What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The dismissal was based on the low tax effect of the appeal, following a Supreme Court precedent, and not on the merits of the case.

The Revenue appealed against an ITAT order directing the AO to verify the deletion of an addition of Rs. 12,00,000/-. This addition was made on payment from an undisclosed source in the assessee's hands, contingent on it being added to another entity's income, which had already been deleted.

What were the issues?

Whether the ITAT was justified in directing the AO to verify the deletion of an addition based on a condition that was already resolved. The appeal was dismissed due to low tax effect, leaving the legal issue open.

CIT vs Shri Ashok Goyal | Madhya Pradesh High Court 2019

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THE HIGH COURT OF MADHYA PRADESH Income Tax Appeal No.27/2014 (Commissioner of Income Tax, Bhopal vs.Shri Ashok Goyal) Jabalpur, Dated : 06.11.2019

Shri Sanjay Lal, Advocate for the appellant.

In this appeal filed under Section 260A of the Income Tax Act, 1961 by the Revenue against the order dated 26.7.2013 passed by the Income Tax Appellate Tribunal, Indore Bench, Indore in ITA No.410 to 416/Ind/2013, the Revenue has claimed following substantial question of law :-

“Whether on the facts and in the circumstances of the case, the ITAT was justified in law in directing the A.O. to verify whether the addition of Rs.12,00,000/- made by A.O. on payment made out of undisclosed source of income in the hands of assessee Shri Ashok Goyal may be deleted if the same is added in the hands of Sir Syed Education Society although the addition made in the hands of Sir Syed Education Society has been deleted by CIT (A) and department is in further appeal before ITAT?”

Learned counsel for the appellant candidly admitted that the challenge in the present appeal is regarding addition of Rs.12,00,000/- as would be clear from the substantial question of law as proposed above. In the aforesaid premise, it was stated that the tax effect without interest and penalty would be less than Rs.4,00,000/-. The Apex Court in the case of Commissioner of Income Tax Vs. Dhanalekshmi Bank Limited (2015) 14 SCC 749 had dismissed the appeal of the revenue without going into the merits of the appeal due to low tax effect leaving the question of law open. In view of the above order of the Apex Court, the present appeal is dismissed. It is, however, clarified that dismissal of the appeal shall not be taken to be affirmation of order of the Tribunal on merits. Further, the legal issue as claimed by the Revenue is being left open to be adjudicated in an appropriate case.

(Ajay Kumar Mittal) (Sanjay Yadav) Chief Justice

Judge

C. Digitally signed by CHRISTOPHER PHILIP Date: 2019.11.11 16:17:08 +05'30'

COMMISSIONER OF INCOME TAX vs. SHRI ASHOK GOYAL

What did the High Court hold?

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