M/s. Siddhiramya Investment, Ahmedabad V. The ACIT., Ahmedabad Circle-2, Ahmedabad

ITA 1203/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9442 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2000-2001
• Appeal Filed On: 07-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJEET KUMAR
• Assessee Lawyers: S N DIVATIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD D BENCH (BEFORE S/SHRI G.D.AGARWAL, VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER) ITA NO.1203/AHD/2008 [ASSTT. YEAR : 2000-2001] SIDDHIRAMAYA INVESTMENT 461/1, SAKAR BAZAR NR.MASKATI MARKET KALUPUR, AHMEDABAD. VS. ACIT, CIR.2 AHMEDABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.N. DIVATIA REVENUE BY : SHRI ABHIJEET KUMAR O R D E R PER G.D. AGARWAL, VICE-PRESIDENT : THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VII, AHMEDABAD DATED 16-11-2007 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 271(1)(C) OF THE ACT. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IS AGAINS T LEVY OF PENALTY OF RS.1,04,833/- UNDER SECTION 271(1)(C) OF THE ACT. 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THE PENALTY HAS BEEN LEVIED BY THE AO ON THE G ROUND THAT THE ASSESSEE WRONGLY CLAIMED SET OFF OF THE INTEREST INCOME AGAI NST THE LOSS FROM SALE OF SHARES. AS PER THE AO, THE LOSS FROM SALE OF SHARE S IS ASSESSABLE AS CAPITAL LOSS AND NOT AS BUSINESS LOSS. THEREFORE, HE DENIED THE SET OFF OF THE INTEREST INCOME AGAINST LOSS FROM SALE OF SHARES. HIS ORDER WAS UP HELD BY THE LEARNED CIT(A). 4. HOWEVER, ON APPEAL, THE ITAT VIDE ITS ORDER DATE D 9-10-2009 IN ITA NO.2408/AHD/2005 SET ASIDE THE ORDER OF THE AUTHORI TIES BELOW ON THIS POINT AND RESTORED THE MATTER BACK TO THE FILE OF THE AO. HE THEREFORE STATED THAT WHEN THE ADDITION ITSELF HAS BEEN SET ASIDE, THE PENALTY BASED ON THE ABOVE ADDITION CANNOT SURVIVE. HE FURTHER POINTED OUT THAT EVEN I F THE ASSESSEES CLAIM THAT THE ITA NO.1203/AHD/2008 -2- LOSS FROM SALE OF SHARES, IS AS A BUSINESS LOSS IS REJECTED THAT BY ITSELF WOULD NOT MAKE THE ASSESSEE LIABLE FOR PENALTY OF CONCEALMENT OF INCOME. IN SUPPORT OF ITS CONTENTION, HE RELIED UPON THE DECISIONS OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS LTD., 322 IT R 158 AND ALSO THE ITAT, AHMEDABAD BENCH IN THE CASE OF GUJARAT CREDIT CORPN . LTD. VS. ACIT, 113 ITD 133. HE THEREFORE SUBMITTED THAT THE PENALTY L EVIED UNDER SECTION 271(1)(C) MAY BE CANCELLED. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WHEN THE AD DITION IN RESPECT OF WHICH THE PENALTY UNDER SECTION 271(1)(C) HAS BEEN LEVIED , HAS BEEN SET ASIDE, THE PENALTY BASED UPON SUCH ADDITION CANNOT SURVIVE. WE THEREFORE CANCEL THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HOWEVE R, THE AO WILL BE AT LIBERTY FOR REINITIATING THE SAME AFTER THE COMPLETION OF S ET ASIDE ASSESSMENT. HOWEVER, WE MAY ALSO OBSERVE THAT IF THE PENALTY PR OCEEDINGS IS REINITIATED UNDER SECTION 271(1)(C), THE AO WILL ADJUDICATE THE ISSUE AFTER CONSIDERING THE DECISION OF HONBLE APEX COURT AS WELL AS THE ITAT AHMEDABAD BENCH, RELIED UPON BY THE LEARNED COUNSEL AND WHICH HAVE BEEN REF ERRED TO ABOVE. 6. IN RESULT, THE ASSSESSEES APPEAL IS DEEMED TO B E ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 4 TH NOVEMBER, 2010. SD/- SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 04-11-2010 COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD