INCOME TAX OFFICER, WARD-1, MEHSANA, MEHSANA vs. HEMANTKUMAR FALJIBHAI CHAUDHARY, MEHSANA

The Revenue has raised the following grounds in this appeal: “(a) The Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.64,50,000/- made by AO on account of accommodation entries received from Shri Satyajitsinh Rajendrasinh Gohil, Prop. Of Shoryaraj Enterprise, without appreciating that Shri Satyajit R. Gohil has admitted in its statement recorded on ITO vs. Hemantkumar Faljibhai Chaudhary Asst. Year : 2012-13 2 oath that he is engaged in providing accommodation entry and did no business other than book transactions.

Before going to the merit of the case, the Authorized Representative (AR) for the assessee, at the outset, submitted that tax effect on the disputed total additions is below Rs.60 lakhs, therefore, by virtue of recent CBDT Circular No. 9 of 2024 dated 17.9.2024, Department has been instructed not to file appeal before the Tribunal, where tax effect is below Rs.60 lakhs. This instruction is applicable to the pending cases also. Therefore, the present appeal of the Revenue is liable to be dismissed at the threshold. Per contra, the Departmental Representative (DR) did not dispute applicability of the recent CBDT circular and also tax effect being below Rs.60 lakhs in the assessee case. She, however, left the issue to the Tribunal to pass appropriate order in the matter.

After hearing both the sides and after perusal of the above CBDT Instruction, we are of the view that the present appeal of the Revenue falls within the purview of the CBDT Instruction cited (supra). It is not disputed by the Revenue that tax effect on the disputed addition is less than Rs.60 lakhs, and therefore, keeping in view the above CBDT circular and provisions of section 268A of the Income Tax Act, we are of the view that the present appeal of the Revenue deserves to be dismissed. It is accordingly dismissed. However, it is noted that in case on re-verification at the end of the AO, if it can be demonstrated that the tax effect is more, or Revenue’s case falls within the ambit of exceptions provided in the Circular, then the Department will be ITO vs. Hemantkumar Faljibhai Chaudhary Asst. Year : 2012-13 at liberty to approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed in the Act. In view of the above, the appeal of the Revenue is dismissed due to low tax effect.

In the result, appeal of the Revenue is dismissed due to low tax effect.