Case Law Details
ACIT Vs Arissan Infrastructures Private Limited (ITAT Kolkata)
The ITAT Kolkata dismissed the Revenue’s appeals for AYs 2013-14, 2015-16 and 2017-18. At the outset, the Tribunal noted that the tax effect in all the appeals was below ₹60,00,000. Referring to CBDT Instruction No. 9 of 2024 dated 17.09.2024, it held that the appeals were not maintainable, as they did not fall within any of the exceptions prescribed in the Instruction. The Tribunal, however, observed that if, upon verification, the tax effect exceeded the prescribed limit or the cases fell within any exception, the Revenue would be at liberty to file a Miscellaneous Application for revival of the appeals within the time permitted under the Act.
On merits, the Tribunal observed that the assessee had not sold any shares and had consistently valued its stock of shares on the basis of cost or market value, whichever was lower. The shares were held in a demat account, and the books of account had not been rejected. The Tribunal held that the Assessing Officer’s disallowance of the valuation loss effectively amounted to changing the assessee’s consistently followed method of stock valuation, which was not permissible. It also noted that the relevant CBDT circular was not applicable, as there was no sale of shares. Accordingly, the Tribunal upheld the order of the CIT(A) deleting the addition and dismissed the Revenue’s appeals.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
These are appeals by the Revenue against the orders of the Commissioner of Income-tax (Appeals), Kolkata-20, (hereinafter referred to as the “Ld. CIT(A)”]even dated 31.07.2024 for the AYs2013-14, 2015-16 & 2017-18.
2. At the outset, it is pertinent to note that the tax effect by virtue of relief given by the first appellate authority is less than Rs.60,00,000/- in all the appeals. As per CBDT Instruction bearing No. 9 of 2024 issued on 17thSeptember, 2024, CBDT has directed its subordinate authorities not to challenge the order of ld. CIT(Appeals) before Tribunal if tax effect by virtue of relief given by the ld. CIT(Appeals) is less than Rs.60,00,000/-. Such order could only be challenged if it comes within exceptions provided in the Instruction. Therefore, these cases do not fall in any of the exceptions and, these appealsare not maintainable.
2.1. On due consideration of the above facts and circumstances, we dismiss these appeals of the Revenue for want of tax effect. However, in case on re-verification of the facts at the end of the Assessing Officer, it comes out that tax effect is more or this case falls in any of the exceptions provided in this Instruction. Then Revenue will be at liberty to file Miscellaneous Application for revival of these appeals. Such application should be filed within the time limit provided in the Act.
2.2. All the appeals of the Revenue are dismissed.
3. We also note that in this case the assessee has not made any sale of shares and has only valued the stock of shares following method of valuation of cost or market value whichever is less. We note that this is the consistent method followed by the assessee for valuation of stocks. The shares were held in demat Account. We also note that the books of accounts of the assessee were not rejected and the assessee has been following the method of valuation consistently. Therefore, even on merit the appeal of the assessee has been rightly allowed by the ld. CIT (A). We note that the ld. CIT (A) has been held that the act of the ld. AO in disallowing the valuation loss is nothing but change in method of valuation which is not allowable and consequently deleted the addition. We even note that the clause of the CBDT circular is not applicable in this case as there is no sale of shares. Therefore, we uphold the order of ld. CIT (A) by dismissing the appeal of the Revenue.
3.1. In the result, the appeals of the Revenue are dismissed.
Order pronounced on 25.06.2026.
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