ACIT 3 (1)(1), MUMBAI vs. M/S AMFORGE INDUSTRIAL LTD., MUMBAI

This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals) -8, Mumbai [in short ‘the CIT(A)’] dated 12/09/2019 for the assessment year 2009-10.

The solitary issue raised in appeal by the Revenue is against deleting addition of Rs.12,53,610/- on account of loss claimed by the assessee through alleged misuse of client code modification.

At the outset it is observed that the tax effect involved in the appeal as per Form 36 is Rs.3,87,367/-. The monetary limit for filing of the appeal by the Revenue before the Tribunal is Rs.50.00 lakhs as per CBDT Circular No.17/2019 dated 08/08/2019. A perusal of the assessment order passed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 ( in short 'the Act') shows that the case of the assessee for assessment year 2009-10 was reopened on the basis of information received from Director of Income Tax (Intelligence and Criminal Investigation), Mumbai [ in short ‘DIT(I&CI)’]. The Division Bench of the Tribunal in the case of ITO vs. Amarchand P. Shah reported as 73 ITR (Tribunal) 588 (Mum) has held that DIT(Investigation) is an internal agency/ Wing of the Department, which work under the aegis of its controlling authority the CBDT, hence, cannot be considered as an ‘external source’ as referred to in Para 10(e) of the CBDT communication dated 20/08/2018. Therefore, information received by the Assessing Officer from DIT(I&CI) is not covered by exceptions as contained in Para 10(e) of the CBDT Circular No.3 of 2018 dated 11/07/2018 and subsequently amended by communication dated 20/08/2018.

In the result, appeal by the Revenue is dismissed in the aforesaid terms.