Revenue appeals dismissed for low tax effect. Bogus purchases deletion upheld.

The appeals of the Revenue were dismissed. The appeals for Assessment Years 2012-13 and 2014-15 were dismissed as not maintainable due to the tax effect being below the prescribed limit. The addition on account of bogus purchases for Assessment Year 2012-13 was deleted as it was beyond the scope of Section 153A, with no incriminating material found during the search.

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Issues Involved:
1. Tax effect below the prescribed monetary limit for Assessment Years 2012-13 and 2014-15.
2. Deletion of addition on account of bogus purchases for Assessment Year 2012-13.

Detailed Analysis:

1. Tax Effect Below the Prescribed Monetary Limit:
At the outset, the counsel for the assessee submitted that the tax effect for the Assessment Years 2012-13 and 2014-15 is below the prescribed monetary limit of Rs. 50 lakhs as per CBDT Circular No.17/2019 dated 08.08.2019. The tax on the disputed amount for Assessment Year 2012-13 is Rs. 24,12,788/- and for Assessment Year 2014-15 is Rs. 32,91,299/-. The Departmental Representative (DR) admitted that the tax effect on the disputed issue is below Rs. 50 lakhs. Consequently, the appeals for these years were dismissed as not maintainable in view of the CBDT Circular.

2. Deletion of Addition on Account of Bogus Purchases:
The Revenue was aggrieved by the deletion of an addition of Rs. 1,83,96,122/- made by the Assessing Officer (AO) on account of bogus purchases for Assessment Year 2012-13. The original return of income was filed on 30.09.2012 declaring a total income of Rs. 47,40,63,460/-. A search was conducted in the Jakson Group of cases on 30.10.2013, and a notice under Section 153A was issued. During the assessment proceedings, the AO required the assessee to provide details of various parties along with confirmations for purchases above Rs. 10 lakhs. The AO issued notices to 39 parties, and in respect of one party, M/s. New Jain Spares, no reply was received, leading the AO to treat the purchases from this party as bogus.

Before the CIT(A), the assessee argued that the addition was beyond the scope of Section 153A as no incriminating material was found during the search. The CIT(A) observed that the issue was not pressed and dismissed it. However, on merits, the CIT(A) deleted the addition, noting that the required details were eventually provided, including confirmation of account, income tax return, VAT return, and bank statement. The CIT(A) found that the purchases were genuine and supported by documentary evidence, and there was no adverse material brought on record by the AO.

Before the Tribunal, the assessee reiterated that the assessment for Assessment Year 2012-13 had attained finality as no notice under Section 143(2) was issued within the prescribed time. The assessee relied on judgments from the Delhi High Court, which held that in the absence of incriminating material, additions beyond the original assessment scope were not permissible under Section 153A. The DR argued that the issue was not pressed before the CIT(A) and suggested remanding the matter to the AO.

The Tribunal held that the assessee could raise a legal issue even if it was not pressed before the CIT(A), as it did not require further investigation of facts. The Tribunal found that the addition was not based on any incriminating material found during the search but on existing records. Since the assessment for Assessment Year 2012-13 was not pending at the time of the search, it could not be considered an abated assessment. The Tribunal, following the principles laid down by the Delhi High Court, concluded that the addition was beyond the scope of Section 153A and deleted it. Consequently, the appeal of the Revenue was dismissed.

Conclusion:
All three appeals of the Revenue were dismissed. The appeals for Assessment Years 2012-13 and 2014-15 were dismissed as not maintainable due to the tax effect being below the prescribed limit. The addition on account of bogus purchases for Assessment Year 2012-13 was deleted as it was beyond the scope of Section 153A, with no incriminating material found during the search.

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