE ORDER OF LD. CIT(A) IN RESPECT OF THE RELIEF GIVEN BY HIM. AS PER THE RECENT AN NOUNCEMENT OF CENTRAL BOARD OF DIRECT TAXES (CBDT) DATED 08.08.2019 (CIRCU LAR NO. 17 OF 2019), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF GIVEN BY LD. CIT(A) BEFORE THE INCOME TAX APPELLATE TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST, EXCEEDS RS.50 LAKHS AND IT FURTH ER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDIN G APPEALS ALSO. WE FIND THAT IN THE PRESENT CASE THE TAX EFFECT INVOLVED IS LESS THAN RS.50 LAKHS. IN THE ABSENCE OF ANY MATERIAL PLACED ON REC ORD BY THE REVENUE TO DEMONSTRATE THAT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY EXCEPTIONS PROVIDED IN PARA 10 OF THE AFORESAID CBDT CIRCULAR, WE 3 ITA NO.2470/PUN/2017 ARE OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY TH E INSTRUCTIONS OF THE AFORESAID CBDT CIRCULAR WOULD BE APPLICABLE TO THE PR ESENT APPEAL OF THE DEPARTMENT. WE THEREFORE HOLD THE PRESENT APPEAL OF REVENUE TO BE NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFEC T. HOWEVER, IN CASE THERE IS ANY ERROR IN THE COMPUTATION OF THE TA X EFFECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT CIRCULAR IS NOT APP LICABLE, IT WOULD BE OPEN TO THE REVENUE TO SEEK REVIVAL OF THE APP EAL. THUS, THE GROUNDS OF THE REVENUE ARE DISMISSED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON 21 ST DAY OF FEBRUARY, 2020. SD/- SD/- ( GEORGE MATHAN ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 21 ST FEBRUARY, 2020. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-4, PUNE. PR. CIT-3, PUNE. '#$ %%&',) &', / DR, ITAT, PUNE; $+,-/ GUARD FILE. / BY ORDER // TRUE COPY // ./0%1&2 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.