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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
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.
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
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.”
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.
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).
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
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.
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.
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.