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TMI Blog2015 (6) TMI 1128X X X X Extracts X X X X X X X X Extracts X X X X ..... ad as under:- "1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting disallowance made by the AO of Rs. 6,97,723 for A.Y. 2006-2007 & Rs. 6,37,882 for A.Y. 2007-2008 on account of proportionate interest expenses without appreciating the facts and circumstances of the case." 3. Both the appeals relating to the same assessee on identical issue were heard together and are being disposed off by this consolidated order, for the sake of convenience. However, reference is being made to the facts of ITA No.7057/Mum/2010 to adjudicate the issue. 4. The learned AR for the assessee, at the outset, pointed out that the issue raised in the present appeals is squarely covered by the order of the Tribunal in ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Instructions fixing the monetary limits for the Revenue to file appeals before the Tribunal, all the High Courts and the Supreme Court. The CBDT from time to time, issues Instructions fixing the monetary limits with the object of not burdening the Courts and the Tribunal with matters where the tax effect was on a lower side. The CBDT vide Instruction No.5 of 2014 issued on 10.07.2014 had revised the earlier Instruction No.3 of 2011, dated 09.02.2011 wherein, the monetary limits and other conditions for filing the Departmental appeals in income tax matters before the appellate Tribunals, High Courts and Supreme Court were specified. The Instructions issued on 10.07.2014 were in supersession of the earlier Instructions and the monetary limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue had filed all the appeals on 12.10.2010. Admittedly, in the years under appeal, the tax effect is less than Rs. 4 lacs as prescribed in Instruction No.5 of 2014 issued by the CBDT. At the time of hearing of the appeals, the monetary limits prescribed by the CBDT stand revised by the said Instruction No.5 of 2014, dated 10.07.2014 under which, it has been provided that where the tax effect does not exceed Rs. 4 lacs in any of the assessment year then, no appeal can be filed before the appellate Tribunal. The issue arising before us is whether the said revised Instructions which were issued subsequent to the filing of the appeal by the Revenue could be applied to the pending appeal or applicable only to the new cases to be filed by the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same question of law will repeatedly arise, either in the case concerned or in similar case, appeal should be filed without being hindered by the monetary limits. The present instructions seem even to limit the issues insofar as the same question of law or recurring issue except to the extent provided in para 5. On a proper reading of para 5 of the instructions it would be clear that a duty is cast on the AO that even if the disputed questions arise for more than one assessment year then an appeal should be filed only in respect of those years where the monetary limit as specified in para 3 of the instruction^. The exception, however, is carved out in respect of a composite order of the High Court or appellate authority. In other word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 268A of the Income Tax Act, which is an exception to the provisions of Section 260 of the Act. The CBDT being mindful of this position has issued the aforesaid instructions. In our opinion, therefore, the instructions would be applicable to pending cases as well. We have already found that the Instruction no. 5 of 2008 and Instruction no. 3 of 2011 are paramateria. The Instruction no. 5 of 2008 has already been interpreted by this Court in CIT V/s Madhukar Inamdar (supra). It is not disputed that this judgement has not been challenged by the Revenue and therefore still holds the field." 5.8 Following the above said proposition laid down by the Hon'ble High Court in the case of CIT Vs. Smt. Vijaya V. Kavekar (supra), we hold th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case. The assessee company was in the business of Market Research, and it is not the case of department that the work in progress as shown by the assessee was incurred in relation to construction activities. Therefore, Accounting Standard-2 is applicable in the present case and not the Accounting Standard-7, dealing with accounting of construction contracts. The assessee had filed its opening and closing WIP based on direct cost. The interest was not included in the valuation of WIP. 6. From para 12 of the Accounting Standard-2 dealing with valuation of inventories, it is evident that interest and other borrowing costs are not required to be included in the valuation of inventories. Therefore, since, the valuation had been done as per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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