M/s. CANDY HOLDING LTD., THANE V. ITO Wd. 6(2)(1), MUMBAI

ITA 1023/MUM/2006

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7280 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 03-08-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 10-02-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH: MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1023/MUM/2006 (ASSESSMENT YEAR: 2002-03) CANDY HOLDING LTD., 105, CHURCHGATE CHAMBERS, SIR VITHALDAS THAKERSEY MARG, MUMBAI -400 020 ....... APPELLANT VS ITO WD 6(2)(1), MUMBAI ..... RESPONDENT ITA NO.3256/MUM/2008 (ASSESSMENT YEAR: 2002-03) ITO WD 6(2)(1), MUMBAI ....... APPELLANT VS CANDY HOLDING LTD., 105, CHURCHGATE CHAMBERS, SIR VITHALDAS THAKERSEY MARG, MUMBAI -400 020 ..... RESPONDENT PAN: AAACC 2733 M ASSESSEE BY: MISS SANJEETA CHOWDHARY SHRI PRAMOD KUMAR PARIDA REVENUE BY: SHRI V.V. SHASTRI DATE OF HEARING: 03.08.2011 DATE OF PRONOUNCEMENT: 05.08.2011 O R D E R PER R.S. PADVEKAR, JM THESE TWO APPEALS, ONE BY THE ASSESSEE AND ANOTHER BY THE REVENUE IN WHICH TWO DIFFERENT ORDERS OF THE LD. CI T (A) ON THE ITA 1023/MUM/2006 3256/MUM/2008 CANDY HOLDING LTD. 2 QUANTUM AS WELL AS PENALTY U/S.271(1)(C) ARE CHALLE NGED. WE FIRST TAKE THE ASSESSEES APPEAL BEING ITA NO.1023/MUM/20 06. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE G ROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS )-VI, MUMBAI FAILED TO APPRECIATE THAT YOUR APPELLANT HAS CHANGED THEIR PLACE OF BUSINESS FROM MUMBAI TO PLOT NO.3, PRESTIGE NAGAR, NEAR NILGIRI HOTEL, VILLAGE- VEDAVA LLI, TALUKA- TALASARI, DIST : THANE, PIN-401 606, WHICH WAS INTIMATE TO HIM BEFORE PASSING THE ORDER WHICH DOES NOT FALL UNDER HIS JURISDICTION INSPITE OF THAT HE HAS PASSE D THE ORDER AT HIS OWN WHICH IS OUT OF HIS PURVIEW. 2. YOUR APPELLANT IS AN INVESTMENT COMPANY, HENCE EXPLANATION TO SECTION 73 OF THE INCOME TAX ACT, 19 61, IS NOT APPLICABLE TO YOUR APPELLANT. THE LEARNED COMMISSIO NER OF INCOME TAX (APPEALS)-VI, MUMBAI FAILED TO APPRECIAT E THAT THE LOSS INCURRED ON SHARE TRADING ACTIVITIES AMOUN T TO RS 3,31,91,508/- IS REQUIRED TO BE CONSIDERED AS BUSIN ESS LOSS INSTEAD OF CAPITAL LOSS. 3. BRIEFLY STATED THE FACTS ARE AS UNDER. THE ASSE SSEE-COMPANY IS ENGAGED IN THE TRADING IN SHARES AND ALSO MONEY LEN DING. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y. 20 02-03 ON 29.10.2002, DECLARING THE LOSS OF RS 66,603/-. THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY. AFTER DETAILED DISCUSSION, THE A.O. ALLOWED THE ENTIRE LOSS CLAIMED BY THE ASSESSEE, WH ICH WAS RS 3,31,91,508/- AND WHICH RESULTED INTO POSITIVE INCO ME OF RS 3,31,24,910/-. 4. THE ASSESSEE CHALLENGED THE ASSESSMENT MADE BY T HE A.O. BEFORE THE LD. CIT (A) RAISING DIFFERENT GRIEVANCES AGAINST THE ITA 1023/MUM/2006 3256/MUM/2008 CANDY HOLDING LTD. 3 ASSESSMENT ORDER. THE LD. CIT (A) DISPOSED OFF THE APPEAL EX-PARTE ON MERIT. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE PARTIES. WE FIND THAT THE ASS ESSEE WAS REPRESENTED BY ONE CHARTERED ACCOUNTANT BEFORE LD. CIT (A) WHO KEPT FILING APPLICATIONS FOR ADJOURNMENTS FROM ONE DATE TO THE ANOTHER DATE. AS PER THE FACTS NOTED BY THE LD. CIT (A), SUFFICIE NT OPPORTUNITY WAS GIVEN TO THE ASSESSEE BUT ON THE LAST DATE OF THE H EARING, THE ASSESSEE FILED AN APPLICATION/LETTER CHALLENGING THE JURISDI CTION OF THE LD. CIT (A) TO DECIDE THE ASSESSEES APPEAL BY TAKING GROUN D THAT THERE WAS CHANGE OF ADDRESS OF THE ASSESSEE AND HENCE, THE LD . CIT (A) BEFORE WHOM THE PRESENT APPEAL WAS PENDING SHOULD NOT DECI DE THE ASSESSEES APPEAL. IT APPEARS THAT, ON THE OBJECTI ON OF THE ASSESSEE ON THE ISSUE OF JURISDICTION, THE LD. CIT (A) GAVE ONE MORE OPPORTUNITY TO THE ASSESSEE ON 18.11.2005 BUT ON THAT DATE ALSO NO NE APPEARED ON BEHALF OF THE ASSESSEE AND HENCE, THE LD. CIT (A) D ISPOSED OFF THE APPEAL EX-PARTE ON MERIT BY GIVING THE REASON THAT ASSESSEE IS NO T INTERESTED IN PROSECUTING THE APPEAL. THE LD. COU NSEL ARGUES THAT THERE WAS NO PROPER OPPORTUNITY TO THE ASSESSEE TO REPRESENT THE CASE, AS ON THE OBJECTION FILED BY THE ASSESSEE IN RESPEC T OF THE JURISDICTION, NO HEARING WAS GIVEN AND IN UNDUE HASTE THE LD. CIT (A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. HE, THEREFORE, P RAYED THAT WITH SUITABLE DIRECTIONS THE MATTER MAY BE RESTORED TO T HE LD. CIT (A) TO DECIDE THE SAME AFTER GIVING OPPORTUNITY TO THE ASS ESSEE OF BEING HEARD. WE HAVE ALSO HEARD THE LD. D.R. WHO OBJECTE D FOR THE PRAYER OF THE LD. COUNSEL. 6. WE FIND THAT, THE CASE WAS FIXED ON MANY OCCASIO NS BY THE LD. CIT (A) AND ASSESSEE KEPT SEEKING ADJOURNMENTS THRO UGH ITS CHARTERED ACCOUNTANT. THE ASSESSEE FILED THE OBJEC TION ON THE JURISDICTION OF THE LD. CIT (A) TO DECIDE THE APPEA L ON THE REASON THAT THERE IS CHANGE OF THE ADDRESS OF THE ASSESSEE. WE FIND THAT APPEAL WAS FINALLY FIXED FOR HEARING ON 17.11.2005 ON WHIC H DATE THE ITA 1023/MUM/2006 3256/MUM/2008 CANDY HOLDING LTD. 4 CHARTERED ACCOUNTANT OF THE ASSESSEE APPEARED AND F ILED THE OBJECTION ON THE ISSUE OF THE JURISDICTION. THE LD. CIT (A) ADJOURNED THE CASE TO 18.11.2005 BY GIVING ONLY ONE DAYS TIME. IN OUR O PINION, AS THE IMPORTANT ISSUE OF JURISDICTION WAS RAISED THEN THE LD. CIT (A) SHOULD HAVE GIVEN SOME REASONABLE TIME TO THE ASSESSEE. W E, THEREFORE, CONSIDERED IT FIT TO SET ASIDE THE ORDER OF THE LD. CIT (A) AND RESTORE THE ENTIRE MATTER TO THE FILE OF THE CIT (A) FOR FRESH ADJUDICATION AND ALSO LEVY COST OF RS 1,000/- TO BE PAID BY THE ASSESSEE WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF THIS ORDER. NEEDLES TO SAY, THE ASSESSEE SHOULD FILE SUO MOTU HIS NEW ADDRESS FOR ISSUANCE OF THE NOTICE BEFORE T HE LD. CIT (A). THE LD. CIT (A) IS DIRECTED TO DISPOSE OF F THE APPEAL WITHIN A REASONABLE TIME AFTER GIVING OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. 7. NOW, WE TAKE-UP THE REVENUES APPEAL BEING ITA NO.3256/MUM2006. THE REVENUE HAS TAKEN THE FOLLOWI NG GROUND:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, LD. CIT (A) HAS ERRED IN DELETING PENALTY OF RS 1,18,49 ,368/- LEVIED BY THE A.O. U/S.271(1)(C) OF THE I.T. ACT. 8. THE REVENUE HAS CHALLENGED THE ORDER OF THE LD. CIT (A) DELETING THE PENALTY LEVIED BY THE A.O. AFTER PASSING THE AS SESSMENT ORDER U/S.143(3) DATED 30.3.2005 FOR THE A.Y. 2002-03. T HE A.O. LEVIED THE PENALTY OF RS 1,18,49,368/- U/S.271(1)(C) OF THE AC T. THE LD. CIT (A) DELETED THE PENALTY. 9. AS WE HAVE SET ASIDE THE APPEAL OF THE ASSESSEE ON THE QUANTUM TO THE FILE OF THE LD. CIT (A), WE CONSIDER IT FIT TO RESTORE THIS MATTER OF THE PENALTY ALSO TO THE FILE OF THE LD. CIT (A) TO DECIDE THE SAME AFRESH AFTER DISPOSAL OF QUANTUM APPEAL. ITA 1023/MUM/2006 3256/MUM/2008 CANDY HOLDING LTD. 5 10. IN THE RESULT, BOTH THE APPEALS; ASSESSEES AND REVENUES ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 5 TH AUGUST 2011. SD/- ( P.M. JAGTAP ) ACCOUNTANT MEMBER SD/- ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE : 5 TH AUGUST 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)VI, MUMBAI. 4) THE CIT-CITY-VI, MUMBAI. 5) THE D.R. H BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN ITA 1023/MUM/2006 3256/MUM/2008 CANDY HOLDING LTD. 6 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 03.08.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 03.08.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER