2019 (6) TMI 156 - HC - Income Tax

ITAT directs deletion of addition in favor of Assessee for AY 2007-08

Assistant Commissioner of Income Tax Circle-2 (1), Bilaspur, Chhattisgarh Versus Shri Praveen Saluja, In Front Of Ghosh Nursingh Home Tirapara, Bilaspur, Chhattisgarh.

The Revenue challenged the ITAT's order granting relief to the Assessee for the assessment year 2007-08. The ITAT directed the Assessing Officer to delete ... Monetary limit - low tax effect - maintainability of appeal - HELD THAT:- When the matter is taken up for consideration, learned Standing Counsel for the Revenue fairly concedes that the appeal was filed way back in June, 2018. By virtue of the 'new litigation policy' and the circular issued subsequently on 11.07.2018 by the Central Board of Direct Taxes (CBDT), the subject matter of litigation for approaching the High Court shall be of a minimum value of ₹ 50,00,000/- which requirement is not satisfied in the instant case, as in the present case, the tax effect is to the extent of ₹ 34,01,999/- only. This Court is also aware of the fact that the scope of the said circular was considered by the Apex Court and in terms of the contents of such circular, it has been held that the same is having retrospective application i.e. in respect of the pending litigations as well. Standing Counsel seeks permission of this Court to withdraw this appeal. Issues:Challenge by Revenue against ITAT order granting relief to the Assessee for assessment year 2007-08.Analysis:1. The Revenue challenged the ITAT order granting relief to the Assessee for the assessment year 2007-08. The assessment was initially finalized on 31.12.2008, and the appellate authority affirmed it on 30.01.2011. The Assessee filed a further appeal before the Tribunal, leading to the impugned order dated 17.01.2018 directing the Assessing Officer to delete an addition of Rs. 1,06,31,248. The Revenue contested this decision based on the unexplained excess stock of gold and silver found and seized during the assessment, along with other assets seized during the search and seizure operation.2. The substantial questions of law raised by the Revenue in the appeal included issues such as the justification of the ITAT in dismissing the Department's appeal, upholding the deletion of the addition made by the AO on account of unexplained excess stock of gold and silver, and the authenticity of the disclosure of excess stock under the VDIS-97 Scheme. The ITAT's decision to delete additions made under section 69A of the Act and the burden of proof on the Assessee in explaining transactions were also challenged.3. During the hearing, the learned Standing Counsel for the Revenue acknowledged that the appeal was filed in June 2018 but did not meet the minimum tax effect requirement of Rs. 50,00,000 as per the new litigation policy and circular issued by the CBDT. The tax effect in this case was only Rs. 34,01,999. Considering the retrospective application of the circular, the Standing Counsel sought permission to withdraw the appeal, which was granted by the Court.4. Consequently, the Court dismissed the appeal as withdrawn, in line with the new litigation policy and the circular issued by the CBDT. The decision highlighted the importance of meeting the minimum tax effect requirement for approaching the High Court and the retrospective application of relevant circulars in pending litigations.