ITO-4(3)(2), MUMBAI V. M/S. KEN FINANCIAL SERVICES LTD., MUMBAI

ITA 7960/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3549 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 26-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY SETHILD DR
• Keywords: Tax effect; Penny stocks; Capital Gains
• Section: 143(3)

Judgement Text

1 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.7960/MUM/2019 ( / ASSESSMENT YEAR: 2009-10) I TO - 4 ( 3 )( 2 ) ROOM NO.648, 6 TH FLOOR AAYKAR BHAWAN, NEW MARINE LINES MUMBAI-400 020 / VS. M /S. KEN FINANCIAL SERVICES LIMITED 302, STANDARD HOUSE 83, M.K. ROAD, MARINE LINES MUMBAI-400 002 ./ ./ PAN/GIR NO. AAACK-4929-K ( + / APPELLANT ) : ( ./+ / RESPONDENT ) + 0/ APPELLANT BY : SHRI SANJAY SETHI-LD.DR ./+ 0 / RESPONDENT BY : NONE / DATE OF HEARING : 08/06/2021 / DATE OF PRONOUNCEMENT : 08/06/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. THE REVENUE CHALLENGES THE ORDER OF LD. COMMISSI ONER OF INCOME-TAX (APPEALS)-9, MUMBAI, [CIT(A)] DATED 24/10/2019 WHIC H HAS DELETED THE ADDITIONS OF RS.7 LACS AS MADE BY LD. AO WHILE FRAM ING AN ASSESSMENT U/S 143(3) R.W.S. 147 ON 28/12/2016. 2 2. THOUGH NONE APPEARED FOR ASSESSEE, HOWEVER, IT T RANSPIRES THAT THE TAX EFFECT OF QUANTUM ADDITIONS UNDER DISPUTE BY RE VENUE IS BELOW RS.50 LACS AND THEREFORE, THE APPEAL IS NOT MAINTAINABLE IN TERMS OF CBDT LOW TAX EFFECT CIRCULAR NO.17/2019 DATED 08/08/2019 [F.NO.2 79/MISC.142/2007- TTJ(PT.) GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE]. 3. THE LD. DR STRESSED THAT THE REASSESSMENT PROCEE DINGS WERE TRIGGERED PURSUANT TO RECEIPT OF CERTAIN INFORMATIO N FROM DGIT (INVESTIGATION) AND THEREFORE, THE MATTER WOULD FALL UNDER EXCEPTIO N 10(E) OF THE CIRCULAR. HOWEVER, WE ARE OF THE CONSIDERED OPINION THAT THE DIRECTORATE OF INCOME TAX (INVESTIGATION) IS A LAW ENFORCEMENT AGENCY UND ER THE CONTROL OF MINISTRY OF FINANCE AND WOULD THUS CONSTITUTE INTER NAL AGENCY / WING OF INCOME TAX DEPARTMENT WHICH WORKS UNDER THE AEGIS O F ITS CONTROLLING AUTHORITY CBDT AND THEREFORE, IT COULD NOT BE CONSI DERED AS EXTERNAL SOURCE AS IS REFERRED TO IN PARA 10(E) OF CBDT CIR CULAR DATED 20/08/2018. WHEN CBDT IS REFERRING TO EXTERNAL SOURCES, IT IS C ERTAINLY REFERRING TO SOURCES WHICH ARE NOT INTERNAL SOURCES WITHIN THE I NCOME TAX DEPARTMENT AND VARIOUS WINGS FUNCTIONING WITHIN ITS AEGIS. IT COULD ALSO BE SEEN THAT THE SUBSEQUENT CBDT CIRCULAR NO. 23 OF 2019 DATED 06/09 /2019 READ WITH OFFICE MEMORANDUM DATED 16/09/2019 APPLIES ONLY TO CASES INVOLVING BOGUS LONG-TERM CAPITAL GAINS (LTCG) / SHORT TERM C APITAL LOSS (STCL) ON PENNY STOCKS. THE SAME IS NOT THE CASE HERE. 4. IN VIEW OF THE FOREGOING, THE REVENUES APPEAL I S NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. AT THE SAME TIME, A LIBE RTY IS GIVEN TO REVENUE TO SEEK RECALL OF THE APPEAL, IF AT A LATER STAGE, IT IS FOUND THAT THE MATTER IS 3 COVERED BY ANY EXCEPTIONS PROVIDED IN ANY OF THE CI RCULAR OR IN CASE THE TAX EFFECT AS AGITATED BY REVENUE EXCEEDS THE PRESCRIBE D MONETARY LIMIT. 5. IN THE RESULT, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON 08 TH JUNE, 2021. SD/- SD/- (VIKAS AWASTHY) (MANOJ KUMAR AGGARWAL) HI / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; I DATED : 08/06/2021 SR.PS, JAISY VARGHESE 01234514 / COPY OF THE ORDER FORWARDED TO : 1. + / THE APPELLANT 2. ./+ / THE RESPONDENT 3. K ( ) / THE CIT(A) 4. K / CIT CONCERNED 5. I LM .I?IIN , IN , / DR, ITAT, MUMBAI 6. MOPQ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.