ITO 6(1)(1), MUMBAI V. M/S ABINAV INVESTMENT & CONSULTANTS LTD., MUMBAI

MA 107/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7896 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-09-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 26-02-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase; Unexplained cash credit; Bogus Share capital; Accommodation entries; Tax effect
• Section: 68; 132

Judgement Text

MA NO 107/MUM/2020 IN ITA NO. 1685/MUM/2019 ASSESSMENT YEAR: 2013 - 14 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI 'D' BENCH, MUMBAI [CORAM: JUSTICE P.P. BHATT (PRESIDENT), AND PRAMOD KUMAR (VICE PRESIDENT)] MA NO 107/MUM/2020 IN ITA NO. 1685/MUM/2019 ASSESSMENT YEAR: 2013 - 14 INCOME TAX OFFICER - 6(1)(1) .APPLICANT MUMBAI VS. M/S ABINAV INVESTMENT &CONSULTANTS LTD. RESPONDENT 202, KALAMANDIR CHITRAKAR KETKAR MARG, PLAY GROUND X ROAD VILE PARLE (E) MUMBAI 400057 [PAN: AAACA6010D] APPEARANCES BY SUN IL DESHPANDE FOR THE APPLICANT RUSHABH MEHTA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING: : JULY 13, 2021 DATE OF PRONOUNCEMENT OF ORDER : S E P T E M B E R 0 2 , 2021 ORDER PER BENCH: 1. BY OF THIS MISCELLANEOUS APPLICATION, THE APPLICANT ASSESSING OFFICERS SEEKS RECALL OF THE ORDER DATED 21 ST AUGUST 2019, SUMMARILY DISMISSING THE DEPARTMENTAL APPEAL AS ON ACCOUNT OF LOW TAX EFFECT ON THE FOLLOWING GROUNDS: 5. THE DECISION OF THE HON'BLE ITAT IN DISMISSING THE REVENUE'S APPEAL AS WITHDRAWN/NOT PRESSED BASED ON THE LOW TAX EFFECT IS NOT ACCEPTABLE ON MERITS. THE ADDITION IN THIS CASE WAS MADE ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT VIDE LETTER NO. DGIT INV.)/INFORMATION/PJ/2013 - 14, DATED 07.03.2014, THAT A SEARCH ACTION U/S. 132 OF THE ACT, WAS CONDUCTED IN THE CASE OF PRAVEEN KUMAR JAIN & GROUP ON 01.10,2013 UNEARTHING OF ACCOMMODATION ENTRY OF RS.50,00,000/ - BY WAY OF UNSECURED LOAN WI TH THE ASSESSEE COMPANY. AS THE ASSESSEE COULD NOT EXPLAIN THE CREDITWORTHINESS AND MA NO 107/MUM/2020 IN ITA NO. 1685/MUM/2019 ASSESSMENT YEAR: 2013 - 14 PAGE 2 OF 3 GENUINENESS OF THE TRANSACTION, THE UNSECURED LOAN OF RS.50,00,000/ - WAS TREATED AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE . ON VERIFICATION OF THE CASE RECORD, IT IS SEEN THAT IN THE AUTHORISATION MEMO NO. PR.CIT/6/JUDICIAL/SECOND APPEAL/2018 - 19, DATED 18.03.2019 ON PARA 3 IT IS SPECIFICALLY MENTIONED 'THOUGH THE TAX EFFECT IN THIS CASE IS RS.15,45,000/ - HOWEVER THIS APPEAL H AS BEEN FIL ED BECAUSE IT IS COVERED BY EXCEPTION MENTIONED IN PARA 10(E) OF THE CBDT CIRCULAR NO.3/2018 DT. 11.7.2018 AS SUBSEQUENTLY CLARIFIED BY BOARD LETTER DID 20/08/2018 VIDE NO.279/MISC./142/2007 - ITJ/PT.).' 6. HOWEVER, THE HON'BLE ITAT HAS PROCEEDED TO DISMISS THE REVENUE'S APPEAL ON THE GROUND OF LOW TAX EFFECT. THE TAX EFFECT OF RS.15,45,000/ - IS BELOW THE REVISED LIMIT OF RS.50 LAKHS PRESCRIBED IN THE REVISED CBDT INSTRUCTION DATED 8.08.2019 BUT NEVERTHELESS COVERED BY PARA 10(E ) AND THE CASE FALLS UNDER THE EXCEPTION PROVIDED IN PARA 10(E) OF CBDT CIRCULAR HO.3/2018 DATED 11/07/2018 AS SUBSEQUENTLY CLARIFIED BY BOARD LETTER DATED 20/08/2018 VIDE NO.279/MISC/142/2007 - ITJ(PT.) AS THE HON'BLE ITAT HAS ERRED ON THE FACTS OF THE APPE AL, MISCELLANEOUS APPLICATION (M.A.) IS RECOMMENDED BEFORE THE HON'BLE ITAT ON THIS ISSUE TO ENABLE THE CASE TO BE REVIVED AND ARGUED ON MERITS. 7. IN VIEW OF THE ABOVE CIRCUMSTANCES, FILING OF MISCELLANEOUS APPLICATION (M.A.) BEFORE THE HON'BLE ITAT IS SUGGESTED IN THIS CASE WITH THE FOLLOWING GROUNDS OF APPEAL. 7.1 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE HON'BLE ITAT D' BENCH MUMBAI, WAS RIGHT IN DISMISSING THE APPEAL FILED BY REVENUE ONLY BY EXAMINING THE MONETARY LIMIT AS PRESCRIBED BY CBDT CIRCULAR NO.17/2019 DATED 08.08.2019 AMENDING CIRCULAR NO.3/2018, DATED 11.07.2018 & 20.08.2018 AND NOT DECIDING THE CASE ON MERITS.' 7.2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW AND THE CBDT CIRCULAR NO.17/2019 DATED 08.08.2019 AMENDING CIRCULAR NO.3/2018, DATED 11.07.2018 & 20.08.2018, THE MISCELLANEOUS APPLICATION NEEDS TO BE FILED CONSIDERING THE FACTS THAT T HERE WAS SPECIFIC INFORMATION RECEIVED FROM DGIT(INV.) VIDE LETTER DATED 07.03.2014 STATING THAT A SEARCH ACTION U/S. 132 OF THE ACT WAS CONDUCTED IN THE CASE OF PRAVEEN KUMAR JAIN & GROUP ON 01.10,2013 UNEARTHING ACCOMMODATION ENTRIES IN THE SHAPE OF BOGU S UNSECURED LOANS, BOGUS SHARE APPLICATION OR SHARE CAPITAL MONEY, BOGUS BILLS OF LTCG/STCG AND BOGUS PURCHASES BILLS ROUTED THROUGH COMPANIES UNDER HIS CONTROL INVOLVING THE ASSESSES COMPANY AND OTHERS RESULTING IN THE BOGUS UNSECURED LOAN OF RS.50,00,000 / - BEING TREATED AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSES. THIS BEING SO, THE CASE SQUARELY FAILS UNDER THE EXCEPTIONS / CATEGORY OF 10(E) OF THE SAID CBDT CIRCULAR NO.3/2018 DATED 11.07.2018, ITS AMENDMEN T THERETO 20.08.2019 AND LATEST CIRCULAR NO.17/2019 DATED 08.08.2019 AND THE TAX EFFECT OF RS.15,45,000/ - .' 7.3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR TO SUBMIT ADDITIONAL NEW GROUND WHICH MAY BE NECESSARY.' MA NO 107/MUM/2020 IN ITA NO. 1685/MUM/2019 ASSESSMENT YEAR: 2013 - 14 PAGE 3 OF 3 . 2. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 3. WE FIND THAT EVEN GOING BY THE STATEMENT MADE BY THE ASSESSING OFFICER IN THE PRESENT MISCELLANEOUS APPLIC ATION THE CONDITIONS WERE MADE ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING. THE CASE OF THE APPLICANT IS THAT SINCE THE INFORMATION RECEIVED FROM THE INVESTIGATION WING THE CASE WILL BE COVERED THE EXEMPTION UNDER CLAUSE 10 (E) OF CBDT CIR CULAR DATED 11.07.2018 READ WITH CIRCULAR DATED 20.08.2018. HOWEVER WHAT HAS CLEARLY BEEN OVERLOOKED IS THAT CLAUSE 10(E) COMES INTO PLAY ONLY WHEN THE INFORMATION IS RECEIVED FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES. SINCE, IN THE PRESENT CASE, THE INFORMATION IS RECEIVED FROM AN INTERNAL AGENCY I.E., INVESTIGATION WING, CLAUSE 10(E), IN OUR CONSIDERED VIEW, IS NOT ATTRACTED. IN VIEW OF THE ABOVE DISCUSSION, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE DEEM IT FIT AND PROPER TO REJECT THE MISCELLANEOUS APPLICATION. WE ORDER, ACCORDINGLY. 4. IN THE RESULT, THIS MISCELLANEOUS APPLICATION IS DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 0 2 N D DAY OF S E P T E M B E R , 202 1. S D / - S D / - JUSTICE P.P. BHATT PRAMOD KUMAR (PRESIDENT) (VICE PRESIDENT) MUMBAI, DATED THE 0 2 N D S E P T E M B E R , 2021 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, MUMBAI