THE DCIT, CIRCLE-1(1)(1),, AHMEDABAD vs. BLOOM DECOR LIMITED, AHMEDABAD

The Revenue is aggrieved by the action of the ld.CIT(A) in deleting disallowance of Rs.45,59,000/- made on account of loss on forward contract charges and Rs.31,36,411/- made on account of foreign exchange fluctuation of buyer’s credit.

The ld.counsel for the assessee at the outset submitted that quantum of both the disputed additions Rs.76,95,411/-. This addition has been deleted by the ld.CIT(A). Tax effect on the disputed addition would be less than Rs.50 lakhs. He submitted that by virtue of recent CBDT Circular No.17 of 2019 dated 8.8.2019, Department has been instructed not to file appeal before the Tribunal where tax effect is below

2 Rs.50 lakhs. This instruction is applicable to the pending cases also. Therefore, the present appeal of the Revenue is liable to be dismissed at the threshold. Per contra, the ld.DR did not dispute applicability of the recent CBDT circular and left to the Tribunal to pass appropriate order in the matter.

After hearing both the sides and after perusal of the above CBDT Instruction, we are of the view that the present appeal of the Revenue falls within the purview of the CBDT Instruction cited (supra). It is not disputed by the Revenue that tax effect on the total disputed addition is more than Rs.50 lakhs, and therefore, keeping in view the above CBDT circular and provisions of section 268A of the Income Tax Act, we are of the view that the present appeal of the Revenue deserves to be dismissed. It is dismissed.

In the result, appeal of the Revenue is dismissed due to low tax effect.