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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
This appeal by the Revenue is directed against order dated 14.07.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2014-15, raising following grounds:
1."Whether on the facts and in the circumstances of the case and in law, the Ld.CIT (A) erred in deleting the addition made by the AO ignoring the fact that ITAT has deleted the addition to the extent of 95% of the fact that ITAT has deleted the addition to the extent of 95% of the fact that ITAT has deleted the addition to the extent of 95% of the addition made by the AO.
Whether on th addition made by the AO.
2. Whether on the facts and in the e facts and in the circumstances of the case and in law, the Ld CIT(A) was justified in circumstances of the case and in law, the Ld CIT(A) was justified in circumstances of the case and in law, the Ld CIT(A) was justified in deleting the addition made by the AO ignoring the fact that ITAT has deleting the addition made by the AO ignoring the fact that ITAT has deleting the addition made by the AO ignoring the fact that ITAT has deleted 95% of the purchases from hawala partied, therefore the CIT(A) deleted 95% of the purchases from hawala partied, therefore the CIT(A) deleted 95% of the purchases from hawala partied, therefore the CIT(A) ought have confirmed 95% of ought have confirmed 95% of the creditors.
2. Briefly stated, facts of the case are that the Assessing Officer Briefly stated, facts of the case are that the Assessing Officer Briefly stated, facts of the case are that the Assessing Officer has made addition u/s 41(1) of the Income has made addition u/s 41(1) of the Income-tax Act, 1961 (in short tax Act, 1961 (in short ‘the Act’) for two amounts. Firstly, the addition of Rs.19,79,006/ ‘the Act’) for two amounts. , the addition of Rs.19,79,006/- is made on protective basis which is in made on protective basis which is in respect of purchases already respect of purchases already held as bogus and disallowed in earlier years, secondly, the held as bogus and disallowed in earlier years, held as bogus and disallowed in earlier years, amount of Rs.1,48,33,893/ amount of Rs.1,48,33,893/- is in respect of sundry creditors which is in respect of sundry creditors which were not subjected to disallowance in earlier years. were not subjected to disallowance in earlier years.
On further appeal, the Ld. CIT(A) has del On further appeal, the Ld. CIT(A) has deleted the protective eted the protective addition for the reason that in earlier year, the addition made on addition for the reason that in earlier year, the addition made on addition for the reason that in earlier year, the addition made on substantive basis towards bogus purchases has already been substantive basis towards bogus purchases has already substantive basis towards bogus purchases has already restricted to 5% by the Tribunal. The relevant finding of the Ld. restricted to 5% by the Tribunal. The relevant finding of the Ld. restricted to 5% by the Tribunal. The relevant finding of the Ld. CIT(A) is reproduced as under: CIT(A) is reproduced as under:
“9.0 In the appeal proceedings the assessee reiterated the stand taken appeal proceedings the assessee reiterated the stand taken appeal proceedings the assessee reiterated the stand taken before the AO and submitted that the Tribunal in his case for the earlier before the AO and submitted that the Tribunal in his case for the earlier before the AO and submitted that the Tribunal in his case for the earlier years decided the issue and treated the 5% of the purchases from the years decided the issue and treated the 5% of the purchases from the years decided the issue and treated the 5% of the purchases from the creditors as income. creditors as income. The assessee therefore took a stand that the same nd that the same cannot be once again added back as income on protective basis in the cannot be once again added back as income on protective basis in the cannot be once again added back as income on protective basis in the impugned order. impugned order. 10.0 As seen from the order in ITA 4402 to 4403/Mum/2018 w MA 210 10.0 As seen from the order in ITA 4402 to 4403/Mum/2018 w MA 210 10.0 As seen from the order in ITA 4402 to 4403/Mum/2018 w MA 210- 212/Mum/2020 dt 17.12.2020, the Tribunal directed the AO to restrict 212/Mum/2020 dt 17.12.2020, the Tribunal directed the AO to restrict 212/Mum/2020 dt 17.12.2020, the Tribunal directed the AO to restrict the addition to 5% the addition to 5% of the bogus purchases in the earlier assessment of the bogus purchases in the earlier assessment years. Considering the decision of the Tribunal the addition of Rs Considering the decision of the Tribunal the addition of Rs Considering the decision of the Tribunal the addition of Rs 1,09,79,006 on protective basis is therefore no longer tenable and hence 1,09,79,006 on protective basis is therefore no longer tenable and hence 1,09,79,006 on protective basis is therefore no longer tenable and hence deleted.” 3.1 As far as addition of Rs.1,48,33,893/ As far as addition of Rs.1,48,33,893/-, the Ld. CIT(A , the Ld. CIT(A) has upheld the addition observing as under: upheld the addition observing as under:
As regards, the addition of Rs 1,48,33,893 is concerned, the AO As regards, the addition of Rs 1,48,33,893 is concerned, the AO As regards, the addition of Rs 1,48,33,893 is concerned, the AO conclusively proved that the creditors were not genuine and in the appeal conclusively proved that the creditors were not genuine and in the appeal conclusively proved that the creditors were not genuine and in the appeal proceedings the assessee only reiterated the stand taken before the AO. proceedings the assessee only reiterated the stand taken before the AO. proceedings the assessee only reiterated the stand taken before the AO. Therefore, the decision of the AO to invoke provisions u/s 41(1) cannot be Therefore, the decision of the AO to invoke provisions u/s 41(1) cannot be Therefore, the decision of the AO to invoke provisions u/s 41(1) cannot be faulted. Therefore, the decision of the AO to invoke provisions u/s 41(1) faulted. Therefore, the decision of the AO to invoke provisions u/s 41(1) faulted. Therefore, the decision of the AO to invoke provisions u/s 41(1) cannot be faulted and hence the addition is confirmed cannot be faulted and hence the addition is confirmed
Aggrieved Aggrieved Aggrieved with with with the the the deletion deletion deletion of of of protective protective protective addition additi additi of Rs.1,09,79,006/- the Revenue has filed the Revenue has filed this appeal appeal . In the form prescribed for filing appeal i.e. the Form No. 36 prescribed for filing appeal i.e. the Form No. 36, the tax effect , the tax effect has been noted as Rs.32,37,071/ noted as Rs.32,37,071/-. The said tax effect is below the . The said tax effect is below the threshold limit prescribed by the Central Board of Direct Taxes threshold limit prescribed by the Central Board of threshold limit prescribed by the Central Board of (CBDT), New Delhi vide Circular No. (CBDT), New Delhi vide Circular No. 3/2018 dt. 20/08/2018 3/2018 dt. 20/08/2018 for filing appeal before the ITAT and therefore, the appeal of the filing appeal before the ITAT and therefore, the appeal of the filing appeal before the ITAT and therefore, the appeal of the Revenue is liable to be dismissed as infructuous. We order Revenue is liable to be dismissed as infructuous Revenue is liable to be dismissed as infructuous accordingly. However, later on if the Revenue finds that case falls accordingly. However, later on if the Revenue finds that accordingly. However, later on if the Revenue finds that under any of the exceptions to the said CBDT C under any of the exceptions to the said CBDT Circular or for any ircular or for any other reason the tax effect circular is not applicable on the other reason the tax effect circular is not applicable on the other reason the tax effect circular is not applicable on the assessee, the revenue he revenue is at liberty to file Miscellaneous Application at liberty to file Miscellaneous Application for recalling the order of the Tribunal for recalling the order of the Tribunal, if so advised.
In the result, the appeal of the Revenue is dismissed. result, the appeal of the Revenue is dismissed. result, the appeal of the Revenue is dismissed.