Nima Specific Family Trust, Ahmedabad V. The A.C.I.T., Cen,Circle-1(1), Ahmedabad

CO 159/AHD/2007

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9225 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 6 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 31-12-2013
• Assessment Year: 2000-2001
• Appeal Filed On: 25-06-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Keywords: Block assessment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVE DI, A.M.) C.O. NO. 159/AHD/2007 (IN ITA NO. 7 97/AHD/2004) (ASSESSMENT YEAR: 2000-01) THE DY. COMMISSIONER OF INCOME-TAX CIRCLE-10, AHMEDABAD V/S NIMA SPECIFIC FAMILY TRUST C/O. NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAATN0269J APPELLANT BY : SHRI S.N. SOPARKAR A.R. RESPONDENT BY : SHRI O.P. BATHEJA, SR. D.R. ( )/ ORDER DATE OF HEARING : 31-12-2013 DATE OF PRONOUNCEMENT : 23 -01-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS CO. OF THE ASSESSEE IS AGAINST THE ORDER OF CI T(A)-XII, AHMEDABAD DATED 16.12.2003 FOR A.Y. 2000-01. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A TRUST WHICH FILED ITS RETURN OF INCOM E FOR AY 2000-01 ON 29.9.2000 DECLARING TOTAL INCOME OF RS 31,41,19,455 /-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) C.O. NO 159/A/2007 ( I N ITA NO. 797/A/2004) . A.Y. 2000- 01 2 VIDE ORDER DATED 31.3.2003 AND THE TOTAL INCOME WAS DETERMINED AT RS 34,26,94,640/-. AGGRIEVED BY THE ORDER OF AO, ASSES SEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 16.12 .2003 PARTLY ALLOWED THE APPEAL OF ASSESSEE. AGGRIEVED BY THE OR DER OF CIT(A), REVENUE FILED APPEAL BEFORE TRIBUNAL AND CO WAS ALS O FILED BY THE ASSESSEE. THE GROUNDS RAISED BY THE ASSESSEE IN THE CO READS AS UNDER:- 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE RE SPONDENTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN POINTS OF LAW AND FACTS. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE RE SPONDENTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN NOT DELETING DISALLOWANCE OF CAPITAL LOSS IN RESPECT OF TALEX PLASTICS LTD. AND SUKETU FASHIONS LTD. 3. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE RE SPONDENTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN HOLDING THAT VYAJ BADLA INCOME IS TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. IT IS SUBMITTED THAT LEARNED A.O. ASSESSED THE SAME UN DER THE HEAD INCOME FROM BUSINESS OR PROFESSION. RESPONDENT SUBMITS THAT IT SHOULD BE AS SESSED HEAD CAPITAL GAIN. 4. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE RE SPONDENTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE STATUS OF THE RESPONDENT TR UST AS THAT OF A.O.P. INSTEAD OF INDIVIDUAL AND THEREBY CONFIRMING DISALLOWANCE OF DEDUCTION U/S. 8 0L OF I.T. ACT. 1 ST GROUND IS GENERAL AND THEREFORE REQUIRES NO ADJUDI CATION. 2 ND GROUND IS WITH RESPECT TO DISALLOWANCE OF CAPITAL LOSS IN RESPECT OF TALEX PLASTIC LTD AND SUKETU FASHIONS LTD: 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON SCRU TINISING THE SHARE TRANSACTIONS DONE BY THE ASSESSEE ON THE BASIS OF E VIDENCE FOUND DURING SEARCH IN NIRMA GROUP, AO CONCLUDED THAT ASSESSEE H AD BOOKED LOSS OF RS 1,21,968/- ON SALE OF SHARES OF SUKETU FASHIONS LTD AND LOSS OF RS 7,546/- ON SALE OF TALEX PLASTIC LTD. THE AFORESAID LOSSES WERE DISALLOWED IN THE HANDS OF ASSESSEE ON PROTECTIVE BASIS AND AD DITION WAS MADE IN BLOCK ASSESSMENT ON SUBSTANTIVE BASIS. THE LOSS OF THE AFORESAID SHARES WAS HELD TO BE NON GENUINE BY CIT(A). AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS IN CO BEFORE US. C.O. NO 159/A/2007 ( I N ITA NO. 797/A/2004) . A.Y. 2000- 01 3 5. BEFORE US, THE LD A.R. SUBMITTED THAT IN THE BLOCK ASSESSMENT, THE AFORESAID LOSSES WERE ADDED AND SUBSEQUENTLY THE SA ME WERE DELETED BY HON'BLE ITAT (IT(SS)A NOS. 21 TO 30/AHD/2005 AND IT (SS)A 64 TO 67/AHD/2005 - BLOCK ASSESSMENT FOR THE PERIOD 1.4.1 995 TO 27.9.2001- ORDER DATED 28.2.2006). HE PLACED ON RECORD THE REL EVANT PORTION OF THE ORDER. HE FURTHER SUBMITTED THAT THE DEPARTMENT'S A PPEAL IN THE ASSESSEE'S OWN CASE (ITA NO 797/AHD/2004 ORDER DATE D 13.12.2013) IN REGULAR ASSESSMENT HAS BEEN DISMISSED BY THE HON'BL E TRIBUNAL. HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID ORDER. H E THEREFORE SUBMITTED THAT SINCE THE APPEAL OF REVENUE IS DISMISSED, THE PRESENT GROUND OF ASSESSEE NEEDS TO BE ALLOWED. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE LOSS ON SALE OF SHARES WAS DISALLO WED BY AO ON PROTECTIVE BASIS BUT THE SAME WAS DECIDED IN FAVOUR OF ASSESSEE BY THE TRIBUNAL BY DISMISSING THE APPEAL IN ITA NO. 797/AH D/2004 ORDER DATED 13.12.2013 BY HOLDING AS UNDER:- 3. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ADDITION OF RS.1,75,079/- WAS MADE ON PROTECTIVE BASIS ONLY AND NO ADDITION WAS MADE IN T HE BLOCK ASSESSMENT OF THE ASSESSEE ON SUBSTANTIVE BASIS. WITH REGARD TO LONG TERM CAPITAL LOSS OF RS. 20.91 LAKHS, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAME WAS DISALLOWED ON PROTECTIVE BASIS, AND THE ADDITION WAS MADE IN BLOCK ASSESSMENT ON SUBSTANTIVE BASIS. THE ADDITION MADE ON SUBSTANTIVE BASIS HAS BEEN DELETED BY THE IT AT, AHMEDABAD IN ASSESSEE'S OWN C ASE IN IT(SS)A NO.21/AHD/2005 ON MERITS, AND THEREFORE, THE ADDITION MADE ON PROTECTIVE BASI S IN THE HANDS OF THE ASSESSEE HAS TO BE DELETED. THE LEARNED DR COULD NOT CONTROVERT THIS SUBMISSION MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED TH E ORDERS OF THE AO AND THE CIT(A). WE FIND THAT SHORT TERM CAPITAL LOSS OF RS. 1,75,079/- WAS DISALLOWED ON PROTECTIVE BASIS, AND NO SUBSTANTIVE ADDITION WAS MADE IN THE BLOCK ASSESSME NT OF THE ASSESSEE. REGARDING OTHER ADDITION OF LONG TERM CAPITAL LOSS OF RS. 20.91 LAKHS, WE FI ND THAT SAME WAS DISALLOWED ON PROTECTIVE BASIS AND THE MAIN ADDITION WAS MADE IN THE BLOCK ASSESSM ENT OF THE ASSESSEE. FURTHER, IN APPEAL AGAINST THE BLOCK ASSESSMENT OF THE ASSESSEE IN IT( SS)A.NO 21/AHD/2005 DATED 28.2.2006, THE ADDITION MADE WAS DELETED BY THE TRIBUNAL, AND IT W AS HELD THAT THE ASSESSEE DULY INCORPORATED ALL C.O. NO 159/A/2007 ( I N ITA NO. 797/A/2004) . A.Y. 2000- 01 4 THESE SHARE TRANSACTIONS IN THE CAPITAL ACCOUNTS AN D OFFERED CAPITAL GAIN THEREOF, THIS CANNOT BE HELD TO BE UNDISCLOSED TRANSACTIONS. IN VIEW OF THI S DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE AGAINST THE BLOCK A SSESSMENT, WE ARE OF THE VIEW THAT THE ADDITION MADE ON PROTECTIVE BASIS CANNOT BE SUSTAINED AND NO INTERFERENCE IN THE ORDER OF THE LD. CIT(A) IS CALLED FOR, AND ACCORDINGLY, THE GROUND OF THE APPE AL OF THE REVENUE IS DISMISSED. 7. SINCE THE APPEAL OF REVENUE HAS BEEN DISMISSED BY T HE AFORESAID ORDER OF CO-ORDINATE BENCH OF TRIBUNAL BY THE ABOVE MENTIONE D FINDING THEREFORE THIS GROUND OF ASSESSEE NEEDS TO BE ALLOWED. IN THE RESULT THIS GROUND OF ASSESSEE IS ALLOWED. GR. NO 3 WAS NOT PRESSED AND THEREFORE DISMISSED AS NOT PRESSED. 8. GR. NO 4 IS WITH RESPECT TO CONFIRMING THE STATUS O F ASSESSEE AS AOP INSTEAD OF INDIVIDUAL: 9. THE STATUS OF THE ASSESSEE WAS CONSIDERED AS AOP IN STEAD OF 'INDIVIDUAL' AND THEREBY THE CLAIM OF DEDUCTION U/S 80L WAS DENI ED TO ASSESSEE. CIT(A) FOLLOWING HIS OWN ORDER IN EARLIER YEAR AND THE ORDER OF PREDECESSOR, HELD THE STATUS OF ASSESSEE TO BE AOP. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE U S. 10. BEFORE US, LD A.R. SUBMITTED THAT WHILE FINALISING THE ASSESSMENT U/S 143(3) OF THE ASSESSEE FOR AY 2002-03, AO HAS CONSI DERED THE STATUS OF THE ASSESSEE AS AN 'INDIVIDUAL' AND HE THEREFORE SU BMITTED THAT FOR THE YEAR UNDER APPEAL ALSO THE STATUS OF THE ASSESSEE B E CONSIDERED AS THAT OF INDIVIDUAL. HE FURTHER PLACED RELIANCE ON THE DECIS ION IN THE CASE OF CIT VS DEEPAK FAMILY TRUST 211 ITR 575 (GUJ). LD.D.R. O N THE OTHER HAND SUPPORTED THE ORDER OF LOWER AUTHORITIES. C.O. NO 159/A/2007 ( I N ITA NO. 797/A/2004) . A.Y. 2000- 01 5 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE US, THE LD A.R HAS RELIED ON THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF DEEPAK FAMILY TRUST (SUPRA). BEFORE US, THERE IS NOTHING ON RECORD TO SHOW THAT THE AFORESAID DECISION OF HONB LE GUJARAT HIGH COURT WAS CITED BEFORE CIT(A) AND THAT CIT(A) HAS CONSIDE RED IT BEFORE DENYING THE STATUS OF INDIVIDUAL TO ASSESSEE. WE TH EREFORE REMIT THE ISSUE TO THE FILE OF CIT(A) TO DECIDE THE STATUS OF THE A SSESSEE IN THE LIGHT OF THE AFORESAID DECISION OF JURISDICTION AT HIGH COUR T RELIED BY THE ASSESSEE AND AFTER GIVING A REASONABLE OPPORTUNITY OF HEARIN G TO BOTH THE PARTIES. THUS THIS GROUND OF ASSESSEE IS ALLOWED FOR STATIST ICAL PURPOSES. 12. IN THE RESULT THE CO OF THE ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 23 - 01 - 2014. SD/- SD/- (D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,A HMEDABAD