Income Tax Officer, Ward-1(3), Ajmer V. Shiv Shankar Fatehpuria, Ajmer

ITA 727/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3700 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 28-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Keywords: Earning of tax free income; Wrong claim; Accommodation entries; Tax effect; Sham transactions
• Section: 69C; 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, 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. 727/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2014-15. THE INCOME TAX OFFICER, WARD 1(3), AJMER. CUKE VS. SHRI SHIV SHANKAR FATEHPURIA, PROP. M/S. HARI IRON FOUNDRY, FOY SAGAR ROAD, AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.: AAAPF 8442 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI J.C. KULHARI (JCIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : NONE LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 01/08/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 02/08/2018 VKNS'K@ ORDER PER VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 26.03.2018 OF CIT (A), AJMER FOR THE ASSESSMENT YEAR 2014-15. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- ON FACTS AND IN LAW, THE LD. CIT (A), AJMER ERRE D IN :- 1) DELETING THE ADDITION OF RS. 48,24,836/- MADE U /S 68 OF THE I.T. ACT, 1961 ON ACCOUNT OF BOGUS CLAIM OF LTCG U/S 10( 38) AND ADDITION OF RS. 36,186/- MADE U/S 69C OF THE I.T. A CT, 1961 FOR COMMISSION PAYMENT, WITHOUT APPRECIATING THE FACTS OF THE CASE AND MODUS OPERANDI OF THE SCHEME WHICH CLEARLY PROV E THAT ALL THE TRANSACTIONS WERE SHAM TRANSACTIONS AND USED AS A COLORABLE DEVICE TO CREATE DOCUMENTARY EVIDENCES FOR CONVERTI NG UNACCOUNTED MONEY INTO TAX EXEMPT INCOME ; 2) DELETING BOTH THE ADDITIONS WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE MADE BOGUS CLAIM OF LTCG BY AVAILING 2 ITA NO. 727/JP/2018 SHRI SHIV SHANKAR FATEHPURIA, AJMER. ACCOMMODATION ENTRIES IN LISTED COMPANIES INCORPORA TED WITH A VIEW TO PROVIDE ACCOMMODATION ENTRY. M/S. PS IT INF RASTRUCTURE & SERVICES LIMITED WAS ONE OF SUCH COMPANY WHOSE DI RECTOR ALSO ADMITTED THAT THIS COMPANY IS A PAPER COMPANY ; 2) THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DELET E OR MODIFY THE ABOVE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEA RING. THUS IT IS CLEAR FROM THE GROUNDS RAISED BY THE REV ENUE THAT THE REVENUE IS CHALLENGING THE RELIEF GRANTED BY THE LD. CIT (A) O F RS. 48,24,836/- ON ACCOUNT OF ADDITION MADE UNDER SECTION 68 AND FURTHER RS. 36,1 86/- ON ACCOUNT OF ADDITION MADE UNDER SECTION 69C. THE TAX EFFECT IN THE REVEN UES APPEAL IS STATED TO BE RS. 15.02 LACS ON THE TOTAL ADDITION OF RS. 48.61 LACS WHICH WAS DELETED BY THE LD. CIT (APPEALS) AND THEREFORE, THE TAX EFFECT IN THE APPE AL OF THE REVENUE IS NOT EXCEEDING RS. 20 LACS. 2. THE LD. D/R HAS FAIRLY SUBMITTED THAT THE TAX EF FECT INVOLVED IN THE REVENUES APPEAL IS LESS THAN 20 LACS WHICH IS PRESCRIBED THR ESHOLD LIMIT IN TERMS OF THE CBDT CIRCULAR NO. 3/2018 DATED 11 TH JULY, 2018 ISSUED IN SUPERSESSION OF ITS EARLIER C IRCULAR NO. 21 OF 2015 DATED 10.12.2015. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS OBSERVED THAT THE DEMAND/ 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 PENDING APPEALS. 3 ITA NO. 727/JP/2018 SHRI SHIV SHANKAR FATEHPURIA, AJMER. 4. SUBJECT TO SOME EXCEPTIONS, IT IS FURTHER DIREC TED BY CBDT THAT ALL THE DEPARTMENTAL APPEALS PENDING BEFORE ITAT WHERE THE DEMAND/TAX EFFECT IS NOT EXCEEDING THAN 20 LACS SHOULD BE EITHER WITHDRAWN O R NOT PRESSED BY THE DEPARTMENTAL REPRESENTATIVES. 5. THE PRESENT APPEAL IS NOT COVERED BY ANY EXCEPT IONS MENTIONED IN THE SAID CBDT CIRCULAR. SINCE THE TAX DEMAND IN DISPUTE IN THIS DEPARTMENTAL APPEAL IS BELOW THE LIMIT SET OUT BY CBDT FOR THE APPEAL, THE APPEA L 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 PR ESSED/WITHDRAWN. 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/08/2 018. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 02/08/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE INCOME-TAX OFFICER, WARD 1(3) , AJMER. 2. THE RESPONDENT SHRI SHIV SHANKAR FATEHPURIA, A JMER. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 727/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 4 ITA NO. 727/JP/2018 SHRI SHIV SHANKAR FATEHPURIA, AJMER.