DEPUTY COMMISSIONER OF INCOME-TAX vs. SHRI DHONDIRAM NARAYAN LIMBHORE, RAIGAD

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ITA 1957/PUN/2016Status: DisposedITAT Pune03 August 2018AY 2011-125 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 Revenue's appeals were not maintainable due to low tax effect, as per CBDT Circular No. 3/2018. Consequently, the assessee's cross objections were dismissed as infructuous.

What were the facts?

The Revenue filed appeals against the CIT(A)'s order which restricted disallowances on bogus purchases. The assessee engaged in engineering and labour contracting made purchases from suppliers on a suspected list.

What were the issues?

Whether the Revenue's appeals are maintainable before the Tribunal given the low tax effect, and the consequential impact on the assessee's cross objections.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned, but related to disallowance of purchases and appeal maintainability criteria.

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “B” BENCH, PUNE

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

For Respondent: Shri Subodh Ratnaparkhi
Hearing: 30.07.2018Pronounced: 03.08.2018

आदेश / ORDER

2 ITA Nos.1956 & 1957/PUN/2016 & Co Nos. 43 and 44/PUN/2018 Shri Dhondiram Narayan Limbhore

PER D. KARUNAKARA RAO, AM

There are total four appeals under consideration filed by the Assessee

and the Revenue involving A.Yrs. 2010-10 and 2011-12. ITA Nos. 1956 &

1957/PUN/2016 are filed by the Revenue and CO Nos. 43 & 44/PUN/2018

are filed by the Assessee. They are filed against the consolidated order of

CIT(A)-2, Thane. Therefore, these appeals/cross objections are clubbed

together and being adjudicated in this composite order.

2.

We shall first take up the appeals of the Revenue. Revenue raised

similar grounds in both the assessment years and therefore, the grounds of

appeal in ITA No.1956/PUN/2016 for A.Y. 2010-11 are extracted here as

under :

“1. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in relying on the decision of Supreme Court in the case of Kanchwala Gems Vs. JCIT 288 ITR 10 (SC) and Hon’ble High Court’s decision in the case of Vijay Protein, Sanjay Oil Cake Industries, etc. 2. On the facts and in the circumstances of the case, and in law, the Hon’ble CIT(A) erred in not following the order of ITAT, Pune in ITA No.1411- 1415 dated 20-02-2015 in the case of M/s. Kolte Patil Developers Ltd., wherein 100% addition of bogus purchases were confirmed. 3. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in giving relief to the assessee to the extent of suppressed G.P. out of total bogus purchases even though – (i) The assessee could not produce primary evidences like Octrol Receipts, Delivery Challan etc. evidence to prove the genuineness of the purchases before the AO and before CIT(A). (ii) The affidavits filed by the entry providers before Sales Tax Authorities cannot be ignored having evidentiary value. 4. The order of the CIT(A) may be vacated and that of the Assessing Officer may be restored. 5. The appellant craves leave to add, amend, alter or delete any ground of appeal.”

3 ITA Nos.1956 & 1957/PUN/2016 & Co Nos. 43 and 44/PUN/2018 Shri Dhondiram Narayan Limbhore

3.

Briefly stated relevant facts of the case include that the assessee is an

individual and is engaged in the business of Engineering and Labour

Contractor. Assessee filed the return of income on 07-10-2010 declaring

total income of Rs.47,72,670/- This is a case where assessee made certain

purchases and the suppliers from whom the purchases are made are in the

suspected list of the Sales Tax Department of Maharashtra Govt. AO alleged

that the purchases made from 4 suppliers (Para No.4.3 of the assessment

order) amounting to Rs.38,36,129/- are bogus ones. Eventually, the AO

disallowed the said sum of Rs.38,36,129/-. Similarly, the AO made addition

of Rs.48,91,615/- for the A.Y. 2011-12. CIT(A) restricted the disallowance to

Rs.9,59,032/- and Rs.12,22,905/- for the A.Yrs. 2010-11 and 2011-12

respectively.

4.

Before us, at the outset, Ld. AR for the assessee brought our attention

to the computation sheet prepared by him showing that the tax effect in both

the appeals filed by the Revenue is below Rs.20 lakhs. The said chart is

reproduced here below :

Particulars A.Y. 2010-11 2011-12 Total disputed purchases Rs.38,36,129/- Rs.48,91,615/- Addition confirmed by Rs.9,59,032/- Rs.12,22,905/- Hon.CIT(A) Relief granted by Rs.28,77,097/- Rs.36,68,710/- Hon.CIT(A) % of disputed purchases 25% 25% confirmed by Hon.CIT(A)

He submitted that the appeals filed by the Department are 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

4 ITA Nos.1956 & 1957/PUN/2016 & Co Nos. 43 and 44/PUN/2018 Shri Dhondiram Narayan Limbhore

appeal by the Department before the Tribunal is Rs.20 Lakhs, therefore, the

appeals filed by the Department are not maintainable.

5.

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

assessment orders and prayed for reversing the findings of the CIT(A) in the

appeals. However, the Ld. DR fairly admitted that the tax effect in the

present appeals filed by the Department is less than Rs.20 Lakhs.

6.

Both sides heard. On perusal of the facts in both the appeals filed by

the Department and the chart (supra) depicting the tax effect, we find

undisputedly the total tax effect involved in the present appeals is below

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 appeals of the Revenue are liable to be

dismissed on account of low tax effect without going into the merits of the

case.

7.

In the result, both the appeals of the Revenue are dismissed.

We shall now take up the cross objections filed by the assessee.

CO Nos. 43 and 44/PUN/2018 A.Yrs. 2010-11 and 2011-12

8.

Since both the appeals of the Revenue are dismissed as not-

maintainable on account of low tax effect, the cross objections filed by the

assessee becomes infructuous. As such, the cross objections of the

5 ITA Nos.1956 & 1957/PUN/2016 & Co Nos. 43 and 44/PUN/2018 Shri Dhondiram Narayan Limbhore

assessee for both the assessment years are dismissed as academic or infructuous.

9.

In the result, both the cross objections of the assessee are dismissed.

10.

To sum up, the appeals of the Revenue and cross objections of the assessee for both the assessment years are dismissed.

Order pronounced on 03rd day of August, 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 : 03rd August, 2018. Satish

आदेश की 'ितिलिप अ)ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��थ� / The Respondent. 2. 3. The CIT(Appeals)-2, Thane 4. The Pr.CIT-2, Thane ि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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