ITO 25(2)(1), MUMBAI V. ACTUBE ENTERPRISES, MUMBAI

MA 189/MUM/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7494 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-05-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 08-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D G
• Assessee Lawyers: ASHIT MODY LD
• Keywords: Bogus purchase; Audit objection; Accommodation entries; Tax effect

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM M.A. NO. 189/MUM/2019 [ARISING OUT OF I.T.A. NO.3941/MUM/2017] ( / ASSESSMENT YEAR: 2010-11) INCOME TAX OFFICER 25(2)(1) R.NO.505, C-10, 5 TH FLOOR PRATYAKSHKAR BHAWAN BANDRA KURLA COMPLEX MUMBAI 400 051 / VS. ACTUBE ENTERPRISES 27, LAXMI FLAT OWNERS CHS LTD. MG ROAD EXTENSION, VILE PARLE-E MUMBAI-400 057 ./ ./PAN/GIR NO. AABFA-2570-J ( ' # /APPELLANT ) : ( $%# / RESPONDENT ) ASSESSEE BY : SHRI ASHIT MODY LD. AR REVENUE BY : SHRI D.G. PANSARI LD. DR / DATE OF HEARING : 03/05/2019 / DATE OF PRONOUNCEMENT : 03/05/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1. BY WAY OF THIS APPLICATION, THE REVENUE SEEKS RECAL L OF THE ORDER OF THE TRIBUNAL ITA NO. 3941/MUM/2017 DATED 03/08/2018 WITH RESPECT TO CAPTIONED ASSESSEE PASSED IN BUNCH OF APPEALS. B Y WAY OF 2 COMMON ORDER, THE TRIBUNAL HAD DISMISSED THE REVENU ES APPEAL SINCE THE QUANTUM OF TAX EFFECT OF ALL THE APPEALS WAS BE LOW THRESHOLD LIMIT OF RS.20 LACS AS PRESCRIBED BY CBDT CIRCULAR NO. 03 /2018 DATED 11/07/2018. 2. DRAWING OUR ATTENTION TO THE APPLICATION, LD. AU THORIZED DEPARTMENTAL REPRESENTATIVE [DR], SUBMITTED THAT AL THOUGH THE TAX EFFECT WAS LESS, HOWEVER, THE MATTER UNDER DISPUTE WAS COVERED BY EXCEPTION PROVIDED IN PARA 10(E) OF THE SAID CIRCUL AR READ WITH CLARIFICATION ISSUED BY CBDT ON 20/08/2018. IT HAS BEEN SUBMITTED THAT THE CASE WAS REOPENED PURSUANT TO RECEIPT OF I NFORMATION FROM SALES TAX DEPARTMENT MAHARASHTRA THAT THE ASSESSEE MADE ALLEGED BOGUS PURCHASES FROM CERTAIN ENTITIES AND THEREFORE, SUCH CASES FAL L WITHIN THE EXCEPTION PROVIDED UNDER THE CIRCULAR. O UR ATTENTION HAS BEEN DRAWN TO THE FACT THAT LIBERTY WAS ALREADY PRO VIDED UNDER THE ORDER TO THE REVENUE TO SEEK RECALL UPON POINTING O UT ANY EXCEPTIONS. THE LD. AR COULD NOT CONTROVERT THE SAME. 3. UPON PERUSAL, WE FIND FORCE IN THE ARGUMENT OF L D. DR SINCE THE SCOPE OF EXCEPTION AS GIVEN IN CIRCULAR NO. 03/2018 DATED 11/07/2018 HAS BEEN WIDENED VIDE CLARIFICATION F. NO 279/MISC. 142/2007-ITJ (PT) DATED 20/08/2018 AMENDING PARA 10 OF THE SAID CIRCU LAR. THE SAME READS AS UNDER: - SUBJECT: AMENDMENT TO PARA 10 OF THE CIRCULAR NO. 3 OF 2018 DATED 11.07.2018-REG: MADAM/SIR, KINDLY REFER TO THE ABOVE. 2. THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL, H IGH COURTS AND SLPS/APPEALS BEFORE SUPREME COURT HAVE B EEN REVISED BY BOARDS CIRCULAR NO. 3 OF 2018 DATED 11.07.2018. 3 3. PARA 10 OF THE SAID CIRCULAR PROVIDES THAT ADVER SE JUDGMENTS RELATING TO THE ISSUES ENUMERATED IN T HE SAID PARA SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONET ARY LIMITS SPECIFIED IN PARA 3 THEREOF OR THERE IS NO T AX EFFECT. PARA 10 OF THE CIRCULAR NO. 3 OF 2018 DA TED 11.07.2018 IS HEREBY AMENDED AS UNDER: 10. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING IS SUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LES S THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE IS UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE ADDITION RELATES TO UNDISCLOSED FOREIGN I NCOME / UNDISCLOSED FOREIGN ASSETS (INCLUDING FINANCIAL ASSETS)/ UNDISCLOSED FOREIGN BANK ACCOUNT . (E) WHERE ADDITION IS BASED ON INFORMATION RECEIVED FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES SUCH AS CBI/ ED/ DRI/ SFIO/ DI RECTORATE GENERAL OF GST INTELLIGENCE (DGGI). UPON PERUSAL OF FACTUAL MATRIX, IT TRANSPIRES THAT THE ASSESSEES CASE WAS REOPENED UPON RECEIPT OF INFORMATION FROM EXTER NAL SOURCES THAT THE ASSESSEE INDULGED IN PRACTICE OF INFLATING THE PURCHASES BY TAKING ACCOMMODATION ENTRIES THROUGH THE HAWALA PARTIES. 4. THEREFORE, WE ARE INCLINED TO RECALL THE ORDER W ITH RESPECT TO THE CAPTIONED ASSESSEE ONLY WITHOUT DISTURBING THE ORDE R FOR REST. WE ORDER SO. THE REVENUES APPEAL STANDS RESTORED TO I TS ORIGINAL STATUS. 5. THE REGISTRY IS DIRECTED TO FIX THE APPEAL BEFOR E REGULAR BENCH IN REGULAR COURSE AFTER DUE INTIMATION OF NEW DATE OF HEARING TO RESPECTIVE SIDES. 6. RESULTANTLY, THE APPLICATION STANDS ALLOWED IN T ERMS OF OUR ABOVE ORDER. 4 ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD MAY, 2019. SD/- SD/- (SAKTIJIT DEY) (MA NOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED :03/05/2019 PS:- SHEKHAR ! / COPY OF THE ORDER FORWARDED TO : 1. ' # / THE APPELLANT 2. $%# / THE RESPONDENT 3. ( ' ) / THE CIT(A) 4. / CIT CONCERNED 5. + ,$ - , ' - , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI