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2020 (2) TMI 1546 - AT - Income TaxMaintainability of appeal - Monetary limit - Low tax effect - DR submitted that the appeal is protected under the exception provided in paragraph 10(e) of Circular No. 3/2018 dated 11.07.2018 as amended by the Central Board of Direct Taxes vide letter dated 20.08.2018 - HELD THAT - We have not found any reference to information received from any of the external sources as mentioned in paragraph 10(e) of circular dated 20.08.2018. Even, in course of hearing, learned Departmental Representative was unable to demonstrate that any information from external sources as per paragraph 10(e) of circular noted above was received by the AO. It is to be concluded that the only information available with the AO was the information received from DGIT (Inv.). In case of ITO vs. Late Amarchand P. Shah 2019 (8) TMI 1402 - ITAT MUMBAI the Tribunal has held that DGIT (Inv.) since works under the CBDT, could not be called an external source. The aforesaid decision has been followed in a number of decisions of the Tribunal as cited by the learned Authorized Representative. As per the ratio laid down in the decisions referred to above, information received from DGIT (Inv.) is not of the nature as referred to in paragraph 10(e) of CBDT Circular dated 20.08.2018. That being the case, the present appeal of the department will not be protected under the exception provided therein. Since, aforesaid decisions are by various Division Benches of the Tribunal, they are binding precedents. Accordingly, respectfully following the aforesaid decisions cited by the learned Authorised Representative, we hold that the instant appeal of the revenue is not protected by paragraph 10(e) of CBDT circular dated 20.08.2018. Hence, would not be maintainable in view of the CBDT circular No. 17/2019 dated 08.08.2019. Accordingly,dismiss the appeal.
Issues:
1. Deletion of addition of &8377; 73.50 Lacs made by Ld. AO in an assessment framed u/s 143(3) r.w.s. 147. 2. Maintainability of appeal by revenue due to tax effect being less than monetary limit of &8377; 50 Lacs. 3. Interpretation of CBDT Circulars regarding exceptions for additions made on account of accommodation share application money. 4. Application of CBDT Circular No. 23 of 2019 dated 06/09/2019 to cases involving bogus long-term capital gains (LTCG) / Short Term Capital Loss (STCL) on penny stocks. 5. Dismissal of revenue's appeal based on monetary limits set by CBDT Circulars. Analysis: Issue 1: The appeal by the revenue contested the deletion of addition of &8377; 73.50 Lacs made by the Ld. AO in an assessment framed u/s 143(3) r.w.s. 147. The matter was recalled for fresh hearing before the bench after being disposed of ex-parte initially. Issue 2: The Ld. Authorized Representative for Assessee argued that the appeal was not maintainable as the tax effect of quantum additions contested by revenue was less than the monetary limit of &8377; 50 Lacs as per Circular No.17/2019 dated 08/08/2019 issued by CBDT. The contention was supported by a decision in a similar case. Issue 3: The Ld. DR argued that the additions were made on account of accommodation share application money pursuant to search action by DGIT (Investigation) in a specific case, falling under an exception provided in CBDT Circular No. 23 of 2019 dated 06/09/2019. However, the bench found that the factual matrix did not align with the exceptions provided in the circular. Issue 4: The bench clarified that the subsequent CBDT Circular No. 23 of 2019 dated 06/09/2019 applied only to cases involving bogus long-term capital gains (LTCG) / Short Term Capital Loss (STCL) on penny stocks and not to cases of accommodation share application money. Issue 5: After perusing the case records and relevant circulars, the bench noted that the tax effect in dispute was below the prescribed limit of &8377; 50 Lacs, in line with Circular No.17/2019 dated 08/08/2019. The appeal was dismissed based on the monetary limits set by CBDT Circulars, with a provision for the revenue to seek recall if the matter falls under any exceptions or exceeds the prescribed monetary limit. This detailed analysis covers the key issues and the rationale behind the judgment delivered by the ITAT Mumbai.
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