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Facts
The Revenue department challenged an order by the CIT(A) which partly allowed the assessee's appeal against an assessment order. The assessment order, passed under Section 143(3) read with Section 153C, had added certain amounts as unexplained cash credit and expenditure, taxable under Section 115BBE.
Held
The Tribunal noted that the Revenue department had initiated fresh proceedings under Section 148 of the Act. Considering this, the Tribunal found that the present appeal regarding the assessment under Section 143(3) r.w.s. 153C had become infructuous.
Key Issues
Whether the appeal filed by the department has become infructuous due to the initiation of fresh assessment proceedings under Section 148 of the Act, thereby making the current appeal redundant.
Sections Cited
143(3), 153C, 115BBE, 68, 69C, 271AAC(1), 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”A-Bench” JAIPUR
Before: SHRI GAGAN GOYAL, AM & SHRI NARINDER KUMAR, JM
vkns'k@ORDER Per: NARINDER KUMAR, JUDICIAL MEMBER .
Revenue-department has challenged order dated 27.12.2024 passed by Learned CIT(A), whereby the appeal filed by the assessee challenging assessment order dated 28.12.2019 passed u/s 143(3) r.w.s. 153C of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), relating to the M/s F S Housing Pvt. Ltd., Jaipur. assessment year 2018-19, has been partly allowed, for the reasons recorded therein. By way of the above said assessment order dated 28.12.2019, total income of the assessee was computed as under:-
Loss declared in return of income 15,93,073 Add: as per para 6, supra (taxable at the rate of 60% as 4,40,240 provision u/s 115BBE) Add: as above para 7, supra (taxable at the rate of 60% as 1100 provision u/s 115BBE) Add: as per para 8, supra (taxable at the rate of 60% as 4,49,484 provision u/s 115BBE) Total income (loss cannot be setoff against the income 890824 determined u/s 68 & 69C as per provision of 115BBE and loss so claimed in return is allowed to carried forward)
The assessment proceedings were initiated after search and seizure action u/s 132 of the Act, and/ or survey action u/s 133A of the Act , carried out by the Income tax Department on the members of Kiran Fine Jewellers Group on 02.08.2017. As claimed by the department, the assessee is one of the members of the said group.
On completion of the assessment proceedings, the Assessing Officer arrived at the following conclusion:- “In view of the above discussion and fact brought on record with the evidence it is evident that that M/s Gemini Commerce Pvt. Ltd. is a bogus/shell Company, and M/s F S Housing Pvt. Ltd., Jaipur. not involved any business activity. The assessee company has made sham transaction of Rs. 440240/- with a shell company M/s Gemini Commerce Pvt. Ltd. under grab of unsecured loan to introduced his unaccounted income which is held unexplained cash credit u/s 68 of the I.T. Act and added back to the total income of the assessee and taxable at the rate of 60% as provision u/s 115BBE Penalty proceedings u/s 271AAC(1) of the Act is initiated separately for as income determined includes income referred to section 68 of the Act. Addition of Rs. 440240/- 7. The fact is also unearthed during the course of investigation that the beneficiaries have also paid commission @ 0.25% on acquiring accommodation entries. Therefore, it is justifiable that commission paid @0.25% which computes at Rs. 1100/- are treated as unexplained expenditure for acquiring accommodation entry which is added to the total income u/s 69C of the I.T. Act in the hands of assessee for the year under consideration and taxable at the rate of 60% as provision u/s 115BBE. Penalty proceedings u/s 271AAC(1) of the Act is initiated separately for as income determined includes income referred to section 69C of the Act. Addition of Rs. 1100/- 8. Further, the assesee has shown interest expenditure of Rs. 449484/- on account of the unsecured loan purported to be received from M/s Gemmi Commerce Pvt. Ltd. which has been establish as shell company and the interest expenditure is a sham transaction which is held as unexplained expenditure u/s 69C of the I.T. Act and added back to the total income of the assessee and taxable at the rate of 60% as provision u/s 115BBE Penalty proceedings u/s 271AAC(1) of the Act is initiated separately for as income determined includes income referred to section 69C of the Act. Addition of Rs. 449484/-“
Argument heard. File perused.
M/s F S Housing Pvt. Ltd., Jaipur.
Ld. AR for the appellant has submitted that present appeal filed by the department deserves to be dismissed as disputed tax effect comes to Rs. 6,88,159/-, which is below the prescribed mandatory threshold. In this regard, Ld. AR for the appellant has relied on circular No. 9/2024, dated 17.09.2024, whereby mandatory limits for filing appeals by the department has been enhanced to Rs. 60 lakhs. In other words, as per submission of Ld. AR for the appellant the tax effect being less than Rs. 60 lakhs, this appeal deserved to be dismissed, being not maintainable.
On the other hand, Ld. DR for the department has submitted that present appeal is covered by one of the exceptions, one of the additions having been made due to the reasons that the assessee company made sham transactions with M/s Gemini Commerce Pvt. Ltd., a wholly bogus company, under the garb of unsecured loan, with intent to introduce its unaccounted income, which remained explained and attracted provisions of Section 68 of the Act.
However, Ld. AR for the department has candidly submitted that as per instruction from the department, the department has already initiated proceedings against the assessee u/s 148 of the Act.