ACIT 3(2)(2), MUMBAI vs. OMRICRON STEEL TRADERS P.LTD, MUMBAI

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ITA 1600/MUM/2017Status: DisposedITAT Mumbai22 August 2019AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the revenue's appeal as the tax effect was below the monetary limit specified in CBDT Circular No. 17/2019. The revenue was granted liberty to seek revival if exceptions applied.

What were the facts?

The revenue appealed against the deletion of disallowances made by the Assessing Officer concerning non-genuine business loss, loss on trading of Indonesian Steam Coal, and expenses related to group concern purchases. The CIT(A) had deleted all these disallowances.

What were the issues?

Whether the CIT(A) was justified in deleting disallowances related to alleged non-genuine business losses and expenses on group transactions without proper appreciation of facts.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 254(1)

AI-generated summary — verify with the full judgment below

PER PAWAN SINGH, JUDICIAL MEMBER:

1.

This appeal by revenue is directed against the order of ld. Commissioner of Income Tax (Appeals)-8, [CIT(A)], Mumbai dated 30.11.2016 which in turn arises from the assessment order dated 26.03.2015 passed under section 143(3) for Assessment Year 2012-13. The revenue has raised the following grounds of appeal:

1. Whether on the facts and circumstances and in law, the ld. CIT(A) was right in deleting the disallowance of Rs.1,91,564/- on account of non-genuine business loss merely on the premise that the books of account were not rejected and the bills/ vouchers/ challans were not examined without appreciating the fact that the assessee was engaged in trading among its group concerns, and the transactions were affected in books only, without actual delivery of goods.

2. Whether on the facts and circumstances and in law, the Ld. CIT (A) was right in deleting the disallowance of Rs. 50,85,923/ being loss on trading of Indonesian Steam Coal without appreciating the fact that the entire transaction of purchases and sales was made within group concerns effected on High Seas and there was no actual delivery of goods.

3. Whether on the facts and circumstances and in law, the Ld. CIT (A) was right in deleting the disallowance of Rs.13,89,027/- being loss on account of expenses incurred in connection with the purchases made from group concern, 'Topworth Group' against Letter of Credit without appreciating the fact that the purchases made from the group concern were on credit and hence there is no justification to obtain the Letter of Credit for purchases under consideration.

4. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored.

2.

Brief facts of the case are that the assessee-company is engaged in the business of trading in Ferro-Alloys and steel products, filed is return of income for Assessment Year 2012-13 on 29.09.2012 declaring total income of Rs. 3.22 crore (approx). The return of income was selected for scrutiny and assessment was completed under section 143(3) on 26.03.2015. The Assessing Officer while passing the assessment order made the addition/disallowance of Rs. 1,91,564/- on account of loss in trading, disallowance on loss on trading of Indonesian Steam Coal and disallowance of expenses/finance charges of Rs. 13,89,027/-. On appeal before the ld. CIT(A), all the disallowances/addition were deleted. Aggrieved by the order of ld. CIT(A), the revenue has filed the present appeal before us.

3.

None appeared on behalf of assessee despite the service of notice of hearing for more than two occasions by way of registered post with acknowledge (RPAD.) Perusal of grounds of appeal

reveals that revenue has challenged the deletion of disallowance of Rs. 1,91,54,564/- on account of non-genuine business loss, disallowance of loss on account of trading with Indonesian 2 Steam Coal of Rs. 50,85,293/- and disallowance of expenses/finance charges of Rs. 13,89,027/-. Admittedly, the tax effect involved in the present appeal is less than Rs. 50,00,000/-. Therefore, the present appeal is squarely covered by the Central Board of Direct taxes (CBDT) Circular No. 17/2019 dated 8th August 2019.

4. Keeping in view the CBDT Circular No. 17/2019 dated 8th August 2019, wherein the revenue is precluded from filing appeal before the Tribunal.

Accordingly, the appeal of the assessee is dismissed. However, the revenue is given liberty to get the appeal revived in case, if at any later stage, it is found that the present appeal is covered by any exception clause of CBDT Circular No.3/2018 dated 11th July 2018. 5. In the result, appeal of the revenue is dismissed.

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