ITO 6(1)(2), MUMBAI vs. M/S AMPEX COMMUNICATION PVT LTD., MUMBAI

This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals) -12, Mumbai [in short ‘the CIT(A)’] dated 26/11/2019 for the assessment year 2013-14.

Ms. Vinita Shah appearing on behalf of the assessee submitted at the outset that this appeal by the Revenue is liable to be dismissed on account of low tax effect. The ld. Authorized Representative for the assessee pointed that as per Form -36 the total tax effect involved in this appeal is Rs.3,30,000/- i.e. much below the monetary limit specified by the CBDT for filing of appeals by the Department before the Tribunal.

Per contra, Ms.Smita Verma representing the Department submitted that though tax effect involved in the appeal is less than the monitory limit specified in the CBDT Circular, however, this appeal is covered by exception provided in Para – 10(e) of the CBDT Circular No.3/2018 dated 11/07/2018 and subsequent amendment vide Circular dated 20/08/2018. The ld. Departmental Representative pointed that addition in the hands of assessee were made on the basis of information received from DDIT(Inv.), Mumbai that the assessee has obtained accommodation entries from bogus entry provider.

Both sides heard and orders of authorities below examined. The assessment in the case of assessee was reopened on the basis of information received from Investigation Wing of the Income Tax Department. The Tribunal in the case of ITO vs. Amarchand P. Shah, 73 ITR (Tribunal) 588 (Mumbai) has held that information from DDIT(Inv.) of the Income Tax Department is not an ‘external source’ as envisaged in CBDT Circular (supra). It is an internal wing of the Income Tax Department. Therefore, any addition on the basis of information received from the Investigation Wing of the Department would not be covered by exception provided in Para -10(e) of the CBDT Circular (supra). Since, the appeal by Revenue is not covered by exception as pleaded by ld. Departmental Representative and the tax effect involved in the present appeal is less than the monetary limit specified by the CBDT Circular No.17/2019 dated 08/08/2019, this appeal by the Revenue is liable to be dismissed on account of low tax effect. We hold and direct accordingly.

In the result, appeal by the Revenue is dismissed.