INCOME TAX OFFICER, JAIPUR V. M/S C.M. GOENKA CAPITAL MARKETS PVT. LTD., JAIPUR

ITA 510/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6363 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 16-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Assessee Lawyers: S L PODDAR; ISHA KANOONGO ADV DH RKJ
• Keywords: Tax effect
• Section: 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 510/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER, WARD-2(2), JAIPUR. CUKE VS. M/S C.M. GOENKA CAPITAL MARKETS PVT. LTD., 206, JAIPUR TOWER, M.I. ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACC 7518 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT IZR;K{KSI.K @ C.O. NO. 17/JP/2018 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 510/JP/2018) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR 2009-10 M/S C.M. GOENKA CAPITAL MARKETS PVT. LTD., 206, JAIPUR TOWER, M.I. ROAD, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD-2(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA- @ PAN/GIR NO.: AAACC 7518 A IZR;K{KSID @ OBJECTOR IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJ MEHRA (JCIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S.L. PODDAR & MS. ISHA KANOONGO (ADV.) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 31/07/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 31/07/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M.: THIS IS THE APPEAL FILED BY THE REVENUE AND THE CRO SS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) , KOTA DATED ITA 510/JP/2018 & C.O. 17/JP/2018_ ITO VS C.M. GOENKA CAPITAL MARKETS P LTD. 2 19/01/2018 PERTAINING TO THE A.Y. 2009-10 WHEREIN, T HE REVENUE AND THE ASSESSEE HAVE TAKEN FOLLOWING GROUNDS OF APPEAL: GROUNDS OF REVENUES APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) HAS ERRED IN: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 35,31 ,603/- MADE BY THE A.O. ON ACCOUNT OF SUPPRESSION OF PROFIT BY TAK ING FICTITIOUS LOSS ENTRIES THROUGH CLIENT CODE MODIFICATION? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE A DDITION OF RS. 70,632/- MADE BY THE A.O. ON ACCOUNT OF COMMISSION PAYMENTS? GROUNDS OF ASSESSEES C.O.: 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN PASSING THE ORDER U/S 148 OF THE INCOME TAX ACT, 19 61. 2. IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE A.O. ERRED IN ISSUING NOTICE U/S 148 EVEN THOUGH SU CH REOPENING ON THE BASIS OF ALLEGED CLIENT CODE MODIFICATION IS STRUCK DOWN BY THE BOMBAY HIGH COURT IN THE CASE OF CORONATION AGR O INDUSTRIES LTD. (WRIT PETITION NO. 2627 OF 2016) AND CONSEQUEN TLY ORDER PASSED U/S 148/143(3) IS AB-INITIO-VOID. 3. THE ASSESSEE CARVES YOUR INDULGENCE TO ADD, AMEN D OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEAR ING. 2. FIRSTLY, WE WILL TAKE UP THE CROSS OBJECTION FILED BY THE ASSESSEE WHEREIN IT HAS CHALLENGED THE ACTION OF THE ASSESSIN G OFFICER IN ISSUING THE NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). ITA 510/JP/2018 & C.O. 17/JP/2018_ ITO VS C.M. GOENKA CAPITAL MARKETS P LTD. 3 2.1 AT THE OUTSET OF HEARING, THE LD AR OF THE ASSE SSEE HAS NOT PRESSED THE GROUNDS OF THE C.O., THEREFORE, THE SAM E STANDS DISMISSED AS NOT PRESSED. 3. NOW WE TAKE THE REVENUES APPEAL: AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE HAS RAISED AN OBJECTION OF MAINTAINABILITY OF THE APPEAL OF THE R EVENUE DUE TO THE TAX EFFECT NOT EXCEEDING RS. 20 LACS AS PER THE CBDT CIR CLE NO. 3 OF 2018 DATED 11 TH JULY, 2018. THE LD. A/R SUBMITTED THAT IN THE FACT S OF THE PRESENT CASE, TAX EFFECT IN REVENUES APPEAL IS STA TED TO BE RS. 11,13,091/- ON THE ADDITION OF RS 54,02,380/- WHICH IS BELOW THE PRESCRIBED LIMIT OF RS 20 LACS. 4. THE LD. D/R HAS FAIRLY SUBMITTED THAT THE TAX EFF ECT INVOLVED IN THE REVENUES APPEAL IS LESS THAN 20 LACS WHICH IS PRESC RIBED THRESHOLD LIMIT IN TERMS OF THE CBDT CIRCULAR NO. 3/2018 DATED 11 TH JULY, 2018 ISSUED IN SUPERSESSION OF ITS EARLIER CIRCULAR NO. 21 OF 2015 DATED 10.12.2015. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS OBSERVED THAT THE DEMAN D/ TAX EFFECT IN THE REVENUES APPEAL IN QUESTION IS BELOW RS. 20.00 LACS . UNDER THE POWERS VESTED BY SECTION. 268A(1) OF THE I T ACT, CBDT HAS RECENTLY ISSUED CIRCULAR NO. 3/2018 DATED 11 TH JULY, 2018 (F NO. 279/MISC. 142/2007-ITJ(PT) INSTRUCTING THE AUTHORITIES BELOW THAT DEPARTMENTAL APPEAL SHOULD NOT BE FILED BEFORE ITAT WHERE THE DEMAND/TAX EFFECT DOES NOT EXCEED RS. 20 LACS. THE CIRCULAR IS SPECIFICALLY MENTIONED TO BE APPLICABLE FOR ALL PEN DING APPEALS. 6. SUBJECT TO SOME EXCEPTIONS, IT IS FURTHER DIREC TED BY CBDT THAT ALL THE DEPARTMENTAL APPEALS PENDING BEFORE ITAT WHERE THE DEMAND/TAX ITA 510/JP/2018 & C.O. 17/JP/2018_ ITO VS C.M. GOENKA CAPITAL MARKETS P LTD. 4 EFFECT IS NOT EXCEEDING THAN 20 LACS SHOULD BE EITH ER WITHDRAWN OR NOT PRESSED BY THE DEPARTMENTAL REPRESENTATIVES. 7. THE PRESENT APPEAL IS NOT COVERED BY ANY EXCEPTI ONS MENTIONED IN THE SAID CBDT CIRCULAR. SINCE THE TAX DEMAND IN DISP UTE IN THIS DEPARTMENTAL APPEAL IS BELOW THE LIMIT SET OUT BY CB DT FOR THE APPEAL, THE APPEAL OF THE ASSESSEE IS NOT MAINTAINABLE IN VIEW OF CBDT CIRCULAR NO. 3 OF 2018 DATED 11.07.2018. ACCORDINGLY THE APPEAL OF THE DEPARTMENT IS DISMISSED AS NOT PRESSED/WITHDRAWN. 8. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D THE C.O. OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/07/2018 SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 31ST JULY, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD-2(2), JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- M/S C.M. GOENKA CAPITAL MARKETS PVT. LTD., JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 510/JP/2018 & CO 17/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR