ITO 24(1)1, MUMBAI V. BHAVESH R. KAPADIA, MUMBAI

ITA 620/MUM/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0989 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 24-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JEETENDRA SINGH
• Keywords: Accommodation entries; Tax effect; Sham transactions
• Section: 132

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.620/MUM/2014 ASSESSMENT YEAR: 2004-05 INCOME TAX OFFICER-24(1)-1, ROOM NO. 607, C-13, 6 TH FLOOR, PRATAYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, MUMBAI-400051 / VS. M/S BHAVESH RAJESH KAPADIA, 601, SHREE NIKETAN, HINDU FRIENDS SOCIETY ROAD, JOGESHWARI (EAST), MUMBAI-400060 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO. AIQPK1373A / REVENUE BY DR. YOGESH KAMAT-DR !' # / ASSESSEE BY SHRI JEETENDRA SINGH $ % & # ' / DATE OF HEARING : 02/07/2015 & # ' / DATE OF ORDER: 04/08/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 18/11/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: - 1 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIO N OF RS. 10,70,060/- MADE BY THE ASSESSING OFFICER AS INCOME FROM UNDISCL OSED SOURCES M/S BHAVESH RAJESH KAPADIA. ITA NO.620/MUM/2014 2 IGNORING THE FACT THAT M/S. MAHASAGAR SECURITIES PVT. LTD. AND ITS OTHER GROUP CONCERNS WERE NOT CARRYING ON GENUINE BUSINES S AND WERE ONLY ISSUING BOGUS BILLS 1 ACCOMMODATION ENTRIES FOR PRO VIDING LONG TERM CAPITAL GAINS 1 LONG TERM CAPITAL LOSS AND ALL THE TRANSACTIONS CARRIED OUT BY THEM ARE SHAM TRANSACTIONS.' 2. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. C.LT. (A) ERRED IN DELETING THE ADDITI ON MADE IGNORING THE FACT THAT DURING THE COURSE OF SEARCH ACTION U/S. 132 SHRI MUKESH CHOKSI IN HIS STATEMENT RECORDED ON OATH ON 25/11/2009 HAS STATE THAT ALL THE TRANSACTIONS ARE BOGUS AND THEY ONLY PROVIDE ACCOMMODATION BILLS'. 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION M ADE IGNORING THE FACT THAT 'THE TRANSACTIONS HAVE NOT BEEN ROUTED THROU GH RECOGNIZED STOCK EXCHANGE AND ONLY FICTITIOUS BILLS HAVE BEEN PR EPARED TO SHOW THAT TRANSACTION HAVE TAKEN PLACE THROUGH STOCK EXCHANGE S'. 4. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MA DE IN SPITE OF THE FACT THAT MAHASAGAR SECURITIES PVT. LTD. IN THEIR RETU RN OF INCOME HAVE SHOWN THEIR BUSINESS AS ENTRY PROVIDER'. 2. DURING HEARING OF THIS APPEAL, SHRI YOGESH KAMAT, LD. DR, DEFENDED THE CONCLUSION ARRIVED AT I N THE ASSESSMENT ORDER. ON THE OTHER HAND, THE LD. COUNS EL FOR THE ASSESSEE, SHRI JEETENDRA SINGH, DEFENDED THE CO NCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY CONTENDING THAT THE TAX EFFECT IN THE PRESENT APPEAL IS LESS THAN THE PRESC RIBED MONETARY LIMIT FOR FILING THE APPEAL BEFORE THE TRI BUNAL. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE FACT THAT THE TAX EFFECT IN THE APPEAL IS BELOW PRESCRI BED MONETARY LIMIT AS CONTAINED IN CBDT INSTRUCTION NO. 3/2011 DATED 09/02/2011, FURTHER INSTRUCTION NO.5/2014 (F NO.279/MISC./142/2007-IT(PT) DATED 10/07/2014. THE M/S BHAVESH RAJESH KAPADIA. ITA NO.620/MUM/2014 3 CBDT REVISED THE MONETARY LIMIT FOR FILING THE APPE AL BEFORE VARIOUS AUTHORITIES/COURTS AND ADVISED/DIRECTED THE DEPARTMENT NOT TO FILE APPEAL IN THE CASES WHERE TH E TAX EFFECT DOES NOT EXCEED THE FOLLOWING MONETARY LIMIT S, THE APPEALS OF THE REVENUE IS NOT MAINTAINABLE. THE RE VISED MONETARY LIMIT IS AS UNDER:- SL. NO. APPEALS IN INCOME TAX MATTERS MONETARY LIMIT (IN RS.) 1. BEFORE APPELLATE TRIBUNAL 4,00,000/ - 2. U/S 260 A BEFORE HIGH COURT 10,00,000/ - 3. BEFORE SUPREME COURT 25,00,000/ - AS PER THE AFORESAID INSTRUCTION, THE DEPARTMENT IS NOT TO FILE APPEAL BEFORE THE TRIBUNAL, WHEREIN THE TAX EFFECT IS LESS THAN RS.4,00,000/-, CONSEQUENTLY, CONSIDERING THE DECISION FROM THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PITHWA ENGINEERING WORKS (276 ITR 519) (BOM ) , THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE. THEREFO RE, IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DIS MISSED AS NOT MAINTAINABLE. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED AS NOT MAINTAINABLE. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN TH E PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 02/07/2015. SD/- SD/- ( RAJENDRA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ( DATED : 04/08/2015 F{X~{T? P.S/. . . M/S BHAVESH RAJESH KAPADIA. ITA NO.620/MUM/2014 4 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 $ 1# ( *+ ) / THE CIT, MUMBAI. 4. 0 0 $ 1# / CIT(A)- , MUMBAI 5. 34 .# , 0 *+' * 5 , $ % / DR, ITAT, MUMBAI 6. 6! 7% / GUARD FILE. / BY ORDER, /3+# .# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI