ITAT Dismisses Revenue's Appeal on Cash Deposits and Cessation of Liabilities Due to Low Tax Effect [Read Order]
The ITAT noted that the total tax effect of Rs. 50,28,724 was below the Rs. 60 lakh threshold set by the CBDT Circular
![ITAT Dismisses Revenues Appeal on Cash Deposits and Cessation of Liabilities Due to Low Tax Effect [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/01/ITAT-ITAT-Delhi-Low-Tax-Effect-Liabilities-Due-Cash-Deposits-Taxscan.jpg "ITAT Dismisses Revenues Appeal on Cash Deposits and Cessation of Liabilities Due to Low Tax Effect [Read Order]")
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the Revenue's appeal concerning cash deposits and cessation of liabilities for the Assessment Year 2017-18, citing a low tax effect. The Revenue-appellant appealed against the order dated 07.02.2024 passed by CIT(A) in the case of GB Springs Private Limited, respondent-assessee,for the Assessment Year 2017- 18...
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the Revenue's appeal concerning cash deposits and cessation of liabilities for the Assessment Year 2017-18, citing a low tax effect.
The Revenue-appellant appealed against the order dated 07.02.2024 passed by CIT(A) in the case of GB Springs Private Limited, respondent-assessee,for the Assessment Year 2017- 18 raising three main points. First, it argued that the CIT(A) wrongly removed an addition of Rs. 63,96,525 under Section 68 for unexplained cash deposits during demonetization, ignoring the unexplained cash withdrawals.
Second, the assessee claimed that the CIT(A) made a mistake in removing the same addition, not considering the company’s failure to prove the source and genuineness of the cash credits, based on the Supreme Court’s decision in Rupal Jain vs. CIT (2023).
Lastly, the assessee argued that the CIT(A) was wrong to delete the Rs. 2,64,490 addition under Section 41(1) for ceased liabilities, as the dues had been pending for over three years with no disputes.
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None appeared for the assessee, even though the notice dated 21.8.2024 was issued. The notice was returned with the postal remark 'no such company’.
The two member bench comprising Vimal Kumar ( Judicial Member ) and Shamim Yahya ( Accountant Member ) dismissed the Revenue's appeal ex parte, as none appeared for the assessee, after hearing the Authorised Representative(AR) and reviewing the records.
Read More: Supreme Court dismisses Appeal of Income Tax Department on ground of Low Tax Effect
It was noted that the total tax effect was Rs. 50,28,724, which was below the limit of Rs. 60 lakh set by Central Board of Direct Taxes ( CBDT ) Circular No. 09/2024 dated 17.09.2024. The Departmental Representative(DR) agreed that the appeal was not maintainable due to the low tax effect.
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Based on this, the tribunal dismissed the appeal as not maintainable, in line with the CBDT Circular.
To Read the full text of the Order CLICK HERE
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