ACIT CIR 4(2), MUMBAI V. SWASTIKA INVESTMENT LTD, MUMBAI

ITA 1071/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87900 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 03-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 04-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JEETENDRA KUMAR
• Keywords: Opportunity of being heard

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI . . , . , ! BEFORE SHRI I.P. BANSAL, JM AND RAJENDRA, AM ./ I.T.A. NO.761/MUM/2011 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2007-08 SWASTIKA INVESTMENT LTD., 1 ST FLOOR, BANDOOKWALA BLDG., BRITISH HOTEL LANE, FORT, MUMBAI 400 001 ' ' ' ' / VS. ASSTT. COMMISSIONER OF INCOME TAX, CIR.4(2), MUMBAI $ ./ % ./ PAN/GIR NO. : AABCS 6585J ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) ./ I.T.A. NO.1071/MUM/2011 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2007-08 ASSTT. COMMISSIONER OF INCOME TAX, CIR.4(2), MUMBAI ' ' ' ' / VS. SWASTIKA INVESTMENT LTD., 1 ST FLOOR, BANDOOKWALA BLDG., BRITISH HOTEL LANE, FORT, MUMBAI 400 001 $ ./ % ./ PAN/GIR NO. : AABCS 6585J ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) ASSESSEE BY SHRI VIMAL PUNMIYA REVENUE BY : SHRI JEETENDRA KUMAR ' ) *+ / DATE OF HEARING : 12/01/2015 ,-# ) *+ / DATE OF PRONOUNCEMENT : 12/01/2015 . / O R D E R PER I.P.BANSAL,J.M: THESE ARE CROSS APPEALS AND THEY ARE DIRECTED AGA INST EX-PARTE ORDER PASSED BY LD.CIT(A)-8, MUMBAI DATED 29/11/2011 FOR ASSESSMENT YEAR 2007-08. GROUNDS OF APPEAL RAISED BY ASSESSEE AS WELL AS REV ENUE READ AS UNDER: ./ I.T.A. NO.761& 1071/MUM/2011 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2007-08 2 GROUNDS OF ASSESSEES APPEAL: 1. THE LEARNED A.O HAS ERRED IN DISALLOWING DEPRECIATI ON OF RS.9,75,000/- CLAIMED ON INTANGIBLE ASSETS PURCHASED FROM M/S. MONALISA I NFOTECH LTD. GROUNDS OF REVENUES APPEAL: 1. (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE IN RESPECT OF TRANSACTION CHARGES OF RS. 12,04,913/- U/S.40(A)(IA), WITHOUT APPRECIATING THE FACTS THAT THESE WERE COMPOSITE CHARGES FOR PROFESSIONAL AND TECHNICAL SERVICES REN DERED BY THE STOCK EXCHANGE TO ITS MEMBERS AND THE ASSESSEE HAS FAILED TO DEDUCT T DS THEREON.. II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT THESE SERVICES ARE ESSENTIAL IN NATURE AS THEY CAN ONLY BE AVAILED BY MEMBERS OF STOCK EXCHANGE. III. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN IGNORING THE FACTS THAT USE OF TECHNOLOGY AND ALGORITHMIC BASED PROGRAMS HAVE CONVERTED AN ERSTWHILE PHYSICAL MARKET INTO A DIGITALLY OPERATED MARKET. IV. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT THE SERVICES RENDER ED BY THE BROKERS ARE NOT STANDARD SERVICES BUT SERVICES THAT HAS BEEN DEVELOPED TO CA TER TO THE NEEDS OF THE BROKER COMMUNITY TO FACILITATE TRADING. V. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS OVERLOOKED THE FACT THAT THE BROKERS HAVE IN SUBSEQ UENT YEARS THEMSELVES STARTED DEDUCTING THE TDS ON SUCH PAYMENTS AND THAT THERE I S NO REASON TO GIVE A DIFFERENT TREATMENT IN THIS YEAR. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN FOLLOWING THE RATIO OF THE HON BLE SUPREME COURT JUDGMENT IN THE CASE OF M/S. TECHNO SHARES PRIVATE LTD VS CIT REPOR TED IN THE ITR, WHEN THE FACTS HAVE SUBSTANTIALLY CHANGED PAST 2005. THE BSE CARD CEASED TO EXIST IN FY:2005-06 AFTER DEMUTUALIZATION. THE ENTIRE COST OF THE CARD GOT TRANSFERRED TO THE 10,000 SHARES OF BSE ALLOTTED ON DEMUTUALIZATION, IE. THE VALUE OF THE CARD BECAME NIL IN TERMS OF SECTION 47(XIIIA) READ WITH SECTION 55(2)( AB). 3 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE IMPUGNED ORDER OF THE LD.CIT(A) IS CONTRARY TO LAW AND CONSEQUENTLY MERIT S TO BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROU ND, WHICH READ AS UNDER: 3. THE LD. CIT(A) HAS ERRED IN PASSING THE EX-PART E ORDER AND THE ASSESSEE WAS NOT GIVEN FURTHER OPPORTUNITY OF BEING HEARD. ./ I.T.A. NO.761& 1071/MUM/2011 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2007-08 3 3. IT WAS SUBMITTED BY LD. AR THAT ADDITIONAL GROU ND IS A LEGAL GROUND. IT WAS SUBMITTED THAT LD. CIT(A) IS REQUIRED TO DISPOS E OF THE APPEAL AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARD. LD. A R SUBMITTED THAT NO NOTICE WAS SERVED UPON THE ASSESSEE BY LD. CIT(A) AND WHIL E PASSING EX-PARTE ORDER ALSO LD. CIT(A) DID NOT SPECIFICALLY SAY THAT THE NOTICE S ISSUED BY HIM WERE SERVED UPON THE ASSESSEE. HE INVITED OUR ATTENTION TOWARD S FOLLOWING OBSERVATIONS OF LD. CIT(A) VIDE WHICH LD. CIT(A) HAS PROCEEDED TO DECI DE THE APPEAL FILED BY THE ASSESSEE EX-PARTE, QUA THE ASSESSEE. 1.THE HEARING FOR THE APPEAL HAD BEEN FIXED ON 26 .10.2010 AND 16.11.2010. HOWEVER, NEITHER ANY REPRESENTATION WAS MADE, EITHE R ORAL OR WRITTEN NOR ANY REQUEST FOR ADJOURNMENT HAD BEEN MADE. THE APPEAL IS, THEREFORE, DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 4. ON THE ADMISSION OF ADDITION GROUND WE HAVE HEAR D BOTH THE PARTIES. THERE IS A FORCE IN THE CONTENTION OF THE ASSESSEE THAT LD. CIT(A) WAS REQUIRED TO GIVE REASONABLE AND SUFFICIENT OPPORTUNITY TO THE A SSESSEE OF BEING HEARD BEFORE THE APPEAL FILED BY THE ASSESSEE COULD BE DISPOSED OF. FROM THE ABOVE OBSERVATION OF LD. CIT(A) IT IS CLEAR THAT THERE IS NO SPECIFIC FINDING GIVEN BY HIM THAT WHETHER ANY NOTICE OF HEARING WAS SENT TO THE ASSESSEE OR THAT NOTICE WAS PROPERLY SERVED UPON THE ASSESSEE. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOTH THE PARTIES, WE ADMIT THE ADDITIONAL GROUND RA ISED BY THE ASSESSEE AND HOLD THAT THE LD. CIT(A) HAS NOT BEEN GIVEN REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. THEREFORE, THE APPEAL FIL ED BY THE ASSESSEE AS WELL AS REVENUE ARE REQUIRED TO BE RESTORED BACK TO THE F ILE OF LD. CIT(A) FOR RE- ADJUDICATION AFRESH AFTER GIVING THE ASSESSEE A REA SONABLE OPPORTUNITY OF HEARING. LD. AR DID NOT EXPRESS ANY GRIEVANCE REGARDING RE STORATION OF THE ISSUE RAISED BY THE REVENUE IN ITS APPEAL. THE ENTIRE ISSUE RAI SED BY THE REVENUE WOULD ALSO BE RE-ADJUDICATED AFTER GIVING THE ASSESSEE A REASO NABLE OPPORTUNITY OF HEARING. 5. TO ENSURE COMPLIANCE ON BEHALF OF THE ASSESSEE, WE DIRECT THE ASSESSEE TO REPRESENT THE HEARING BEFORE LD. CIT(A) ON 12/03/2 015, WHICH DATE WAS DULY NOTED BY LD. AR AND HE ASSURED THAT ASSESSEE WOULD COMPLY WITH THE DIRECTIONS GIVEN BY THE BENCH FOR APPEARANCE BEFORE LD. CIT(A ). ./ I.T.A. NO.761& 1071/MUM/2011 ( ' ' ' ' # # # # / ASSESSMENT YEAR : 2007-08 4 6. SINCE WE ARE RESTORING BOTH THESE APPEALS TO TH E FILE OF LD. CIT(A), WE DO NOT EXPRESS ANY OPINION ON ANY OF THE ISSUES RAISE D IN BOTH THESE APPEALS AS THE SAME WILL BE RE-ADJUDICATED BY LD. CIT(A) AS PER DI RECTIONS GIVEN ABOVE. 7. IN THE RESULT, BOTH THE APPEALS ARE TREATED TO B E ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 12/01/2015 . . ) ,-# / 0'1 12/01/2015 - ) 2 SD/- SD/- (RAJENDRA) . . (I.P.BANSAL) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; 0' DATED 12/01/2015 . . . . ) )) ) '*3 '*3 '*3 '*3 43#* 43#* 43#* 43#* / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 5 ( ) / THE CIT(A)- 4. 5 / CIT 5. 362 '*' , , / DR, ITAT, MUMBAI 6. 27 8 / GUARD FILE. .' .' .' .' / BY ORDER, (3* '* //TRUE COPY// 9 99 9 / : : : : (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . .VM , SR. PS