ITO 6(2)(1), MUMBAI V. M/S CAPTAIN PROPERTIES AND INVESTMENT PVT LTD., MUMBAI

ITA 7019/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9954 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 15-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIDD ARAMAP P A
• Keywords: Tax effect
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE SHRI SAKTIJIT DEY (JM) ITA NO. 7019 /MUM/2019 ASSESSMENT Y EAR: 2010 - 11 INCOME TAX OFFICER 6 (2)(1 ), 5 TH FLOOR, ROOM NO. 510, AAYAKAR BHAVAN, MUMBAI - 400020 VS. M/S CAPTAIN PROPERTIES AND INVESTMENTS PVT. LTD., 3 RD FLOOR, HAPPY HOME, 380, SHANKAR MATHAM ROAD, MATUNGA, MUMBAI - 400019 PAN: AA CC D8906F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHIDDARAM APPA (DR) ASSESSEE BY : SHRI DHARAN GANDHI (AR) DATE OF HEARING: 25/05 /20 21 DATE OF PRONOUNCEMENT: 09 / 07 /202 1 O R D E R THIS IS AN APPEAL BY THE REVENUE AGAINST ORDER DATED 03.07.2019 OF L EARNED COMMISS IONER OF INCOME T AX (APPEALS) 12 , MUMBAI F OR THE ASSESSMENT YEAR 201 0 - 11 . 2. AT THE OUTSET, LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE APPEAL IS NOT MAINTAINABLE DUE TO LOW TAX EFFECT. IN SUPPORT, HE RELIED UPON THE FOLLOWING DECISIONS: I) ITO VS LATE SHRI AMARCHAND P. SHAH, ITA NO.818 820/MUM/2 017 DATED 08/07/2019; II) ACIT VS M/S. NOCIL STEEL, ITA NO.3483/MUM/2017 DATED 05.02.2020; III) ITO VS M/S. NISHDISH INFRASTRUCTURE P. LTD., ITA NO.6003/MUM/2017 DATED 28.11.2019; IV) ACIT VS M/S. GIRIRAJ CIVIL DEVELOPERS PVT. LTD., ITA NO.1183/MUM/2017 DA TED 20.08.2019; V) ITO VS NIDHI PREMISES PVT. LTD., ITA NO.3607/MUM/2017 DATED 05.02.2020 2 ITA NO . 7019 / MUM/2019 ASSESSMENT YEAR: 2010 - 11 3. WHEREAS, LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY OPPOSING THE AFORESAID CONTENTION, DREW MY ATTENTION TO GROUND NO. 5 AND SUBMITTED THAT THE APPEAL IS PROTE CTED UNDER THE EXCEPTION PROVIDED IN PARAGRAPH 10(E) OF CIRCULAR NO. 3/2018 DATED 11.07.2018 AS AMENDED BY THE CENTRAL BOARD OF DIRECT TAXES VIDE LETTER DATED 20.08.2018. THUS, HE SUBMITTED, THE APPEAL BEING COVERED UNDER THE AFORESAID EXCEPTION HAS TO BE DECIDED ON MERITS. 4. I HAVE HEARD THE APPEAL ON THE PRELIMINARY AND LIMITED ISSUE OF MAINTAINABILITY DUE TO LOW TAX EFFECT AS PER THE CIRCULAR NO. 17/2019 DATED 08.08.2019. AS FAR AS THE QUANTUM OF DISPUTE FOR COMPUTING TAX EFFECT IS CONCERNED, UNDISPUTE DLY, THE TOTAL ADDITION MADE BY ASSESSING OFFICER (AO) IN THE ASSESSMENT ORDER IS TO THE TUNE OF RS. 9,45,000 / - . LEARNED COMMISSIONER (APPEALS) HAS DELETED THE ENTIRE ADDITION MADE BY THE AO. THEREFORE, ADMITTEDLY, THE TAX EFFECT ON THE AMOUNT DISPUTED BY THE REVENUE IN THE PRESENT APPEAL IS BELOW THE THRESHOLD LIMIT OF RS. 50 LAKH FIXED IN CIRCULAR NO. 17/2019 DATED 08.08.2019 FOR FILING OF APPEAL BEFORE THE TRIBUNAL. IT IS ALSO A FACT ON RECORD THAT THE AFORESAID APPEAL HAS BEEN FILED AFTER THE ISSUANCE O F CIRCULAR NO. 17/2019 REFERRED TO ABOVE. THEREFORE, THERE IS NO DOUBT THAT CIRCULAR NO. 17/2019 WOULD BE APPLICABLE TO THE PRESENT APPEAL. THOUGH, OF COURSE, IT IS ALSO APPLICABLE TO ALL PENDING APPEALS. THE STAND OF THE REVENUE IS, THE APPEAL IS PROTECTE D UNDER THE EXCEPTIONS PROVIDED UNDER PARAGRAPH 10(E) OF CBDT CIRCULAR F NO. 279/MISC.142/2007 - ITJ/(PT.) DATED 20.08.2018. THOUGH, THERE IS NO SPECIFIC GROUND IN THE GROUNDS OF APPEAL REGARDING MAINTAINABILITY OF THE APPEAL, HOWEVER, LEARNED DEPARTMENTAL R EPRESENTATIVE HAS DREW MY ATTENTION TO GROUND NO. 5 OF THE GROUNDS CONTAINED IN THE AUTHORIZATION MEMO. 5. BE THAT AS IT MAY, PARAGRAPH 10 (E) OF THE CIRCULAR NOTED ABOVE READS AS UNDER: - 10. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS 3 ITA NO . 7019 / MUM/2019 ASSESSMENT YEAR: 2010 - 11 THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT. (E) WHERE ADDITION IS BASED ON INFORMATION RECEIVED FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEME NT AGENCIES SUCH AS CBI/ED/DRI/SFIO/DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI) 6. ON A SPECIFIC QUERY FROM THE BENCH TO DEMONSTRATE, WHETHER THE AO HAD RECEIVED INFORMATION FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES AS MENTIONED I N PARAGRAPH 10(E) (SUPRA), THE LEARNED DEPARTMENTAL REPRESENTATIVE DREW OUR ATTENTION TO THE OPENING PARAGRAPH OF THE ASSESSMENT ORDER. 7. AS DISCUSSED EARLIER, PARAGRAPH 10(E) OF THE CIRCULAR REPRODUCED ABOVE CLEARLY SPEAKS OF INFORMATION RECEIVED FROM E XTERNAL SOURCES IN NATURE OF LAW ENFORCEMENT AGENCIES LIKE CBI/ED/DRI ETC. WHEREAS, IN THE ASSESSMENT ORDER, THE AO HAS VERY CLEARLY AND CATEGORICALLY STATED THAT HE HAS REOPENED THE ASSESSMENT BASED ON INFORMATION RECEIVED FROM THE OFFICE OF DGIT (INV.), MUMBAI. ON A CAREFUL READING OF ASSESSMENT ORDER, I HAVE NOT FOUND ANY REFERENCE TO INFORMATION RECEIVED FROM ANY OF THE EXTERNAL SOURCES AS MENTIONED IN PARAGRAPH 10(E) OF CIRCULAR DATED 20.08.2018. EVEN, IN COURSE OF HEARING, LEARNED DEPARTMENTAL REPRESE NTATIVE WAS UNABLE TO DEMONSTRATE THAT ANY INFORMATION FROM EXTERNAL SOURCES AS PER PARAGRAPH 10(E) OF CIRCULAR NOTED ABOVE WAS RECEIVED BY THE AO. THUS, IT IS TO BE CONCLUDED THAT THE ONLY INFORMATION AVAILABLE WITH THE AO WAS THE INFORMATION RECEIVED FRO M DGIT (INV.). 8. IN CASE OF ITO VS. LATE AMARCHAND P. SHAH (SUPRA) , THE TRIBUNAL HAS HELD THAT DGIT (INV.) SINCE WORKS UNDER THE CBDT, COULD NOT BE CALLED AN EXTERNAL SOURCE. THE AFORESAID DECISION HAS BEEN FOLLOWED IN A NUMBER OF DECISIONS OF THE TRIBUN AL AS CITED BY THE LEARNED AUTHORIZED REPRESENTATIVE. THUS, AS PER THE RATIO LAID DOWN IN THE DECISIONS REFERRED TO ABOVE, INFORMATION RECEIVED FROM DGIT (INV.) IS NOT OF THE NATURE AS REFERRED TO IN PARAGRAPH 10(E) OF CBDT CIRCULAR DATED 20.08.2018. THAT BEING THE CASE, THE PRESENT APPEAL OF THE 4 ITA NO . 7019 / MUM/2019 ASSESSMENT YEAR: 2010 - 11 DEPARTMENT WILL NOT BE PROTECTED UNDER THE EXCEPTION PROVIDED THEREIN. SINCE, AFORESAID DECISIONS ARE BY VARIOUS DIVISION BENCHES OF THE TRIBUNAL, THEY ARE BINDING PRECEDENTS. ACCORDINGLY, RESPECTFULLY FOLLOWING TH E AFORESAID DECISIONS CITED BY THE LEARNED AUTHORISED REPRESENTATIVE, I HOLD THAT THE INSTANT APPEAL OF THE REVENUE IS NOT PROTECTED BY PARAGRAPH 10(E) OF CBDT CIRCULAR DATED 20.08.2018. HENCE, WOULD NOT BE MAINTAINABLE IN VIEW OF THE CBDT CIRCULAR NO. 17/ 2019 DATED 08.08.2019. ACCORDINGLY, I DISMISS THE APPEAL. 9. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JULY , 2021 . SD/ - ( SAKTIJIT DEY ) JUDICIAL MEMBER MUMBAI ; DATED: 09 / 07 /2021 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI