ACIT CIR 20(1), MUMBAI vs. SHAILESH NAVINCHANDRA SHAH, MUMBAI

ITA 2383/MUM/2021Status: DisposedITAT Mumbai29 August 2022AY 2011-124 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the revenue's appeal as not maintainable due to the low tax effect, as per the CBDT circular. The Tribunal also noted that the information was not from an external source as claimed by the revenue, and the CIT(A) had followed relevant High Court decisions.

What were the facts?

The revenue appealed against the CIT(A)'s order restricting the addition on account of bogus purchases to 25%. The tax effect was below Rs. 50 lacs, which is the revised monetary limit for filing appeals before the ITAT. The revenue argued that the case fell under an exception to the circular regarding monetary limits.

What were the issues?

Whether the appeal filed by the revenue is maintainable given the tax effect and the applicability of CBDT circulars. Whether the addition on account of bogus purchases was correctly restricted by the CIT(A).

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI AMIT SHUKLA, JM

For Appellant: Ms. Neeta Jeph, Ld. DR, Shri Viraj Mehta,Ld. AR

For Respondent: Shri Viraj Mehta,Ld. AR

O R D E R

Per Amit Shukla, Judicial Member:

The aforesaid appeal has been filed by the revenue against the impugned order dated 29.10.2021, passed by National Faceless Appeal Centre, Delhi for the quantum of assessment passed u/s 143(3) for AY 2011-12. The revenue has raised the following grounds:-

Shailesh Navinchandra Shah 1. "Whether on the facts and in the circumstances and in law, the Ld. CIT(A) erred in restricting the addition on account of bogus purchases to 25% of total bogus purchase ignoring the fact that the Sales Tax Department has proved beyond doubt that the parties declared as hawala traders were involved in providing accommodation entry of purchases and the assessee was one of the beneficiary of accepting accommodation for the purchase." 2. "Whether on the facts and in the circumstances and in law, the Ld. CIT(A) erred in not appreciating the fact that the assessee failed to produce the parties for verification, in spite of opportunity provided by the AO." 3. "This case is filed because it is covered under the exception provided in para 10(e) of the CBDT's Circular no.3 of 2018 dated 11.07.2018 as amended vide F.No.279/Misc. 142/2007-ITJ(Pt) dated20.08.2018."

The appellant prays that the order of Ld. CIT(A), NFAC on the above ground be reversed and j that of the Assessing Officer be restored.

5. The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary.

At the outset, the tax effect on the disputed issue is below Rs. 50 lacs and as per Circular No.17 of 2019 dated 08.08.2019 [F.No.279/Misc.142/2007-TTJ(Pt.) issued by the Central Board of Shailesh Navinchandra Shah Direct Taxes (CBDT), Department of Revenue, Ministry of Finance, Government of India, the CBDT has revised the monetary limit for filing appeals before the ITAT from the existing limit of Rs. 20 lacs to Rs. 50 lacs.

However, Ld. Departmental Representative (DR) contented that it falls within the exception provided in para 10(e) of the CBDT circular no. 3 of 2018 dated 11.07.2018, which reads as under:-

(e) Where addition is based on information received from external sources in the nature of law enforcement agencies as CBI /ED /DRI /SFIO /Directorate General of GST Intelligence (DGGI). 4. From the perusal of the assessment order, it is seen that the information is not based on any external source but from DGIT Investigation, Mumbai, therefore it does not falls within the aforesaid exception. Thus the said Clause will have no impact on this issue.

In any case, Ld. CIT(A) while applying GP rate on bogus purchase had followed various ITAT decision which now is full covered by the decision of Hon’ble Bombay High Court in the case of PCIT vs. Md. Haji Adam & Co. (ITA No. 1044/2016) order

Shailesh Navinchandra Shah dated 11th February 2019, wherein it has been held that application of GP rate at 12.5%.

Accordingly, we dismiss the appeal of the revenue in limini as not maintainable on account of law tax effect in term of aforesaid CBDT circular (supra).

In the result, the appeal filed by the revenue stands dismissed in limini. Orders pronounced in the open court on 29th August, 2022. Sd/- (Amit Shukla) Judicial Member मुंबई Mumbai;ददनांक Dated : 29.08.2022 Sr.PS. Dhananjay आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned 5. दवभागीयप्रदतदनदध, आयकरअपीलीयअदधकरण, मुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File आदेशधिुसधर/ BY ORDER,

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