ITO, NEW DELHI vs. M/S NANCY SALES PVT. LTD., NEW DELHI

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ITA 3449/DEL/2011Status: DisposedITAT Delhi02 August 2016AY 2008-094 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 as the tax effect was less than the monetary limit prescribed by CBDT Instruction No. 21/2015. Therefore, the appeal was dismissed without going into the merits of the case.

What were the facts?

The Revenue appealed against the deletion of an addition of Rs. 10,00,000/- made on account of alleged share application money and premium. The addition was based on the AO's finding that the transaction involved an entry operator and the assessee failed to establish the identity, creditworthiness, and genuineness of the transaction.

What were the issues?

Whether the appeal is maintainable based on the tax effect and CBDT instructions. Whether the CIT(A) erred in deleting the addition made under Section 68 of the IT Act.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.

  • 216 CTR 199
    216 CTR 199 · SC
    4 citing

Income Tax Appellate Tribunal, DELHI BENCH - ‘E’, NEW DELHI

Before: SHRI H.S. SIDHU & SHRI ANADI N. MISHRA

For Appellant: Shri U.C. Dubey, Sr. DR
For Respondent: Shri Ved Jain, Adv

This appeal has been filed by Revenue against order dated 31.3.2011 of Ld.

CIT(A) - XVI, New Delhi. The grounds of appeal are as under:

1. “On the facts and circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition of Rs. 10,00,000/- made by the AO u/s 68 of the I.T. Act, 1961 on account of alleged share application money and share premium shown to have been received from M/s. Thar Steels P. Ltd. entry operator, being operated by Shri Tarun Goyal, an entry operator identified by the Investigation Wing of the Department. Ld. CIT(A) has not appreciated the fact that the assessee has failed to establish the physical identity and creditworthiness of concerned parties and genuineness of transactions in terms of section 68 of the Income-tax Act, 1961.

2. That on the facts and circumstances of the case and in law the Ld. CIT(A) erred in ignoring the fact that the judgment of the Hon’ble Supreme Court in the case of Lovely Exports (P) Ltd. 216 CTR 199 (SC) cannot be extended to a situation where a mechanism has been formed to introduce unaccounted money in the books of accounts with the help of accommodation entry providers which has been exposed by deep and detailed investigation carried out by the Investigation Wing of the Department. Moreover, the facts in the present case are distinguishable from the above cited case in so far as that the assesee could not produce Page 1 of 4

Asstt. year 2008-09 ITO vs. Nancy Sales Pvt. Ltd. any of the principal officers/directors of companies for examination whereas in the case cited above the AO never asked the assessee company to produce any of the share applicants for cross examination.

3. That on the facts and circumstances of the case and in law the Ld. CIT(A) erred in ignoring the fact that the directors of the share applicant companies were the employees of Shri Tarun Goyal, who worked in his office as peons, receptionists etc. These facts were revealed during the search proceedings made on 15.09.2008, which was also admitted by Shri Tarun Goyal that he provided accommodation entries and his various companies were used for this purpose.

4. The appellant craves to be allowed to add any fresh grounds of appeal and/or delete or amend any of the grounds of appeal.”

2.

We have heard both sides and we have also perused the materials on record. From the above, we find that the tax effect in Revenue’s Appeal is less than Rs.10,00,000/- . Therefore, this appeal is covered by Instruction No. 21/2015 dated 10th December, 2015 of CBDT, issued vide F.No. 279/Misc. 142/2007-ITJ (Pt.) . For the sake of convenience, the relevant portion of the aforesaid CBDT Circular is reproduced as under: “ …..

3.

Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: Monetary Limit S No Appeals in Income-tax matters (in Rs) 1 Before Appellate Tribunal 10,00,000/- 2 Before High Court 20,00,000/- 3 Before Supreme Court 25,00,000/-

It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. Page 2 of 4

Asstt. year 2008-09 ITO vs. Nancy Sales Pvt. Ltd.

….. …..

10.

This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/ Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/ not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed.” We are of the view that the aforesaid CBDT Instruction No. 21/2015 dated 10th 3. December, 2015 is applicable for the pending appeals filed by Revenue, as well as for the appeals to be filed by Revenue henceforth. In view of the aforesaid Instruction, therefore, Revenue should have withdrawn / not pressed the present Appeal, since the tax effect in the instant appeal is less than the prescribed limit of Rs. 10,00,000/- , specified in the aforesaid CBDT Instruction No. 21/2015 dated 10th December, 2015.

4.

In view of the foregoing, we conclude that the appeal is inconsistent with the aforesaid CBDT Instruction No. 21/2015 dated 10th December, 2015; and hold that the appeal is, therefore, not maintainable. Accordingly, we dismiss the appeal in limine, appeal being not maintainable; without going into the merits.

5.

In the result, this appeal, filed by Revenue; stands dismissed.

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