DCIT, Circle - 12, Kolkata, Kolkata V. M/s. Rishav Commercial Co. Pvt. Ltd., Kolkata

ITA 1115/KOL/2011

• Counselvise Citation: [2013] 119 COUNSELVISE.COM (IT) 2957 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 26-08-2011
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Assessee Lawyers: K K GOSWAMI
• Keywords: Business income; Earning of tax free income
• Section: 143(3); 14A

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE . . . . . . . . , /AND ! '! , ) [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH, JM] # # # # / I.T.A NO. 1115/KOL/2011 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR: 200 6- 0 7 DEPUTY COMMISSIONER OF INCOME-TAX, VS. M/S. RISHA V COMMERCIAL CO. PVT. LTD. CIRCLE-12, KOLKATA. (PAN: AACCR0229B) ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 21.03.2013 DATE OF PRONOUNCEMENT: 21.03.2013 FOR THE APPELLANT: SHRI H. N. SINGH, SR. DR FOR THE RESPONDENT: SHRI K. K. GOSWAMI, ADVOCATE - / ORDER PER BENCH: THIS APPEAL BY REVENU IS ARISING OUT OF ORDER OF CI T(A)-XII, KOLKATA IN APPEAL NO. 283/CIT(A)-XII/CIR-12/08-09 DATED 01.06.2011. ASSES SMENT WAS FRAMED BY DCIT, CIRCLE-XII, KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HE REINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006-07 VIDE HIS ORDER DATED 23.12. 2008. 2. THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) IN RESTRICTING THE DISALLOWANCE U/S. 14A OF THE ACT FOR EARNING EXEMPT INCOME FROM DIVIDEND AT RS.1971/- ONLY. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN RESTRICTING DISALLOWANCE U/S. 14A TO RS.1971/- ONLY , AGAINST DISALLOWANCE OF RS.57,748/- MADE BY THE A.O. U/S. 14A FOR EARNING EXEMPT INCOME IN THE FORM OF DIVIDEND. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE AO MADE DISALLOWANCE U/S. 14A OF THE ACT AT RS.57,748/- FOR EARNING EXEMPT INCOME IN THE FORM O F DIVIDEND. THE ASSESSEE HAS EARNED DIVIDEND INCOME AT RS.1,97,142/-. IT IS A FACT THA T THE RELEVANT ASSESSMENT YEAR IS 2006-07 AND RULE 8D OF THE INCOME-TAX RULES, 1962 (HEREINAFTER REFERRED TO AS THE RULES) WILL NOT APPLY TO THE PRESENT YEAR AND PRESENT APPEAL IN VIEW OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ BOYCEE MFG. CO. LTD. VS. DCIT [ 2010] 328 ITR 81 (BOM.), WHEREIN IT WAS 2 ITA NO.1115/K/2011 RISHAV COMMERCIAL CO. PVT. LTD. AY: 2006-07 DIRECTED THAT THE DISALLOWANCE SHOULD BE RESTRICTED AT 1% OF DIVIDEND INCOME I.E. THE EXEMPT INCOME. WE FIND THAT THE CIT(A) HAS RESTRICTED THE DISALLOWANCE AT 1% OF THE EXEMPT INCOME AND WE CONFIRM THE SAME. THIS ISSUE OF REVENUES A PPEAL IS DISMISSED. 4. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DIRECTING THE AO TO CONSIDER THE INCOME OF RS.8,61,375/- UNDER THE H EAD CAPITAL GAINS AND NOT AS BUSINESS INCOME. FOR THIS, REVENUE HAS RAISED FOLLOWING G ROUND NO.2: II) THAT ON THE FACTS & IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) HAS ERRED IN DIRECTING THE A.O. TO CONSIDER INCOME OF RS.8,61,37 5/- UNDER THE HEAD CAPITAL GAINS I.E. STCG OF RS.3,52,634/- AND LTCG OF RS.5,09,011/-, WH ILE THE A.O. TREATED THE SAME UNDER THE HEAD BUSINESS AND PROFESSION. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE FACTS DISCUSSED BY C IT(A) THAT TH ERE IS NO BORROWED FUND AND ASSESSEE HAS NOT DEBITED ANY INTEREST TO THE P&L ACCOUNT AND HAS NO T CONTESTED BY THE REVENU BEFORE US NOW. IT IS ALSO A FACT THAT THE ASSESSEE HAS CONSISTENTLY S HOWN ITS SHARES AS INVESTMENT AND MAINTAINED A SEPARATE DEMAT ACCOUNT FOR THE INVESTMENTS AND ALSO EARNED DIVIDEND INCOME OF RS.1,97,143/-. ONCE IT IS A FACT THAT THE ASSESSEE IS HOLDING CONS ISTENTLY, THE PROFIT ARISING OUT OF SALE AND THOSE SHARES CANNOT BE HELD AS BUSINESS INCOME RATHER IT IS TO BE CALLED AS LONG TERM CAPITAL GAINS OR SHORT TERM CAPITAL GAINS, AS THE CASE MAY BE. WE F IND NO INFIRMITY IN THE ORDER OF CIT(A), HENCE WE CONFIRM THE SAME AND THIS ISSUE OF REVENUE S APPEAL IS DISMISSED. 6. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE MADE BY AO U/S. 24 OF THE ACT. FOR TH IS, REVENUE HAS RAISED FOLLOWING GROUND NO.3: III) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING DISALLOWANCE OF RS.3,24,000/- U/S. 24 MADE BY THE AO. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE CIT(A) HAS DECIDED THE ISSUE RELYI NG ON ITATS ORDER FOR AY 2003-04 IN ASSESSEES OWN CASE AND ALSO RELYING ON THE TRIBUNA LS DECISION. EVEN THE REVENUE HAS RAISED THE ISSUE THAT A MISC. PETITION HAS BEEN FILED BEFO RE ITAT ON THIS ISSUE, WHICH IS PENDING. EVEN NOW BEFORE US, THE LD. SR. DR COULD NOT ANSWER WHET HER THE MISC. PETITION IS PENDING OR DISPOSED OFF OR WHETHER ANY SUCH MISC. PETITION IS PENDING BEFORE THE TRIBUNAL. BUT THE LD. COUNSEL FOR THE ASSESSEE FILED A LETTER DATED 25.03 .2013 AND ALONG WITH THIS, HE FILED TRIBUNALS ORDER IN MA NO.143/K/2009 IN ITA NO.1676/K/2008 FOR AY 2003-04, WHEREIN M.A. OF THE 3 ITA NO.1115/K/2011 RISHAV COMMERCIAL CO. PVT. LTD. AY: 2006-07 REVENUE WAS DISMISSED UPHOLDING THE ORDER OF TRIBUN AL, IT MEANS THAT THE TRIBUNALS ORDER FOR AY 2003-04 IN ITA NO.1676/K/208 DATED 29.05.2009 ST ILL HOLDS GROUND. IN SUCH CIRCUMSTANCES, WE HAVE NO OPTION EXCEPT TO UPHOLD T HE ORDER OF CIT(A) AND WE DO THE SAME. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 8. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 9. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- . . . . . . . . , ! ! ! ! '! '! '! '! , (P. K. BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( . . . .) )) ) DATED : 21ST MARCH, 2013 /0 '$12 '3 JD.(SR.P.S.) 4 ITA NO.1115/K/2011 RISHAV COMMERCIAL CO. PVT. LTD. AY: 2006-07 - 4 +''5 65&7- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT DCIT, CIRCLE-12, KOLKATA 2 +,)* / RESPONDENT M/S. RISHAV COMMERCIAL CO. PVT. LTD., 234/3A, AJC BOSE ROAD, KOLKATA-700 020 3 . '-$ ( )/ THE CIT(A), KOLKATA 4. 5. '-$ / CIT KOLKATA. 5 <'= +'$ / DR, KOLKATA BENCHES, KOLKATA ,5 +'/ TRUE COPY, -$>/ BY ORDER, ! 2 /ASSTT. REGISTRAR .