Loss on investment w/o not capital gain, hence covered by monetary limits for appeal filing

Loss on investment written off not capital gain and hence not covered by exception to monetary limits for filing appeal

ABCAUS Case Law Citation:
ABCAUS 3667 (2023) (02) ITAT

In the instant case, the Revenue had challenged the order passed by the CIT(A) in allowing capital loss arising out by the written off of investment allegedly in  the penny stock company.

Before the Tribunal, the assessee submitted that the total tax effect  involved in this case was less than the monetary limit prescribed for filing appeal by the Income Tax Department.

On the other hand the Revenue submitted that issue-in-dispute  in the case involved was of penny stocks and therefore, appeals  involving long term capital gain (LTCG)/short term capital loss (STCL) on penny stock, CBDT vide Circular No. 23 of 2019 has directed to decide the issue on merit as exception to the Circular No. 3/2018.

The Tribunal observed that the Circular No. 23 of 2019 mandates that wherever assessee has claimed bogus long term capital  gain/short term capital loss on penny stock, in such cases, CBDT has directed to consider the filing of the appeal on merit. 

The assessee submitted that the loss in the present case was arising from investment written off and not on account of capital loss arising from the penny stock and therefore said Circular No.  23 of 2019 was not applicable to the case.

The Tribunal observed that as per the grounds raised by the Revenue, CIT(A) had allowed claim of loss on investment written off. The Revenue had also accepted in the ground that long term capital gain or loss has not taken place in this case.

The Tribunal opined that the case of the assessee was not falling under the exceptions provided under CBDT Circular No. 23 of 2019.

Accordingly, the appeal filed by the Revenue was dismissed being covered by the monetary tax limit for filing appeal before the ITAT.

Download Full Judgment Click Here >>

• Deduction u/s 80P denied as return not filed u/s 139(1) but in response to notice u/s 148
• High Court denied pre-arrest bail to accused of fake ITC utilisation
• ITR was not non est for no e-verification when AO took cognizance of returned income
• Section 43CB & ICDS-III is applicable to contractors not to real estate developers
• Expenses of ESOP are allowable as revenue expenditure u/s 37(1) of Income Tax Act.