INCOME TAX OFFICER 13(2)(1), MUMBAI vs. MEERA MILIND NARVEKAR, MUMBAI
In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal dismissed the revenue's appeal, primarily holding that it was not maintainable as the tax effect was below Rs. 60 lakhs, as stipulated by CBDT Circular No. 09/2024 dated 17.09.2024, which is applicable to pending cases. The Tribunal also noted that, on merits, the CIT(A) had correctly deleted the addition, finding that the assessee's transactions involving an interest-free loan and investment in shares were genuine and tax had been paid on the STCG.
What were the facts?
The revenue filed an appeal challenging the CIT(A)'s order for AY 2013-14, which had deleted an addition made by the AO by treating Short Term Capital Gains (STCG) as income from other sources. The Ld. AR for the assessee contended that the revenue's appeal was not maintainable as the tax effect was below the threshold limit of Rs. 60 lakhs.
What were the issues?
Whether the revenue's appeal is maintainable given a tax effect below the threshold limit prescribed by the CBDT Circular, and whether the CIT(A) was correct in deleting the addition by treating STCG as income from other sources.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI OMKARESHWAR CHIDARA
Date of Hearing 24.11.2025 Date of Pronouncement 02.12.2025 ORDER Per: SHRI. SANDEEP GOSAIN, J.M.:
The present appeal has been filed by the revenue challenging the impugned order dt. 31.07.2025 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2013-14.
At the very outset, Ld. AR pointed out that the appeal filed by the revenue is not maintainable as the tax effect is below the threshold limit of 60 lakhs.
On the other hand Ld.DR could not point out as to how the present appeal is maintainable
It was brought to the notice of the bench, that the tax effect in this appeal is below Rs.60 lakhs and is covered by the CBDT Circular No. 09/2024 dated 17.09.2024. The Ld.DR on the other hand has not accepted the low tax effect aspects and applicability of CBDT circular.
We find that as per the CBDT Circular dated 17.09.2024, no appeal shall be filed by the revenue before the Hon’ble Tribunal where the tax effect is below Rs 60 lakhs. Further the circular of the CBDT is also applicable to the pending cases. Accordingly, we dismiss the revenue appeal on maintainability and low tax effect.
In case, if the revenue is able to provide evidence that the case falls under any of the exceptions provided in the circular issued by the CBDT. The revenue may prefer miscellaneous application for recalling of this order, if they so desire, in which circumstances, this order shall be recalled by the Hon’ble Tribunal.
Even otherwise on merits also we have noticed that the additions in the above case were made by the AO by treating short term capital gains (STCG) declared by hte assessee as income from other sources, however Ld. CIT(A) deleted the same. The operative portion of the order of Ld. CIT(A) is reproduced herein below:
Conclusion From factual findings of financial transactions as stated by AO in assessment order, undersigned concurs with observation of AO that assessee has received interest free loan from subsidiary of NFPIL through layer. The money so received has been invested by assessee into scrip of NFIPL. On such investment, assessee has earned money which has been declared under head STCG.
However, there is nothing on record suggesting that scrip of NFIPL was rigged: unaccounted cash of assessee was involved: scrip of NFPIL was a penny stock etc. AO's conclusion that whole transaction in hands of assessee was not genuine appears to be without any factual backing. (Assessee has taken loan and made investment; assessee has chosen to bear the Fisk/reward associated with such an investment made out of money taken on loan. Transactions have been carried out electronically After making profit, assessee has repaid the loan Assessee has paid @15% on such STCG. From angle of Income Tax proceedpaid nothing illegal is found in such transactions of loan taken from subsidiary of NFIPL through payer and investing the same in shares of NFIPL.
7 Considering above observations of undersigned and case laws cited by assessee, electronic transactions entered into by assessee appears to be within permissible legal limits as per provisions of Income Tax Act, 1961. Hence action of AO to treat STCG of Rs. 90,42,402/- as income from undisclosed sources to be taxed under the head income from other sources is found unjustified. In result, appeal of assessee is allowed.
After having heard the parties at length, we found that assessee had received interest free loan from subsidiary of M/s NFPIL and the money so received was invested into scrip of M/s NFPIL and consequently earned income which has already been declared by the assessee under the head “short term capital gain” and due tax have already been paid on it.
Nothing came on record that scrip M/s NFPIL was rigged, or was a penny stock etc. Assessee had only taken loan and made investment, the entire transaction was carried electronically. The said loan has been repaid and assessee has also paid taxes on it, even nothing illegal was found in such transaction of loan.
Meera Milind Narvekar., Mumbai. 10. Even otherwise no new facts or circumstances have been brought on record before us in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, we see no reasons to interfere into or to deviate from the lawful findings so recorded by Ld. CIT(A). Hence, the ground raised and by the revenue stands dismissed.
In the result, the appeal filed by the revenue stands dismissed.
Order pronounced in the open court on 02/12/2025.
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