DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2(1), MUMBAI V. M/S GOLDMEDAL ELECTRICALS PVT LTD, MUMBAI

ITA 270/MUM/2023

AI Insights

The case involves the Revenue appealing against the order of the learned Commissioner of Income Tax (Appeals) which had deleted the additions made by the Assessing Officer under sections 68 and 147 of the Income Tax Act, 1961. The additions were initially made following a search operation on the assessee's group. The CIT(A) found the reassessment order to be void-ab-initio as it should have been passed under section 153A instead of section 147. The Revenue's appeal was dismissed due to the low tax effect, as per the CBDT Circular, unless an exception applied which the Revenue failed to substantiate.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299430 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 23-04-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 26-01-2023
• Other Referred Cases: S.H.M. Products Pvt. Ltd. in ITA No. 2098/Mum/2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Bogus loan
• Section: 68; 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, AM AND MS. KAVITHA RAJAGOPAL, JM IT A N o. 270 /M u m / 20 23 ( A s s e ss me nt Y ea r: 20 1 3- 14 ) Dy. CIT, Central Circle-2(1) Mumbai V s. M/s. Goldmedal Electricals Pvt. Ltd. 303, Wing-A, Kemp Plaza, Off Link Road, Mindspace, NR Inorbit Mall, Malad (W), Mumbai P A N / G I R N o. AA CC G 9 39 7 F (Appellant) : (Respondent) Assessee by : Shri Karan Jain Revenue by : Shri Parekh Deshpande D a te o f H e a r i n g : 24.04.2023 D ate of P ro n o u n c e me n t : 27.04.2023 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the Revenue, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short)-48, Mumbai dated 21.11.2022 passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2013-14. 2. Briefly stated the assessee is a private limited company and had filed its return of income for the impugned year dated 30.09.2013 declaring total income at Rs.63,65,580/-. The assessee’s case was reopened based on the information received from the search action carried out in the case of G M Group and Goldmedal Group dated 13.11.2019 and the assessment order u/s. 143(3) r.w.s. 147 of the Act dated 20.04.2021 was passed by the 2 ITA No. 2 7 0 / M u m / 2 0 2 3 ( A . Y . 2 0 1 3 - 1 4 ) Dy. CIT vs. M/s. Goldmedal Electricals Pvt. Ltd. Assessing Officer (A.O. for short) determining the total income at Rs.1,13,78,350/- by making an addition of Rs.50 lacs as bogus loan u/s. 68 of the Act taken from M/s. Green Velly Gems Pvt. Ltd. and an addition of Rs.12,500/- on account of alleged commission paid for the said unsecured loan along with the penalty and interest. 3. Aggrieved, the assessee was in appeal before the ld. CIT(A), challenging the addition made by the A.O. 4. The ld. CIT(A) held that the assessment order passed u/s. 147 of the Act lacked jurisdiction and that the same ought to have been passed u/s. 153A of the Act. The ld. CIT(A) deleted the impugned addition made by the A.O. on the ground that the assessment order was held to be void-ab-initio. 5. The Revenue is in appeal before us, challenging the order of the ld. CIT(A). 6. The learned Authorised Representative (ld. AR for short) for the assessee contended that the tax effect in the said appeal was Rs.16,26,306/- which is said to be covered under the low tax monetary limit of Rs.50 lacs prescribed by the CBDT vide Circular No. 17/2019 dated 08.08.2019 for the purpose of filing appeals before the Tribunal by the Revenue. 7. The learned Departmental Representative (ld. DR for short) for the Revenue had nothing to controvert the said fact and had stated that the assessee’s case will not fall under the exception to clause (e) of para 10 of the CBDT Circular. 3 ITA No. 2 7 0 / M u m / 2 0 2 3 ( A . Y . 2 0 1 3 - 1 4 ) Dy. CIT vs. M/s. Goldmedal Electricals Pvt. Ltd. 8. Having heard the rival submissions and perused the materials on record. It is evident that the addition of Rs.50 lacs on unsecured loan u/s. 68 of the Act was made by the A.O. and the same stands deleted by the ld. CIT(A) on the ground that the assessment order ought to have been passed u/s. 153A of the Act instead of section 147 of the Act. The assessee has relied on the CBDT Circular No. 17/2019 dated 08.08.2019 which prescribes the monetary limit of Rs.50 lacs and above for the Revenue to file an appeal before the tribunal against the order of the Commissioner (Appeals). The assessee’s case was reopened based on the information received from the Investigation Wing which is not an external source and the assessee contends that the assesee’s case was not covered by the exception mentioned in clause (e) of para 10 of the CBDT Circular. As the search was carried out in the assessee’s case based on the information received by the A.O. from the same Investigation Wing, Mumbai which had carried out the search action on the assessee, the source of the information received by the A.O. was not from external law enforcement agencies and for the same reason the assessee would not fall under the exception specified in CBDT Circular. The assessee relied on the decision of co-ordinate bench in the case of S.H.M. Products Pvt. Ltd. in ITA No. 2098/Mum/2022 vide order dated 29.12.2022. It is observed that the ld. DR has not controverted the said facts stated by the assessee in its written submission dated 21.04.2023. 9. Hence, by respectfully following the above mentioned decision of the co-ordinate bench, we hereby dismiss the appeal of the Revenue on monetary limit prescribed by the CBDT with a liberty given to the Revenue to restore the appeal if in case the Revenue is 4 ITA No. 2 7 0 / M u m / 2 0 2 3 ( A . Y . 2 0 1 3 - 1 4 ) Dy. CIT vs. M/s. Goldmedal Electricals Pvt. Ltd. able to substantiate that the assessee’s case would fall under the exception mentioned in clause (e) of para 10 of the CBDT Circular. 10. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open court on 27.04.2023 Sd/- Sd/- (Om Prakash Kant) (Kavitha Rajagopal) Accountant Member Judicial Member Mumbai; Dated : 27.04.2023 Roshani, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT - concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai