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Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
This appeal by the Revenue is directed against order dated 27/08/2019 passed by the learned Commissioner of income- tax(Appeals)-12, Mumbai [in short, “the ld. CIT(A)”] for assessment year 2009-10, arising from the order passed by the Assessing Officer u/s. 143(3) r.w.s. 147 of the Act on 05/12/2016. The grounds raised by the revenue are reproduced as under:
India Steel Works Ltd. 2 ITA No. 7057/M/2019
"On the facts and circumstances of the case and in law, "On the facts and circumstances of the case and in law, "On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition of Rs. the Ld.CIT(A) erred in deleting the addition of Rs. the Ld.CIT(A) erred in deleting the addition of Rs. 50,00,000/ 50,00,000/-made us 68 of the Act. 1961 treating the made us 68 of the Act. 1961 treating the unsecured loan as unexplained cash credits." unsecured loan as unexplained cash credits." unsecured loan as unexplained cash credits." 2. "On the facts and circumstances of the "On the facts and circumstances of the case and in law, case and in law, the Ld.CIT(A) erred in deleting the addition of Rs. the Ld.CIT(A) erred in deleting the addition of Rs. the Ld.CIT(A) erred in deleting the addition of Rs. 50,00,000/ 50,00,000/- made by A.0. on a/c of bogus unsecured made by A.0. on a/c of bogus unsecured loan from two parties by not appreciating that the loan from two parties by not appreciating that the loan from two parties by not appreciating that the assessee has not able to prove the identity, genuineness assessee has not able to prove the identity, genuineness assessee has not able to prove the identity, genuineness and creditworthiness of the and creditworthiness of the persons from whom loan was persons from whom loan was received as it failed to produce the parties for cross received as it failed to produce the parties for cross received as it failed to produce the parties for cross examination" examination" 3. "Though the tax effect in this case is Rs. 15,45,000/, "Though the tax effect in this case is Rs. 15,45,000/, "Though the tax effect in this case is Rs. 15,45,000/, however this appeal has been filed because it is covered however this appeal has been filed because it is covered however this appeal has been filed because it is covered by exception mentioned in para10(e) of the CBDT C by exception mentioned in para10(e) of the CBDT C by exception mentioned in para10(e) of the CBDT Circular No. 3/2018 dt.11 No. 3/2018 dt.11-7-2018 as subsequently clarified by 2018 as subsequently clarified by Board Board Board letter letter letter dtd. dtd. dtd. 20/08/2018 20/08/2018 20/08/2018 vide vide vide no. no. no. 279/misc/142/2007 279/misc/142/2007-ITJ/Pt.)
2. Firstly, we take the ground no. 3 of the appeal of the revenue Firstly, we take the ground no. 3 of the appeal of the revenue Firstly, we take the ground no. 3 of the appeal of the revenue as the same relates to the admissibility of appeal due to low ta as the same relates to the admissibility of appeal due to low ta as the same relates to the admissibility of appeal due to low tax effect.
3. The ld. Departmental Representative appearing for the revenue The ld. Departmental Representative appearing for the revenue The ld. Departmental Representative appearing for the revenue submitted that although the said appeal is filed by revenue where submitted that although the said appeal is filed by revenue where submitted that although the said appeal is filed by revenue where the tax effect is Rs. 15,45,000/ the tax effect is Rs. 15,45,000/- only, however, this appeal has been only, however, this appeal has been filed considering the exception granted in c filed considering the exception granted in clause (e) of the CBDT lause (e) of the CBDT Circular no. 3/2018 dt. 11/07/2018 as subsequently clarified by Circular no. 3/2018 dt. 11/07/2018 as subsequently clarified by Circular no. 3/2018 dt. 11/07/2018 as subsequently clarified by India Steel Works Ltd. 3 ITA No. 7057/M/2019 the Board vide vide letter letter dt. dt. 20/08/2018 20/08/2018 vide F.No.279/misc/142/2007 F.No.279/misc/142/2007-ITJ(Pt.).
3. In rebuttal, the ld. Counsel of the assessee objected that the In rebuttal, the ld. Counsel of the assessee objected that the In rebuttal, the ld. Counsel of the assessee objected that the appeal filed by the revenue i appeal filed by the revenue is not admissible in light of the fact that s not admissible in light of the fact that the references made by the ld. Departmental Representative does the references made by the ld. Departmental Representative does the references made by the ld. Departmental Representative does not assist the revenue in any manner. not assist the revenue in any manner.
We have heard the rival contentions of the parties and gone We have heard the rival contentions of the parties and gone We have heard the rival contentions of the parties and gone through the relevant CBDT circulars and subsequ through the relevant CBDT circulars and subsequent clarification of ent clarification of the Board on this issue. The relevant extract of the amended CBDT the Board on this issue. The relevant extract of the amended CBDT the Board on this issue. The relevant extract of the amended CBDT Circular no. 3/2018 dt. 20/08/2018 is reproduced below: Circular no. 3/2018 dt. 20/08/2018 is reproduced below: Circular no. 3/2018 dt. 20/08/2018 is reproduced below:
“..Kindly refer to the above. “..Kindly refer to the above.
The monetary limits for filing of appeals by the 2. The monetary limits for filing of appeals by the 2. The monetary limits for filing of appeals by the Department before Income Tax Ap Department before Income Tax Appellate Tribunal, High pellate Tribunal, High Courts and SLPs/appeals before Supreme Court have been Courts and SLPs/appeals before Supreme Court have been Courts and SLPs/appeals before Supreme Court have been revised by Board's Circular No.3 of 2018 dated 11.07.2018. revised by Board's Circular No.3 of 2018 dated 11.07.2018. revised by Board's Circular No.3 of 2018 dated 11.07.2018.
Para 10 of the said Circular provides that adverse 3. Para 10 of the said Circular provides that adverse 3. Para 10 of the said Circular provides that adverse judgments relating to the issues enumerated in the said judgments relating to the issues enumerated in the said judgments relating to the issues enumerated in the said para should be contested on merits notwithstanding that uld be contested on merits notwithstanding that uld be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits the tax effect entailed is less than the monetary limits the tax effect entailed is less than the monetary limits specified in para 3 thereof or there is no tax effect. Para 10 specified in para 3 thereof or there is no tax effect. Para 10 specified in para 3 thereof or there is no tax effect. Para 10 of the Circular No.3 of 2018 dated 11.07.2018 is hereby of the Circular No.3 of 2018 dated 11.07.2018 is hereby of the Circular No.3 of 2018 dated 11.07.2018 is hereby amended as under: a 10. Adverse amended as under: a 10. Adverse judgments relating to the judgments relating to the following following following issues issues issues should should should be be be contested contested contested on on on merits merits merits notwithstanding that the tax effect entailed is less than the notwithstanding that the tax effect entailed is less than the notwithstanding that the tax effect entailed is less than the India Steel Works Ltd. 4 ITA No. 7057/M/2019
monetary limits specified in para 3 above or there is no tax monetary limits specified in para 3 above or there is no tax monetary limits specified in para 3 above or there is no tax effect:
(a) Where the Constitutional validity of the provis (a) Where the Constitutional validity of the provis (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or Act or Rule is under challenge, or (b) Where Board's order, Notification, Instruction or Circular (b) Where Board's order, Notification, Instruction or Circular (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been (c) Where Revenue Audit objection in the case has been (c) Where Revenue Audit objection in the case has been accepted by the Department, or accepted by the Department, or (d) Where addition relates to undisclosed foreign income/ ddition relates to undisclosed foreign income/ ddition relates to undisclosed foreign income/ undisclosed foreign assets (including financial assets)/ undisclosed foreign assets (including financial assets)/ undisclosed foreign assets (including financial assets)/ undisclosed foreign bank account. undisclosed foreign bank account. e) Where addition is based on information received from e) Where addition is based on information received from e) Where addition is based on information received from external sources in the nature of law enforcement agencies external sources in the nature of law enforcement agencies external sources in the nature of law enforcement agencies such as CBI/ ED/ DR/ SFIO/ Directorate General of GST h as CBI/ ED/ DR/ SFIO/ Directorate General of GST h as CBI/ ED/ DR/ SFIO/ Directorate General of GST Intelligence (DGGI). Intelligence (DGGI).
(f) Cases where prosecution has been filed by the (f) Cases where prosecution has been filed by the (f) Cases where prosecution has been filed by the Department and is pending in the Court. Department and is pending in the Court.
……”
4.1 On perusal of the clause (e) of the above CBDT Circular on On perusal of the clause (e) of the above CBDT Circular on On perusal of the clause (e) of the above CBDT Circular on which the ld. Departmental Representative of the revenue has Departmental Representative of the revenue has Departmental Representative of the revenue has placed reliance, it is noted that the same refers to any addition placed reliance, it is noted that the same refers to any addition placed reliance, it is noted that the same refers to any addition being made based on some information received from external being made based on some information received from external being made based on some information received from external sources in the nature of law enforcement agencies such as CBI/ sources in the nature of law enforcement agencies such as CBI/ sources in the nature of law enforcement agencies such as CBI/ED/
India Steel Works Ltd. 5 ITA No. 7057/M/2019 DR/ SFIO/ DR/ SFIO/ Directorate Directo rate General General of GST Intelligence (DGGI). of GST Intelligence (DGGI). Accordingly, what is required to be seen is whether the information Accordingly, what is required to be seen is whether the information Accordingly, what is required to be seen is whether the information based on which the addition is made by the Assessing Officer is based on which the addition is made by the Assessing Officer is based on which the addition is made by the Assessing Officer is received firstly, from external sources and secondly, from any law received firstly, from external sources and secondly, from any law received firstly, from external sources and secondly, from any law enforcement agencies or not. In the present case, the Assessing cies or not. In the present case, the Assessing cies or not. In the present case, the Assessing Officer has reopened the case of the assessee and made the addition Officer has reopened the case of the assessee and made the addition Officer has reopened the case of the assessee and made the addition of unsecured loan u/s. 68 of the Act on the basis of information of unsecured loan u/s. 68 of the Act on the basis of information of unsecured loan u/s. 68 of the Act on the basis of information received from the office of DGIT (Inv.), Mumbai vide letter No. received from the office of DGIT (Inv.), Mumbai vide letter No. received from the office of DGIT (Inv.), Mumbai vide letter No. DDIT(Inv)/Unit-2(1)/GS 2(1)/GS-Inf/2015-16 dtd. 18.03.2016. In light of 16 dtd. 18.03.2016. In light of this information received from the investigation wing of the income this information received from the investigation wing of the income this information received from the investigation wing of the income tax department, it cannot be said that the Assessing Officer has tax department, it cannot be said that the Assessing Officer has tax department, it cannot be said that the Assessing Officer has received any information from external sources and that too from received any information from external sources and that too from received any information from external sources and that too from any law enforcement agencies like CBI/ED/SFIO etc. aw enforcement agencies like CBI/ED/SFIO etc. aw enforcement agencies like CBI/ED/SFIO etc.
4.2 In view of the above discussion, we do not agree with the ld. In view of the above discussion, we do not agree with the ld. In view of the above discussion, we do not agree with the ld. Departmental Representative that the said appeal filed by revenue Departmental Representative that the said appeal filed by revenue Departmental Representative that the said appeal filed by revenue under low tax effect is covered by exception clause (e) referred to in under low tax effect is covered by exception clause (e) referred to in under low tax effect is covered by exception clause (e) referred to in CBDT Circular no. 3/2018 dt. 20/08/2018. Accordingly, we ircular no. 3/2018 dt. 20/08/2018. Accordingly, we ircular no. 3/2018 dt. 20/08/2018. Accordingly, we dismiss this ground no. 3 of the appeal of the dismiss this ground no. 3 of the appeal of the Revenue Revenue.
4.3 Since the appeal itself is not admissible on the ground of low Since the appeal itself is not admissible on the ground of low Since the appeal itself is not admissible on the ground of low tax effect based on the CBDT circular (supra), the other grounds of tax effect based on the CBDT circular (supra), the other grounds of tax effect based on the CBDT circular (supra), the other grounds of appeal raised by the revenue needs no adjudication and hence, by the revenue needs no adjudication and hence, by the revenue needs no adjudication and hence, treated to be infructuous and dismissed. treated to be infructuous and dismissed.
India Steel Works Ltd. 6 ITA No. 7057/M/2019
In the result, the appeal of the In the result, the appeal of the Revenue is dismissed. is dismissed.
Order pronounced under Rule 34(4) of the ITAT Rules, Order pronounced under Rule 34(4) of the ITAT Rules, Order pronounced under Rule 34(4) of the ITAT Rules, 1963 on 30/12/2022. 12/2022.