ITO, New Delhi V. M/s Nancy Sales Pvt. Ltd., New Delhi

ITA 3449/DEL/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7527 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 02-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 06-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UC DUBEY
• Keywords: Accommodation entries; Tax effect
• Section: 68

Judgement Text

ITA NO.3449/DEL/2011 ASSTT. YEAR 2008-09 ITO VS. NANCY SALES PVT. LTD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH - E, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADI N. MISHRA, ACCOUNTANT MEMBER ITA NO. 3449/DEL/2011 AY: 2008-09 ITO VS. NANCY SALES PVT. LTD. WARD-13(1), ROOM NO. 219 UP-12, C.R. BUILDING, PITAMPURA, NEW DELHI. NEW DELHI 110 088 PAN AACCN2492G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI U.C. DUBEY, SR. DR RESPONDENT BY : SHRI VED JAIN, ADV . PER ANADI N. MISHRA, ACCOUNTANT MEMBER ORDER THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST ORDE R DATED 31.3.2011 OF LD. CIT(A) - XVI, NEW DELHI. THE GROUNDS OF APPEAL ARE AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 10,00,000/- M ADE BY THE AO U/S 68 OF THE I.T. ACT, 1961 ON ACCOUNT OF ALLEGED SHARE APPL ICATION MONEY AND SHARE PREMIUM SHOWN TO HAVE BEEN RECEIVED FROM M/S. THAR STEELS P. LTD. ENTRY OPERATOR, BEING OPERATED BY SHRI TARUN GOYAL, AN ENTRY OPERATOR IDENTIFIED BY THE INVESTIGATION WING OF THE DEPARTM ENT. LD. CIT(A) HAS NOT APPRECIATED THE FACT THAT THE ASSESSEE HAS FAILED T O ESTABLISH THE PHYSICAL IDENTITY AND CREDITWORTHINESS OF CONCERNED PARTIES AND GENUINENESS OF TRANSACTIONS IN TERMS OF SECTION 68 OF THE INCOME-T AX ACT, 1961. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS (P) LTD. 216 CTR 199 (SC) CANNOT BE EXTENDED TO A SITUATION WHERE A MECHANISM HAS BEEN FORMED TO INTRODUCE UNACCOUNTED MONEY IN THE BOOKS OF ACCOUNTS WITH THE HELP OF ACCOMMODATION ENTRY PROVIDERS WHICH HAS BEEN EXPOSE D BY DEEP AND DETAILED INVESTIGATION CARRIED OUT BY THE INVESTIGA TION WING OF THE DEPARTMENT. MOREOVER, THE FACTS IN THE PRESENT CASE ARE DISTINGUISHABLE FROM THE ABOVE CITED CASE IN SO FAR AS THAT THE ASS ESEE COULD NOT PRODUCE ITA NO.3449/DEL/2011 ASSTT. YEAR 2008-09 ITO VS. NANCY SALES PVT. LTD. PAGE 2 OF 4 ANY OF THE PRINCIPAL OFFICERS/DIRECTORS OF COMPANIE S FOR EXAMINATION WHEREAS IN THE CASE CITED ABOVE THE AO NEVER ASKED THE ASSESSEE COMPANY TO PRODUCE ANY OF THE SHARE APPLICANTS FOR CROSS EXAMINATION. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT THE DIRECTORS OF TH E SHARE APPLICANT COMPANIES WERE THE EMPLOYEES OF SHRI TARUN GOYAL, W HO WORKED IN HIS OFFICE AS PEONS, RECEPTIONISTS ETC. THESE FACTS WER E REVEALED DURING THE SEARCH PROCEEDINGS MADE ON 15.09.2008, WHICH WAS AL SO ADMITTED BY SHRI TARUN GOYAL THAT HE PROVIDED ACCOMMODATION ENTRIES AND HIS VARIOUS COMPANIES WERE USED FOR THIS PURPOSE. 4. THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FRESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL . 2. WE HAVE HEARD BOTH SIDES AND WE HAVE ALSO PERUSE D THE MATERIALS ON RECORD. FROM THE ABOVE, WE FIND THAT THE TAX EFFECT IN REVE NUES APPEAL IS LESS THAN RS.10,00,000/- . THEREFORE, THIS APPEAL IS COVERED BY INSTRUCTION NO. 21/2015 DATED 10 TH DECEMBER, 2015 OF CBDT, ISSUED VIDE F.NO. 279/MISC. 142/2007-ITJ (PT.) . FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE AF ORESAID CBDT CIRCULAR IS REPRODUCED AS UNDER: .. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: S NO APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMIT S PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECI DED ON MERITS OF THE CASE. ITA NO.3449/DEL/2011 ASSTT. YEAR 2008-09 ITO VS. NANCY SALES PVT. LTD. PAGE 3 OF 4 .. .. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTI ONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL WAS FILED. 3. WE ARE OF THE VIEW THAT THE AFORESAID CBDT INSTR UCTION NO. 21/2015 DATED 10 TH DECEMBER, 2015 IS APPLICABLE FOR THE PENDING APPEAL S FILED BY REVENUE, AS WELL AS FOR THE APPEALS TO BE FILED BY REVENUE HENCEFORTH. IN V IEW OF THE AFORESAID INSTRUCTION, THEREFORE, REVENUE SHOULD HAVE WITHDRAWN / NOT PRE SSED THE PRESENT APPEAL, SINCE THE TAX EFFECT IN THE INSTANT APPEAL IS LESS THAN THE P RESCRIBED LIMIT OF RS. 10,00,000/- , SPECIFIED IN THE AFORESAID CBDT INSTRUCTION NO. 21/ 2015 DATED 10 TH DECEMBER, 2015. 4. IN VIEW OF THE FOREGOING, WE CONCLUDE THAT THE A PPEAL IS INCONSISTENT WITH THE AFORESAID CBDT INSTRUCTION NO. 21/2015 DATED 10 TH DECEMBER, 2015; AND HOLD THAT THE APPEAL IS, THEREFORE, NOT MAINTAINABLE. ACCORDINGL Y, WE DISMISS THE APPEAL IN LIMINE, APPEAL BEING NOT MAINTAINABLE; WITHOUT GOING INTO T HE MERITS. 5. IN THE RESULT, THIS APPEAL, FILED BY REVENUE; ST ANDS DISMISSED. SD/- SD/- ( H.S. SIDHU ) ( ANADI N. MISHRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 ND AUGUST, 2016 *VEENA* ITA NO.3449/DEL/2011 ASSTT. YEAR 2008-09 ITO VS. NANCY SALES PVT. LTD. PAGE 4 OF 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. PRINCIPAL CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR