Shri Mahesh Kumar Varyani, Kanpur vs Department Of Income Tax

Income Tax Officer 2(2) v. Shri. Mahesh Kumar Varvani Kanpur D-20, Panki Site 2 Kanpur TAN/PAN:AATPV2680B (Appellant) (Respondent)

Appellant by: Shri. O. N. Pathak, D.R. Respondent by: Shri. Vikash Garg, FCA Date of hearing: 29 04 2015 Date of pronouncement: 05 06 2015

ORDER

PER SUNIL KUMAR YADAV:

This appeal is preferred by the Revenue against the order of the ld. CIT(A), inter alia, on the following grounds:-

1. The Ld. CIT (A)-ll, Kanpur has erred in law and on facts in deleting the addition of Rs.1,50,000/- made by the Assessing Officer on the ground of foreign travelling expenses without considering the fact that the main business of the assessee is processing of pulses and during the course of assessment proceedings, the assessee failed to substantiate its claim.

2. The Ld. CIT CA)-II, Kanpur has erred in law and on facts in deleting the addition of Rs.7,85,499/- made by the Assessing Officer on account of valuation of stock of raw material without appreciating the facts that the assessee had deviated from the method of valuation of stock being followed by him consistently in the earlier years which is not accepted by the department and :-2-:

also from "Market Value" to mix of "Purchase Cost" and "Market Value".

3. The Ld. CIT (A)-II, Kanpur has erred in law and on facts in adopting "average cost" method to value closing stock even though in the case of the assessee, the more scientific method of valuation was the FIFO method based on the stock in hand on the Balance Sheet date and the acquisition cost thereof.

4. The order of the Ld. Commissioner of Income Tax (Appeals)-II, Kanpur dated 11.06.2014 being erroneous in law and on facts, be quashed and the order passed by the Assessing Officer dated 29.12.2009 be restored.

2. During the course of hearing, the ld. counsel for the assessee has invited our attention to the fact that ground No.3 raised by the Revenue in its appeal does not arise out of the order of the ld. CIT(A), as this ground has already been adjudicated by the Tribunal in the first round of appeal. Therefore, this ground deserves to be dismissed. Since these facts are not disputed by the ld. D.R., we reject ground No.3.

3. So far as the remaining two grounds are concerned, the learned Counsel for the assessee has submitted that the tax effect involved is less than the prescribed monetary limit, therefore, the Department ought not to have filed this appeal in view of the instructions issued by C.B.D.T.

2. The Learned D. R. did not controvert the above fact.

3. It is noticed that Section 268A of the Act has been inserted by the Finance Act, 2008 with retrospective effect from 1.4.1999. The provisions contained in section 268A read as under:-

"268A. (1) The Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for :-3-:

reference by any income-tax authority under the provisions of this Chapter.

(2) Where, in pursuance of the orders, instructions or directions issued under sub-section (1), an income-tax authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of--

(a) the same assessee for any other assessment year; or

(b)any other assessee for the same or any other assessment year.

(3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or instructions or directions issued under sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case.

(4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case. (5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) shall apply accordingly.]"

4. It is not in dispute that the Board's instructions or directions issued to the Income-tax Authorities are binding on the Income-tax :-4-:

authorities, therefore, the Department ought not to have filed this appeal in view of the provisions of section 268A of the Act, since the tax effect in the instant case is less than the amount prescribed for not filing the appeal. Accordingly, this appeal is dismissed.

4. In the result, the appeal of the Revenue is dismissed.

Order was pronounced in the open court on the date mentioned on the captioned page.

Sd/- Sd/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER

DATED: 5TH June, 2015 JJ:2904

Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR Assistant Registrar