ITO - 27 (1)(4), MUMBAI vs. ELITE ELECTRICALS, MUMBAI

The Revenue in its appeal has raised the following grounds: - "1) On the facts and circumstances of the case and in law, the Ld. CIT(A) was correct in deleting the Penalty levied of Rs. 69,104/- u/s.271(1)(c) of the IT Act as the penalty was levied on quantum additions made on account of bogus purchases, without appreciating that the onus was on the assessee to establish the genuineness of such purchases by (A.Y: 2010-11) M/s. Elite Electricals producing such parties before the Assessing officer and the assessee failed to discharge its onus? 2) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was correct in holding that the AO had made adhoc additions without appreciating that the AO had levied penalty, only after verifying the fact that the assessee evaded the taxes on quantum of additions made on account of bogus purchases and the assessee failed to establish the genuineness of such purchases? 3) The appellant prays that the order of the CIT(A) on the above grounds be reversed and that of the Assessing Officer be restored. 4) The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary.”

We have heard the submissions and perused the grounds of appeal in this appeal. We find that the tax effect in this appeal is less than ₹.50 Lakhs and therefore the appeal of the revenue is not maintainable on account of low tax effect in view of the CBDT Circular No. 17/2019 dated 08.08.2019. We also observed that since the issue is in respect of (A.Y: 2010-11) M/s. Elite Electricals levy of penalty u/s. 271(1)(c) of the Act none of the exception in the circular are applicable. Hence this appeal is dismissed.

In the result, appeal of the revenue is dismissed.