ITO, New Delhi V. M/s. Apoorva Leasing Finance and Investments Company Ltd., New Delhi

MA 87/DEL/2020

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6668 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-10-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-05-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 27-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Accommodation entries; Tax effect; Penny stocks
• Section: 14A

Judgement Text

Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”: NEW DELHI BEFORE SHRI C. N. PRASAD, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER MA No. 87/Del/2020 (In ITA No. 6239/Del/2016) (Assessment Year: 2012-13) ITO, Ward-3(1), New Delhi Vs. Apoorva Leasing Finance and Investments Company Ltd, 104-A, Single Storey, Ramesh Nagar, New Delhi (Appellant) (Respondent) PAN: AABCA0282A Assessee by : Sh. Somil Agarwal, Adv Sh. Deepesh Garg, Adv Revenue by: Sh. Bhopal Singh, Sr. DR Date of Hearing 09/06/2023 Date of pronouncement 10/10/2023 O R D E R PER M. BALAGANESH, A. M.: 1. By virtue of this miscellaneous application, the revenue seeks to recall the order passed by this tribunal in ITA No. 6239/Del/2016 dated 19.9.2019 for the Asst Year 2012-13 on the ground that the appeal of the revenue was dismissed by wrongly applying the low tax effect circular issued by the Central Board of Direct Taxes (CBDT). 2. The revenue has filed miscellaneous application as under:- “In the matter of: Miscellaneous Application in the case of M/s. Apoorva Leasing Finance & Investments Company Ltd. 104 Single Storey, Ramesh Nagar, New Delhi 110015. ITA NO.6239/Del/2019 dated 19-09-2019 of 'A' Bench, ITAT, New Delhi. 28707/20 Most respectfully submitted as under: The assessee filed its return of Income of Rs.1,22,762/- on dated 18-09-2012 The assessee was engaged in the business of sale and purchase of shares and securities. Additions made on the following account:- MA No. 87/Del/2020 Apoorva Leasing Finance and Investments Company Ltd Page | 2 1. Disallowance of the expenses of Rs.68,90,132/- u/s. 14A rw.r. 8D. 2. Alleged commission of accommodation entry Rs. 11,76,000/- u/s. 68 of 1.T. Act. 3. Disallowing loss of Rs. 17,80,455/- as result of sham transaction. 4. Disallowed Bad debts amounting to Rs.4,71,000/- 5. Income from undisclosed sources amounting to Rs.39,78,428/- The Ld. CIT (A)-III allowed the appeal and therefore Revenue went to appeal before hon'ble ITAT on the above all five grounds- Findings & decision of Hon'ble ITAT: The Hon'ble ITAT dismissed the appeal in view of the revised/enhanced minimum threshold limit of tax effect of Rs 50,00,000/- vide recent CBDT Circular no. 17/2019 dated 08-08-2019. It is applicable for appeals not only in future but also for appeals already filed by Revenue in ITAT. (Tax Effect Rs. 46,38,342/-) In this company, the main director was S.K. Jain, who was an infamous entry provider and hence search operation was conducted on him on 14.09.2010. The assessee company was engaged in providing the accommodation entries. The erstwhile assessing officer had giving findings that SK Jain was involved in the organized tax evasion activity and given findings that forfeited amount loss booked and share application money were in the shape of the accommodation entry As the case fall under the exceptions as per the CBDT circular 23/2019 Miscellaneous Application needs to be filed before hon'ble ITAT even the quantum of tax is lower than the threshold limit. It is also clarified that Revenue is at liberty to approach Income Tax Appellate Tribunal U/s 254((2) of Income Tax Act, 1961 seeking recall of this order and for restoration of the appeal on merits and facts of the case and not on monetary limits. As assessee company has concealed income/furnished inaccurate particulars of income and the assessee had also provided accommodation entries in the garb of forfeited advance against immovable property and also in guise of share application money and share premium. Accordingly, the prayer of the Revenue before the Hon'ble ITAT is as under:- The appellant prayed to reconsider the decision on the basis of the case falls in the exception laid down in the said Instruction and recall the order to restore the appeal to be decided on merits.” 3. We have heard the rival submissions and perused the materials available on record. It is a fact that the tax effect involved in the additions contested before us is Rs 46,38,342/- which fact is also mentioned in the approval papers of the competent authority for preferring miscellaneous application. We find from the MA No. 87/Del/2020 Apoorva Leasing Finance and Investments Company Ltd Page | 3 approval papers, the revenue had merely reiterated what is mentioned in the assessment order to bring the present case as part of tax evasion petition. No evidence is brought on record to prove the fact of receipt of any tax evasion petition before us. Further, the ld. PCIT who had approved the filing of miscellaneous application before us had stated that the case falls under the exception provided in Circular No. 23 of 2019 dated 6.9.2019. In this regard, we have gone through the said Circular No.23 of 2019 and the same was issued in the context of additions made on account of denial of exemption for long term capital gains on sale of shares in respect of penny stocks u/s 10(38) of the Act or denial of deduction of short term capital loss thereon. None of the additions that are in dispute before us pertain to penny stock issue. Hence the Circular relied upon by the ld. PCIT dated 6.9.2019 per se cannot be made applicable to the present miscellaneous application. Hence we have no hesitation to hold that the miscellaneous application preferred by the revenue is devoid of merits and the tribunal had rightly dismissed the appeal of the revenue on the ground of low tax effect. 4. In the result, the miscellaneous application of the revenue is dismissed. Order pronounced in the open court on 10/10/2023. -Sd/- -Sd/- (C. N. Prasad) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 10/10/2023 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi