2020 (7) TMI 209

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n account of expenses on commodity transaction on total turnover of Rs. 9,99,141/- which was held by the AO as unexplained cash credit u/s 68 of the IT Act, therefore, placing it under the head "Income from Business or Profession" and also deleting the addition made on account of commission paid to broker @ 2% i.e. Rs. 19,983/- for arranging the accommodation entry." (ii) Whether on the facts and circumstances of the case and in law the ld. CIT (A) was justified in deleting the additions made on the basis of corroborative information received from DGIT (Investigating)'s Wing, which is a law enforcement agency under the Ministry of Finance and accordingly the case falls under exception clause 10(e) of Circular 03 of 2018 dated 20.08.2018 ?....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rs. The said finding of the A.O. is based on the information received from the Investigation Wing of the Department. Thus, the question arises whether the addition made by the A.O. based on the information received from the Investigation Wing of the Department would fall in the exception provided in Clause (e) in para 10 of the Circular No. 03/2018 or not. At the outset, we note that identical issue has been considered by this Tribunal vide order dated 13.03.2020 in the case of ITO vs. M/s. A.P. Gems in ITA No. 627/JP/2019 in para 2.4 as under :- "2.4 Having considered the rival submissions and carefully perusal of the record, at the outset, we note that identical issue has been considered by this Tribunal vide order dated 29-11-2019 in t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....external sources in the nature of law enforcement agencies such as CBI/ED/DRI/SFIO/Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution has been filed by the Department and is pending in the Court." The relevant clause of para 10 is clause (e) which carves out the exception where the addition is based on the information received from external source as specified in the said clause. There is no dispute that the case of the assessees does not fall in the category of addition based on such information received from external source as provided under clause (e) of the amended para 10 of the Circular No. 3 of 2018. Further, the ld. D/R has relied upon the Circular No. 23 of 2019 which further provides some exception to ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....in on penny stocks. Therefore, the said Circular cannot be applied in the cases when the addition is not in respect of capital gain on penny stocks. Accordingly, the said circular will not help the cases of the department. Thus we hold that the appeals filed by the revenue do not fall in the exception as provided in the amended para 10(e) of the Circular No. 3 of 2018. Accordingly, the appeal of the department is not maintainable being monetary limit is less than/not exceeding Rs. 50,00,000/-. '' In the case in hand, the addition was made by the AO based on the information received from DIT (Investigation) of the Department which is not an external source in the nature of law enforcement agencies such as CBI/ED/DRI/SFIO/Director General....