Income Tax Officer , Ward -2(1), Nagpur V. M/s Adequate Infrastructure Private Limited, Nagpur

ITA 313/NAG/2019

AI Insights

The case involves the Income Tax Officer, Ward \\u2013 2 (1) as the appellant and M/s. Adequate Infrastructure Pvt. Ltd. as the respondent. The appeal by the Revenue was against the order of the CIT(A)-1, Nagpur, which had deleted the addition made by the Assessing Officer under section 68 of the Income Tax Act, 1961, amounting to Rs. 50 lakhs as unexplained cash credit. The Revenue contended that the CIT(A) erred in holding that the assessee had discharged the onus under section 68. The Tribunal also considered the applicability of CBDT's circular on the minimum tax effect for filing appeals, deciding that the tax effect in this case did not meet the threshold for appeal as it was below Rs. 50 lakhs.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136571 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-09-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 21-10-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUMUDI PATIL
• Keywords: Unexplained cash credit; Tax effect; Tax effect; Penny stocks
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH : NAGPUR [THROUGH VIRTUAL HEARING AT INCOME TAX APPELLATE TRIBUNAL : PUNE BENCHES : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK RIPOTE, ACCOUNTANT MEMBER I.T.A.No.313/NAG./2019 Assessment Year 2011-2012 The Income Tax Officer, Ward – 2 (1), Room No.316, Aaykar Bhawan, Telangkhedi Road, Civil Lines, Nagpur – 440 001. Maharashtra. vs. M/s. Adequate Infrastructure Pvt. Ltd., 248, Pritam Apartment, Civil Lines, Nagpur. PIN – 440 001. Maharashtra. PAN AAICA3941M (Appellant) (Respondent) For Revenue : Dr. Kaumudi Patil, CIT-DR For Assessee : Shri Kapil Hirani, CA Date of Hearing : 18.09.2023 Date of Pronouncement : 28.09.2023 ORDER PER SATBEER SINGH GODARA, J.M. : This Revenue’s appeal for assessment year 2011- 2012, arises against the CIT(A)-1, Nagpur’s Order No.CIT(A)-1/ 10538/2018-19, dated 05.08.2019, involving proceedings u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short “the Act”). Heard both the parties. Case file perused. 2. The Revenue raises the following substantive grounds in the instant appeal : 2 I.T.A.No.313/NAG./2019 1. “Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in deleting the addition made by the AO u/s 68 of the Act, amounting to Rs. 50 lakhs as unexplained cash credit, inspite of the fact that onus of proving credit worthiness and genuineness of the transaction was solely with the assessee ? 2. Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in holding that the assessee company has duly discharged the onus placed upon it u/s 68 of the Act ? 3. On the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in treating the statement given by Shri. Shirish C Shah as general statement inspite of the fact that this statement was recorded during the search proceedings u/s 132(4) of the I.T.Act,1961. 4. This 2nd appeal is being filed in view of OM No. 279/ Misc/M-93/2018-ITJ(PI) dated 16/09/2019 wherein it is directed that the monetary limits fixed for filing appeals before ITAT/HC and SLPs before Supreme Court shall not apply in case of the assessee claiming bogus LTCG/ STCG through penny stocks and shall be contested on merits and hence this 2nd appeal. 5. Any other ground that may be raised during the proceedings.” 3 I.T.A.No.313/NAG./2019 3. Suffice to say, the first and foremost issue which arises for our apt adjudication herein is that of applicability of CBDT’s circular no. 17/2019 dated 08.08.2019 prescribing minimum tax effect of Rs.50 lakhs in all Revenue’s appeals before the tribunal with retrospective effect. The Revenue’s stand as per it’s 4 th substantive ground is that the instant case, although involve tax effect of Rs.30,51,710/- only [column no.10 in Form.36] but, the same falls under the exception clause as the assessee had claimed bogus LTCG/STCG through penny stocks. 4. We find no merit in the Revenue’s instant fourth substantive ground seeking to carve out an exception to the aforesaid CBDT’s low tax effect circular. This is for the precise reason that the sole issue before us is regarding correctness of Assessing Officer’s action having treated the assessee’s share application/money of Rs.50 lakhs as unexplained cash credits than any income derived from sale and purchase of shares and scrip(s) treated as penny stock in the departmental investigation. We thus reject the Revenue’s instant fourth substantive ground in very terms. So is the out come of it’s instant main appeal which is dismissed as involving lower than the prescribed minimum tax effect of Rs.50 lakhs as per CBDT’s circular (supra). Ordered accordingly. 4 I.T.A.No.313/NAG./2019 5. This Revenue’s appeal is dismissed as involved lower than the prescribed tax effect. Order pronounced in the open Court on 28.09.2023. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 28 th September, 2023 VBP/- Copy to 1. The applicant 2. The respondent 3. The CIT(A)-1, Nagpur. 4. The PCIT concerned, Nagpur. 5. D.R. ITAT, Nagpur Bench, Nagpur. 6. Guard File. //By Order// //True Copy // Assistant Registrar, ITAT, Pune Benches, Pune. S.No. Details Date 1 Draft dictated on 25.09.2023 Sr.PS 2 Draft placed before author 26.09.2023 Sr.PS 3 Draft proposed & placed before the Author .09.2023 J.M. 4 Draft discussed/approved by Second Member .09.2023 A.M. 5 Approved Draft comes to the Sr. PS/PS .09.2023 Sr.PS 6 Kept for pronouncement on .09.2023 Sr.PS 7 Date of uploading of Order .09.2023 Sr.PS 8 File sent to Bench Clerk .09.2023 Sr.PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order