Court dismisses Revenue appeal in section 68 case for tax effect below CBDT monetary limit

5-Second Takeaway

The appeal was dismissed as not maintainable because the tax effect was below the Rs. 2 crore monetary limit for departmental appeals. The Revenue’s reliance on the exceptional category in CBDT Circular No. 5 of 2024 failed because it did not clearly identify which exception applied.

The Revenue challenged deletion of an addition of Rs. 2,73,00,000 made under section 68 as unexplained cash credit. The appeal, however, was confronted at the threshold by the departmental monetary limit for filing appeals.

The court noted that the tax effect in the matter was Rs. 88,57,485, which is below the Rs. 2 crore limit. The Revenue sought to invoke an exception under paragraph 3.1(h) of CBDT Circular No. 5 of 2024, but did not clearly state which exceptional clause was said to apply.

Finding no basis to entertain the matter, the court held that the appeal could not proceed. The connected application was also dismissed.