IN INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MANISH BORAD, AM AND SHRI AMARJIT SINGH, JM / I.T.A. No.646/Ahd/2017 (Assessment Year 2013-14) ITO, Ward-3(1)(3) Rushabhdev Infra Project 4th Floor, 403 B Wing, Vs. Pvt. Ltd. Pratyaksh Kar Bhavan, Nr. 509, Iscon Elegance, S. G. Polytechnic College, Highway, Satellite, Amwabadi Ahmedabad- Ahmedabad-380015. 380015. I.T.A. No.794/Ahd/2017 (Assessment Year 2013-14) Rushabhdev Infra Project / ITO, Ward-3(1)(3) Pvt. Ltd. Vs. 4th Floor, 403 B Wing, 509, Iscon Elegance, S. G. Pratyaksh Kar Bhavan, Nr. Highway, Satellite, Polytechnic College, Ahmedabad-380015. Amwabadi Ahmedabad- 380015. PAN/GIR No. AAFCR2520Q (Appellant) (Respondent) Revenue by Shri Vinod Tanwani (Sr. DR) Assessee by Shri M. S. Chhajed (AR) Date of Hearing 18/09/2019 Date of Pronouncement 19/09/2019 ORDER PER AMARJIT SINGH, JM Revenue as well as assessee have filed above mentioned appeals against order dated 05.01.2017 passed by Commissioner of ITA. No.646/Ahd/17 794/Ahd/2017 A.Y. 2013-14 Income Tax (Appeals)-9, Ahmedabad [hereinafter referred to as CIT(A) ] relevant to A.Y.2013-14. ITA. NO.646/Ahd/2017 2. revenue has filed present appeal against order dated 05.01.2017 passed by Commissioner of Income Tax (Appeals)-9, Ahmedabad [hereinafter referred to as CIT(A) ] relevant to A.Y.2013-14. 3. We have heard Ld. Representative of parties and perused record. During course of hearing, ld. DR for revenue submitted that tax effect involved in this appeal filed by revenue is less than Rs. 50 lacs and in view of latest CBDT circular No. 3/2018 dated 11-7-2018, and also modified circular No. 17/2019 dated 08/08/2019, appeal filed by revenue is not maintainable and needs to be dismissed. Ld. DR, further argued that, issue involved in this appeal is appears to be covered by exception provided under clause (e) of subsequent circular and therefore, if required revenue shall be allowed to file miscellaneous application to re-call order. We, find that, CBDT, recently had issued circular no. 3/2018 dated 11-7-2018, superseding its earlier circular no. 21/2015 and enhanced monetary limit for filing appeal before various appellate authorities and accordingly, enhanced monetary limit to Rs.20,00,000/- for filing appeal before Tribunal. Further, board has issued one more circular vide Circular no.17/2019 dated 08/08/2019 and enhanced monetary limit for filing appeal before appellate Tribunal to Rs. 50,00,000/- . Further, in said circular, CBDT had instructed its officer s to file application for withdrawal of appeal already filed or not to pursue pending 2 ITA. No.646/Ahd/17 794/Ahd/2017 A.Y. 2013-14 appeals. We, therefore, by taking into account CBDT circular No. 3/2018 dated 11-7-2018 and Circular no.17/2019 dated 08/08/2019 and also considering fact that tax effect involved in present appeal is less than amount of monetary limit fixed by CBDT for not filing appeal, dismissed appeal filed by revenue as not maintainable. We, further noted that Co-ordinate bench of ITAT, Ahmedabad Bench in ITA. No. 1398/Ahd/2004, vide order dated 14/08/2019 has passed detailed order considering new circular issued by CBDT and held that except amendment to para 3 of circular No.3/2018 dated 11/07/2018, all other portions of circular No.03/2018 (supra) have remain in fact, therefore, this circular is applicable even for pending appeals and accordingly, rejected arguments of revenue that effect of circular shall come into force from date of issue of this circular. Therefore, considering facts and circumstances of this case and also taken note of circulars issued by CBDT including circular No. 17/2019 dated 08/08/2019, and also by following decision of Co-ordinate Bench, we dismissed appeal filed by revenue as not maintainable. However, we keep open option to revenue to file miscellaneous application, if necessary, in case issues involved in present appeal comes within 3 exceptions as provided in para 10 of said circular and clause (e) of subsequent circular. In result, appeal filed by revenue is hereby dismissed. ITA. NO.794/Ahd/2017 4. assessee has filed present appeal against order dated 05.01.2017 passed by Commissioner of Income Tax (Appeals)-9, 3 ITA. No.646/Ahd/17 794/Ahd/2017 A.Y. 2013-14 Ahmedabad [hereinafter referred to as CIT(A) ] relevant to A.Y.2013-14. 5. assessee has raised following grounds.:- 1. order passed by Ld. CIT(A) is against law, equity & justice. 2. Ld. CIT(A) has erred in law and on facts in upholding addition to extent of Rs.43,53,144/- being 25% of purchase as bogus purchase. 3. appellant craves liberty to add, alter, modify or amend any or all grounds of appeal before final hearing. 6. brief facts of case are that assessee filed its return of income on 26.09.2013 declaring total income to tune of Rs.Nil for A.Y.2013-14. assessment of assessee was reopened under CASS. Notices u/s 143(2) & 142(1) of Act were issued and served upon assessee. assessee was in business of Real Estate Development. During search action of M/s Tricon construction some bogus dealers were identified. Assessee was found beneficiary. case of assessee was reopened on basis of information received from DIT(Inv.), Ahmedabad. assessee has taken bogus entries of six parties whose names are mentioned as under.:- 1. Shri Bhavesh R. Patel (Prop. of Akshar Enterprises) 2. Shri Jivanlal H. Patel (Prop. of Arasuri Enterprise) 3. Shri Rahul V. Patel (Prop. Vaishvi Traders) 4. Shri Hiteshkumar G. Patel 5. Shri Kalpesh R. Patel 6. Shri Kamlesh Premjibhai Sondarva 7. Thereafter, AO disallowed said bogus purchase and added to income of assessee. Feeling aggrieved, assessee filed appeal 4 ITA. No.646/Ahd/17 794/Ahd/2017 A.Y. 2013-14 before CIT(A) who restricted addition to extent of 25% of bogus purchase. Feeling aggrieved, assessee filed present appeal before us. 8. We have heard arguments advanced by Ld. Representative of parties and perused record. Ld. Representative of assessee has argued that CIT(A) has wrongly confiormed addition to extent of 25% of total bogus purchase in sum of Rs.43,53,144/-, therefore, finding of CIT(A) is liable to be set aside in interest of justice. It is also argued that transaction was effected through banking channel, therefore, claim of Assessee is not liable to be declined. Ld Representative of Department refuted said contention. case of assessee was reopened upon information received from DIT(Inv.), Ahmedabad. AO raised addition to extent of 100% of total bogus purchase to income of assessee and accordingly taxed and CIT(A) has also restricted addition to extent of 25% of total bogus purchase of assessee to tune of Rs.43,53,144/-. assessee is in profession of Real Estate Development. It is settled that 100% of addition is not justifiable. In this regard, we find support of law settled in case CIT Vs.Nikunj Eximpt Enterprises (P) Ltd. (2013) 216 Taxman 171 (Bom). In case CIT Vs. Simit P. Sheth (2013) 356 ITR 451 (Guj) (High Court) ,It is held that addition is required to be added to income of assessee to extent of income embedded in bogus purchase. sale is not disputed. On seeing facts and circumstances of case, we are of view that addition to extent of 25% of bogus purchase is very high, therefore, we restrict addition of bogus purchase to extent of 12.5% of bogus purchase. 5 ITA. No.646/Ahd/17 794/Ahd/2017 A.Y. 2013-14 Accordingly, these issues are decided in favour of assessee against revenue. 9. In result, appeal filed by revenue is hereby ordered to be dismissed and appeal filed by assessee is hereby ordered to be partly allowed. Order pronounced in open court on 19/09/2019 Sd/- Sd/- (MANISH BORAD) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER Ahmedabad Dated 19/09/2019 Vijay/Sr. PS 6 ITA. No.646/Ahd/17 794/Ahd/2017 A.Y. 2013-14 /Copy of Order forwarded to 1. Appellant 2. Respondent. 3. CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, True Copy (Assistant Registrar) ITAT, Ahemedabad 7 ITO, Ward-3(1)(3), Ahmedabad v. Rushabhdev Infra Project Pvt. Ltd