Yelamarthi Securities Pvt.Ltd., Hyderabad V. DCIT, Circle-3(3), Hyderabad

CO 52/HYD/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7196 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 19-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 12-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M H NAYAK
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 995/HYD/2011 ASSESSMENT YEAR : 2006-07 DY. COMMISSIONER OF INCOME-TAX, APPELLA NT CIRCLE 3 (3), HYDERABAD. VS. YELAMARTHI SECURITIES PVT.LTD., RESPONDENT HYDERABAD. (PAN AAACY0791K) C.O. NO. 52/HYD/2011 (IN ITA NO. 995/HYD/11 ASSESSMENT YEAR : 2006-07) YELAMARTHI SECURITIES PVT.LTD., CROSS O BJECTOR HYDERABAD. (PAN AAACY0791K) VS. DY. COMMISSIONER OF INCOME-TAX, RES PONDENT CIRCLE 3 (3), HYDERABAD. REVENUE BY : MR. M.H. NAYAK ASSESSEE BY : MR. AMRIT KUMAR KOTA DATE OF HEARING : 19/04/2012 DATE OF PRONOUNCEMENT : 19/04 /2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL IS PREFERRED BY THE REVENUE DIRECTED AGAINST THE ORDER OF CIT(A)-IV, HYDERABAD, DATED 31/03/2011 FO R THE ASSESSMENT YEAR 2006-07. THE ASSESSEE ALSO FILED C. O. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL:- I) THE CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW. II) THE CIT(A) HAS ERRED IN HOLDING THAT THE INCOME ADMITTED BY THE ASSESSEE UNDER THE HEAD CAPITAL GAINS SHOULD HA VE BEEN ASSESSED AS SUCH AND NOT AS ASSESSEES BUSINESS INC OME. 2 ITA NO. 995/HYD/2011& C.O.52/HYD/2011 YELAMARTHI SECURITIES LTD. III) THE CIT(A)S FINDING THAT THE ASSESSEE IS CONS ISTENTLY FOLLOWING THE SYSTEM OF ACCOUNTING INASMUCH AS SHAR ES ON OWN ACCOUNT ARE SHOWN AS INVESTMENTS IN ITS BALANCE S HEETS OVER THE YEARS AND THAT THE SHARE PURCHASE TRANSACTIONS ON OWN ACCOUNT WERE ONLY 10 IN THE ENTIRE YEAR AND THAT T HE OWN TRANSACTIONS WERE INSIGNIFICANT IN VOLUME, AS COMPA RED TO THE TRANSACTIONS CARRIED OUT IN THE MAIN BUSINESS OF SH ARE BROKING, IS NOT ACCEPTABLE. IV) THE CIT(A)S ORDER IS NOT ACCEPTABLE INASMUCH A SINGLE ACTIVITY OF PURCHASE AND SALE MAY BE TREATED AS BUS INESS, IF THE PURCHASE WAS INTENDED FOR RESALE. THEREFORE, THE CI T(A)S DECISION BASED ON THE VOLUME OF TRANSACTIONS, IS PE RVERSE AND NOT ACCEPTABLE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OU TSET, SUBMITTED THAT THE TAX EFFECT IN THE INSTANT CASE IS LESS THAN RS. 3 LAKHS. THEREFORE, IN VIEW OF CBDT INSTRUCTION NO. 3 OF 2011 DATED 9.2.2011 RE PORTED IN 332 ITR (STATUTE) 1 AND IN VIEW OF THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF MADHUKAR K. INAMDAR HUF, 318 ITR 149 (BOM), APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE AND, THEREFORE, THE SAM E MAY BE DISMISSED. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND TH AT, AFTER GIVING APPEAL EFFECT, THE TAX EFFECT INVOLVED IN THIS APP EAL FILED BY THE REVENUE IS LESS THAN RS. 3 LAKHS AND THIS POSITION HAS NOT BEEN DISPUTED EVEN BY THE LEARNED DR. AS PER THE CBDT IN STRUCTION NO. 3 OF 2011 ISSUED ON 09/02/2011, THE MONETARY LIMIT FO R FILING OF AN APPEAL BY THE DEPARTMENT BEFORE THE TRIBUNAL HAS BE EN REVISED TO RS. 3 LAKHS. AS DECIDED BY THE CBDT, APPEALS SHALL NOT BE FILED BY THE DEPARTMENT IN CASES WHERE TAX EFFECT DOES NOT E XCEED RS. 3 LAKHS. IN THE CASE OF CIT VS. MADHUKAR INAMDAR (HUF ) 318 ITR 149, THE HONBLE BOMBAY HIGH COURT HAS HELD THAT CBDT IN STRUCTION FIXING ANY MONETARY LIMIT FOR FILING THE APPEAL WOU LD APPLY EVEN FOR THE PENDING CASES. KEEPING IN VIEW THE SAID DECISIO N OF HONBLE JURISDICTIONAL HIGH COURT AND THE BOARD INSTRUCTION NO. 3 OF 2011 DATED 09/02/2011, WE HOLD THAT THE PRESENT APPEAL F ILED BY THE 3 ITA NO. 995/HYD/2011& C.O.52/HYD/2011 YELAMARTHI SECURITIES LTD. DEPARTMENT INVOLVING TAX EFFECT OF LESS THAN RS. 3 LAKHS IS NOT MAINTAINABLE AND THE SAME IS, THEREFORE, DISMISSED. 5. AS REGARDS THE C.O. FILED BY THE ASSESSEE RAISIN G A GROUND THAT FILING OF APPEAL TO ITAT IS AGAINST THE CBDT INSTRU CTION NO. 03/2011, DATED 9 TH FEBRUARY, 2011 IN RESPECT OF MONETARY LIMITS SPECIFIED. REVENUE COULD NOT BRING THAT THE APPEAL IS FILED ON THE EXCEPTIONS PROVIDED IN THE INSTRUCTIONS. SINCE, THE APPEAL OF THE REVENUE HAS BEEN DISMISSED (SUPRA), THE CO FILED BY THE ASSESSEE BECOMES INFRUCTUOUS AND, THEREFORE, THE SAME IS DI SMISSED AS INFRUCTUOUS. 6. IN THE RESULT, APPEAL OF THE REVENUE AND C.O. FI LED BY THE ASSESSEE ARE DISMISSED, AS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON 19/04/2012. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJ AYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 19 TH APRIL, 2012 KV COPY TO:- 1) DCIT, CIRCLE -3(3), HYDERABAD 2) YELAMARTHI SECURITIES, FLAT NO. 312, EMERALD APARTMENTS, AMRUTHA HILLS, PUNJAGUTTA, HYDERABAD. 3) THE CIT (A)-IV, HYDERABAD 4) THE CIT-III, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, B BENCH, I.T .A.T., HYDERABAD BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., HYDERABAD