DCIT4(1), MUMBAI V. AMU SHARES & SECURITIES LTD, MUMBAI

ITA 1106/MUM/2010

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8883 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 10-10-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 10-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BHARAT VYASAR
• Keywords: Difference of opinion

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL GBENCH M UMBAI , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & PAWAN SINGH, JUDICIAL MEMBER ./I.T.A./1106/MUM/2010 , /ASSESSMENT YEAR: 2004-05 DCIT -4(1), 6 TH FLOOR ROOM NO.640, AAYAKAR BHAVAN MUMBAI-400 020. VS. AMU SHARES & SECURITIES LTD. GROUND FLOOR, CRESCENT CHAMBERS, HOMI MODI CROSS STREET, FORT, MUMBAI-400 023. PAN:AAACA 3778 L ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI ARVIND KUMAR -DR ASSESSEE BY: SHRI BHARAT VYAS-AR / DATE OF HEARING: 10.10.2016 / DATE OF PRONOUNCEMENT:04.01.2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDERS DATED 10.11.2009 OF THE CIT( A)- 8,MUMBAI,THE ASSESSING OFFICER (AO) HAS FILED PRESENT APPEAL.ASSESSEE-COMPANY,ENGA GED IN THE BUSINESS OF SHARES AND STOCK BROKING AND SHARE TRADING ALSO,FILED ITS RETURN OF INCOME ON 30.10.2004,DECLARING TOTAL INCOME AT RS.2.83 LAKHS.THE AO COMPLETED THE ASSESSMENT U/ S.143(3) OF THE ACT ON 26.12.2006, DETERMINING ITS TOTAL INCOME AT RS.5.91 LAKHS. BRIEF FACTS: 2. EFFECTIVE GROUND OF APPEAL PERTAINS TO DELETION OF PENALTY, LEVIED BY THE AO UNDER SECTION 271(1)(C).DURING THE ASSESSMENT PROCEEDINGS, THE AO HELD THAT ASSESSEE WAS ENGAGED IN SPECULATIVE BUSINESS AND NOT IN SHARE TRADING AND J OBBING, AS CLAIMED BY THE ASSESSEE. ACCORDINGLY HE MADE DISALLOWANCE OF THE EXPENSES TO WARDS THE SPECULATION INCOME AND INVOKING THE PROVISIONS OF SECTION 271(1)(C ) LEVIE D A PENALTY OF RS. 89.53 LAKHS. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA),WHO CONFIRMED THE ORDER O F THE AO. THE TRIBUNAL (ITA/1824/ MUM/2008,DATED 11/10/2013)RESTORED BACK THE ISSUE T O THE FILE OF THE AO FOR FRESH ADJUDICATION. IN ORDER DATED 25/09/2014, PASSED UND ER SECTION 143 (3) READ WITH SECTION 254 OF THE ACT, THE AO HELD THAT THE JOBBING LOSS WAS T O BE ALLOWED TO BE SET OFF AGAINST THE SHARE TRADING PROFIT, THAT ASSESSEE WAS DEEMED TO BE CARR IED OUT SPECULATION BUSINESS IN VIEW OF THE EXPLANATION TO PROVISION TO SECTION 73, THAT EXPENS ES ALLOCATION WAS TO BE DONE PROPORTIONA - 1106/MUM/10-AMU SHARES & SECURITIES LTD. 2 TELY BETWEEN THE BUSINESS AND SPECULATIVE ACTIVITIE S, THAT NO SHOPRITE DISALLOWANCE WAS REQUIRED TO BE MADE. 4. IN THE MEANWHILE,THE FAA, WHILE ADJUDICATING THE PE NALTY APPEAL, HELD THAT THERE WAS DIFFERENCE OF OPINION BETWEEN THE AO AND THE ASSESS EE ABOUT THE NATURE OF THE EXPENDITURE, THAT THE ASSESSEE HAD DISCLOSED ALL THE NECESSARY D ETAILS WHILE FILING THE RETURN, THAT PENALTY UNDER SECTION 271(1)(C ) WAS NOT LEVIABLE. 4.1. DURING THE COURSE OF HEARING BEFORE US, THE DEPARTM ENTAL REPRESENTATIVE (DR) LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. THE AUTHORISE D REPRESENTATIVE (AR) STATED THAT ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE AO HI MSELF. 5. WE FIND THAT IN PURSUANCE OF THE ORDER OF THE TRIBU NAL, THE AO HAS REVERSED THE ORDER OF HIS PREDECESSOR.AS THE ADDITION ITSELF HAS BEEN HELD TO BE NOT SUSTAINABLE, SO, PENALTY PROCEEDINGS WOULD NOT SURVIVE.SECONDLY, THE FAA AS RIGHTLY POIN TED OUT THAT THE PENALTY WAS LEVIED IN THE CASE UNDER CONSIDERARTION THOUGH ALL THE NECESSARY DETAILS WERE FILED BY THE ASSESSEE AND THE AO HAD NOT AGREED WITH THE STAND OF THE ASSESSEE. I N OUR OPINION, THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. THEREFORE, UPH OLDING THE SAME, WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT, APPEAL FILED BY THE AO STANDS D ISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH JANUARY, 2017. 04 , 2017 SD/- SD/- ( ( ( ( /PAWAN SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 04.01.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR G BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.