M/s Mago Tools Corporation, Ludhiana V. ITO, Ludhiana

ITA 122/CHANDI/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7567 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 13-01-2017
• Result in Favour of: Set Aside
• Court: TRIBUNAL
• Department Lawyers: MANOJ KU MAR SR
• Keywords: Capital asset

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBE AND MS. ANNAPURNA GUPTA, ACCOUNTANTMEMBER ITA NO. 122/CHD/2017 ASSESSMENT YEAR : 2012-13 M/S MAGO TOOLS CORPORATION, VS. THE ITO , WARD-4 (1), 428-B, PARTAP CHOWK, LUDHIANA INDUSTRIAL AREA-B, LUDHIANA PAN NO. AAEFM3855D (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL RESPONDENT BY : SH. MANOJ KUMAR,SR.DR DATE OF HEARING : 05.07.2018 DATE OF PRONOUNCEMENT : 05.07.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSE SSEE AGAINST THE ORDER DATED 14.07.2016 OF THE COMMISSIONER OF I NCOME TAX(A)-2, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE SOLE ISSUE RAISED IN THIS APPEAL IS REGARDIN G THE LOSS OF TRANSACTIONS IN SHARES AND MUTUAL FUNDS WHETHER BE TREATED AS CAPITAL GAIN OR BUSINESS LOSS. THE LD. COUNSEL HAS INVITED OUR ATTENTION TO THE ITA NO. 122/CHD/2017- M/S MAGO TOOLS CORPORATION, LUDHIANA 3 WILL BE TREATED AS SUCH, IRRESPECTIVE OF THE VOLUME OF THE TRANSACTION IN SUBSEQUENT YEARS ALSO. 3. THE LD. DR, ON THE OTHER HAND, HAS RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES AND HAS SUBMITTED THAT THOUGHT TH E ASSESSEE HAD TREATED THE LOSS FROM THE TRANSACTION IN SECURITIE S AS CAPITAL LOSS IN ITS BOOKS OF ACCOUNT, HOWEVER, AT THE TIME OF FILIN G OF THE RETURN, THE ASSESSEE CLAIMED IT AS BUSINESS LOSS. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. LD. C OUNSEL FOR THE ASSESSEE HAS BEEN ABLE TO SHOW THAT THOUGH THERE WA S SOME DISCREPANCIES IN THE ACCOUNT DUE TO SOME INADVERTEN T MISTAKE ON THE PART OF THE AUDITOR, HOWEVER, IT WAS CLEAR FROM THE NOTES OF THE ACCOUNT OF THE AUDITOR WHEREIN IT HAS BEEN SPECIFIC ALLY MENTIONED THAT THE AFORESAID SECURITIES PURCHASED BY THE ASSESSEE WERE INTENDED TO BE TREATED AS STOCK-IN-TRADE. FURTHER, THE FACT T HAT IT IS NOT AN INTENTIONAL DEPARTURE FROM ITS EARLIER STAND IN TH E BALANCE SHEET, THE AFORESAID SECURITIES HAVE NEITHER BEEN SHOWN AS IN VESTMENT NOR AS STOCK-IN-TRADE, RATHER, THE SAME HAS BEEN SHOWN UND ER THE HEAD SECURITY LOAN & ADVANCES. IN VIEW OF THIS, WE ARE OF THE VIEW THAT IT IS NOT A CASE OF INTENTIONAL DEPARTURE OF EARLIER S TANCE OF THE ASSESSEE OF TREATING THE SECURITIES AS CAPITAL ASSETS RATHER THE ASSESSEE HAS BEEN ABLE TO DEMONSTRATE THAT FROM THE VERY BEGINNI NG, THE ASSESSEE WAS TREATING THE SECURITIES AS ITS STOCK-IN-TRADE. IN VIEW OF THIS, THE ORDER OF THE LOWER AUTHORITIES ON THIS ISSUE IS SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO TREAT THE LOSS FROM THE TRADING IN SECURITIES AS BUSINESS LOSS.