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of <h1>Revenue's interest expense appeals dismissed by Tribunal for AY 2006-07 & 2007-08. CBDT limit, rulings, AS applied.</h1> The Tribunal dismissed the Revenue's appeals concerning disallowance of interest expenses for assessment years 2006-2007 and 2007-2008. The appeals were ... Recomputation of the value of closing work-in-progress by attributing interest proportion to the work-in-progress - Held that:- The issue arising in the present appeal is identical to the issue before the Tribunal in assessment years 2004-2005 and 2005-2006. The AO in the year under appeal, in turn, following the decision made in assessment years 2002-2003, 2004-2005 and 2005-2006 had recomputed the valuation of work-in-progress at the close of the year resulting in addition of ₹ 6,91,723 in assessment year 2006-2007 and ₹ 6,37,882 in assessment year 2007-2008. Since the issue arising in the present appeal is identical to the issue before the Tribunal in assessee’s own case in assessment years 2004-2005 and 2005-2006, following the same parity of reasoning, we uphold the order of the CIT(A). Thus, the appeals filed by the Revenue for both the years are dismissed because of low tax effect and also because of the issue being covered by the earlier years of the Tribunal. Issues:- Disallowance of interest expenses for assessment years 2006-2007 and 2007-2008.- Applicability of revised Instructions issued by CBDT on monetary limits for filing appeals.- Valuation of closing work-in-progress and inclusion of interest component.Issue 1: Disallowance of Interest Expenses:- The appeals by the Revenue challenged the deletion of disallowance of interest expenses for the respective assessment years.- The tax effect in both appeals was below the limit set by CBDT for filing appeals before the Tribunal.- The issue was found to be covered by the Hon'ble Bombay High Court's ruling in a similar case.- The Tribunal upheld the deletion of the addition of interest expenses based on the earlier rulings and the tax effect being below the prescribed limit.Issue 2: Applicability of Revised Instructions by CBDT:- CBDT issued revised Instructions setting monetary limits for filing appeals before appellate authorities.- The revised limit was set at Rs. 4 lakhs for appeals before the Tribunal.- The Tribunal applied the revised Instructions to pending appeals, dismissing Revenue's appeals due to the tax effect being below the prescribed limit.- The Tribunal followed the precedent set by the Hon'ble Bombay High Court that the Instructions are applicable to pending cases as well.Issue 3: Valuation of Closing Work-in-Progress:- The issue of recomputation of the value of closing work-in-progress by including interest proportion was raised.- The Tribunal referred to a previous case where the valuation was done as per Accounting Standard-2, not including interest.- Following the same reasoning, the Tribunal upheld the order of the CIT(A) regarding the valuation of work-in-progress.- The appeals by the Revenue were dismissed for both years due to low tax effect and the issue being covered by previous Tribunal decisions.In conclusion, the Tribunal dismissed the Revenue's appeals based on the low tax effect, the applicability of revised Instructions by CBDT, and the valuation of closing work-in-progress being in line with Accounting Standards. The decisions were supported by earlier rulings and the specific monetary limits set by CBDT for filing appeals.
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