INCOME-TAX OFFICER vs. M/S. RADHAKRISHNA TRADING CO., JALNA

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ITA 1176/PUN/2016Status: DisposedITAT Pune18 July 2018AY 2011-124 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 held that the appeal filed by the Revenue was not maintainable due to low tax effect, as it was below the monetary limit prescribed by CBDT Circular No. 3/2018. The circular, which raised the limit to Rs. 20 Lakhs, was applicable to pending appeals.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of an addition of Rs. 50 lakhs made under Section 68. The assessee, a trading company, had declared a total income of Rs. 3,62,174/- for the assessment year 2011-12.

What were the issues?

Whether the appeal filed by the Revenue is maintainable before the Tribunal considering the low tax effect in light of CBDT Circular No. 3/2018.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM

For Appellant: Shri Mukesh Jha
For Respondent: Shri Sanket Joshi
Hearing: 18.07.2018Pronounced: 18.07.2018

आदेश / ORDER

PER D. KARUNAKARA RAO, AM

This appeal is filed by the Revenue against the order of CIT(A)-2, Nashik, dated 02.03.2016 for the A.Y. 2011-12.

2.

Grounds raised by the Revenue are extracted below :

“(1) Whether on the facts and circumstances of the case, the Ld.CIT(A)-2, Nashik was justified in deleting the addition of Rs.50,00,000/- on account of unexplained cash credit u/s.68 of the Income Tax Act, 1961 despite the fact that AO had clearly established that the assessee failed to furnish satisfactory explanation regarding cash credits to bank accounts inter-alia to the capitals of partners.

2 ITA No.1176/PUN/2016 M/s. Radhakrishna Trading Company

2.

The appellant prays the order of the AO may be restored. 3. The appellant prays to adduce such further evidence to substantiate his case. 4. The appellant prays leave to add, clarify, amend and or withdraw any grounds of appeal as and when the occasion demands.”

3.

Briefly stated relevant facts includes that the assessee is a company

engaged in the business of trading in cotton, cotton seeds and cotton bales.

Assessee filed the return of income on 26-09-2011 declaring total income of

Rs. 3,62,174/-. In the assessment proceedings, the AO made addition of

Rs.50 lakhs as unexplained cash credit u/s.68 of the Act to the total income

of the assessee. AO also made couple of additions, i.e. (1) addition of

Rs.18,740/- on account of interest on advancing of interest free loans and (2)

addition of Rs.21,112/- on account of expenses.

4.

Aggrieved with the assessment order dated 24.03.2014, the assessee

filed an appeal before the CIT(A). The CIT(A) granted relief to the assessee on

account of cash credit of Rs.50 lakhs and confirmed the addition of

Rs.21,112/- on account of expenses. Now, the Revenue is in appeal against

the order of CIT(A).

5.

At the outset, Ld. AR for the assessee submitted that the appeal filed

by the Department is liable to be dismissed on account of low tax effect. The

Ld. AR pointed that as per CBDT Circular No.3/2018 dated 11th July, 2018,

the monetary limit for filing of appeal by the Department before the Tribunal

is Rs.20 Lakhs, therefore, the appeal filed by the Department is not

maintainable.

3 ITA No.1176/PUN/2016 M/s. Radhakrishna Trading Company

6.

On the other hand, the Ld. DR for the Revenue defended the

assessment order and prayed for reversing the findings of the CIT(A) on the

solitary issue raised by the Revenue. However, the Ld. DR fairly admitted

that the tax effect in the present appeal is less than Rs.20 Lakhs.

7.

Both sides heard. A perusal of the impugned order shows that the

addition made in the assessment year under consideration is on account of

unexplained cash credit u/s.68 of the I.T. Act. Undisputedly, the tax effect

on the addition of Rs.50 lakhs in the present appeal is less than Rs. 20

Lakhs. The CBDT circular No.3/2018 dated 11th July, 2018 raised the

monetary limit of tax effect for filing of appeal by the Department before the

Tribunal to Rs.20 Lakhs. The circular applies to the pending appeals of the

Department before the Tribunal too. Thus, in view of the CBDT circular, we

are of the opinion that the present appeal of the Revenue is liable to be

dismissed on account of low tax effect.

8.

In the result, the appeal of the Revenue is dismissed.

Order pronounced on 18th day of July, 2018.

Sd/- Sd/- (िवकास अव थी /Vikas Awasthy) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �ाियक सद�/JUDICIAL MEMBER लेखा सद�/ACCOUNTANT MEMBER

पुणे / Pune; िदनांक / Dated : 18th July, 2018. Satish

4 ITA No.1176/PUN/2016 M/s. Radhakrishna Trading Company

आदेश की 'ितिलिप अ)ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��थ� / The Respondent. 2. 3. The CIT(Appeals)-2, Aurangabad. 4. The Pr. CIT-2, Aurangabad. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “बी” ब"च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड% फ़ाइल / Guard File. 6.

आदेशानुसार / BY ORDER,

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.

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