DCIT CENT. CIR. 8(3) ERSTWHILE DCIT CENT. CIR. - 46, MUMBAI V. ROSY BLUE (INDIA) PVT. LTD., MUMBAI

ITA 4091/MUM/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3485 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 07-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJITKUMAR SRIVASTAVA
• Keywords: Bogus purchase; Business income; Depreciation; Tax effect
• Section: 153A; 14A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 4091/MUM/2018 (ASSESSMENT YEAR 2007-08) DCIT, CC-8(3) ERSTWHILE DCIT,CC-46 ROOM NO. 659 6 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020 . VS. M/S. ROSY BLUE (INDIA) PVT. LTD. 1608-09, PRASAD CHAMBERS OPERA HOUSE MMBAI-400 004. PAN : AACCR2413B (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI NITESH JOSHI DEPARTMENT BY SHRI AJIT KUMAR SRIVASTAVA DATE OF HEARING 02.03.2021 DATE OF PRONOUNCEMENT 02.03.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDE R OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [IN SHORT LEAR NED CIT(A)] DATED 26.3.2018 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS OF APPEAL READ AS UNDER :- 1. 'WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN HOLDING THAT THE SCOPE OF S ECTION 153A IS LIMITED TO ASSESSING ONLY SEARCH RELATED INCOME, THEREBY DENYIN G REVENUE THE OPPORTUNITY OF TAXING OTHER ESCAPED INCOME, THAT COMES TO THE NOTICE OF THE AO?' 2. 'WHETHER IN THE FACTS AND THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE DISALLOWANC E OF RS. 59,89,042/- ON ACCOUNT OF DEPRECIATION ON KANDIVALI FACTORY PREMISE S WHEN THE SAID PREMISES ALONG WITH ALL ITS FIXTURES IS BEING USED BY AGENCIES TO WHOM JOB WORK IS OUTSOURCED BY THE ASSESSEE.?' 3. 'WHETHER IN THE FACTS AND THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED TREATING RECEIPTS FROM JOB C ONTRACTORS AMOUNTING TO RS. 24,000/- AS BUSINESS INCOME INSTEAD OF INCOME FROM HOUSE PROPERTY CONSIDERING THE SAID PREMISES AT KANDIVALI ALONG WITH ALL ITS FIXTURES HAVE BEEN LEASED TO THE OUTSOURCING AGENTS (JOB CONTRACTORS) ?' M/S. ROSY BLUE (INDIA) PVT. LTD. 2 4. 'WHETHER IN THE FACTS AND THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE DISALLOWANCE U/S 14A OF RS. 5,00,000/- MADE BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACT THAT THE DEPARTMENT IS IN APPEAL BEFORE THE HON'BLE SUPREME C OURT ON THIS ISSUE IN THE CASE OF M/S JSW ENERGY LTD. FOR THE A.Y. 2006-07? ' 5. 'WHETHER IN THE FACTS AND THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANC E OF RS. 24,07,457/- ON ACCOUNT OF BOGUS PURCHASES AND RESTRICTING THE DISALLO WANCE TO 5% IGNORING THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF N.K. PROTEINS LTD. VS. DCIT IN WHICH UPTO 100% OF BOGUS PURCHASES W ERE DISALLOWED AND IN WHICH SLP OF THE ASSESSEE IS DISMISSED?' 3. AT THE OUTSET IT IS NOTED THAT THAT THE TAX EFFE CT IN THIS CASE IS BELOW THE LIMIT OF RS. 50,00,000/- FIXED BY CBDT VIDE CIRCULA R NO. 17/2019 DATED 8/8 2019 FOR FILING APPEAL BEFORE THE ITAT. HENCE THIS APPEAL BY THE REVENUE IS NOT MAINTAINABLE. 4. LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT DI SPUTE THAT THE TAX EFFECT IS BELOW THE SAID LIMIT. HE COULD NOT POINT OUT THAT THE APPEAL FALLS IN ANY OF THE EXCEPTIONS CARVED IN SAID CIRCULAR. 5. UPON CAREFUL CONSIDERATION WE FIND THAT AS THE T AX EFFECT IS BELOW THE LIMIT FIXED BY CBDT FOR FILING APPEALS BEFORE THE I TAT, THIS APPEAL BY THE REVENUE IS LIABLE TO BE DISMISSED IN LIMINE. THE RE VENUE WILL HAVE LIBERTY TO SEEK RESTORATION OF THE APPEAL IF THE TAX EFFECT IS FOUND TO BE BEYOND THE ABOVE LIMIT. 6. ACCORDINGLY THE APPEAL STANDS DISMISSED AS SUCH. PRONOUNCED IN THE OPEN COURT ON 2.3.2021. SD/- SD/- (AMARJIT SINGH) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUN TANT MEMBER MUMBAI; DATED : 02/03/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT M/S. ROSY BLUE (INDIA) PVT. LTD. 3 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI