BHARAT DAMJI SAVLA, MUMBAI V. ACIT 20(1), MUMBAI

ITA 1261/MUM/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3504 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 27-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 23-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D PRAKASHKAR REDDYDR
• Assessee Lawyers: RAHUL K HAKANI
• Keywords: Business income

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.1261/MUM/2012 ASSESSMENT YEAR:2008-09 MR. BHARAT DAMJI SAVLA, A-32, HERITAGE, 3 RD FLOOR, DADABHAI ROAD, ANDHERI(W), MUMBAI-400058 ACIT-20(1), MUMNSI ( ! ' /ASSESSEE) ( # / REVENUE) PAN. NO. AADPS1 782L % #& ' ' ( / DATE OF HEARING : 29/02/2016 ' ' ( / DATE OF ORDER: 01/03/2016 ! ' / ASSESSEE BY SHRI RAHUL K. HAKANI # / REVENUE BY SHRI D. PRAKASHKAR REDDY-DR ITA NO. 1261/MUM/2012 MR. BHARAT DAMI SAVLA 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 13/12/2011, OF THE LD. FIRST APPELLATE AUTHORITY, M UMBAI, ON THE GROUND AS STATED IN THE GROUNDS OF APPEAL. 2. GROUNDS NO. 1 & 2 TREATING THE SHORT TERM CAPITA L GAINS OF RS.57,18,634/- AS BUSINESS INCOME IGNORING THAT THE ASSESSEE IS AN INVESTOR AND NOT A TRADER AND THE SH ARES WERE HELD AS INVESTMENT AND NOT STOCK IN TRADE AND FURTH ER HOLDING THAT THE SHARES WERE PURCHASED DURING THE Y EAR AND SOLD DURING THE YEAR WERE BUSINESS INCOME, BOTH THE SE GROUNDS WERE NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE. THE LD. DR HAD NO OBJECTION TO THE SUBMIS SIONS OF THE ASSESSEE, THEREFORE, BOTH THESE GROUNDS ARE DIS MISSED AS NOT PRESSED. 2.1. THE ALTERNATIVE GROUND I.E. GROUND NO.3 (A) AN D (B) ARE THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) D ID NOT APPRECIATE THE FACT THAT IF THE CAPITAL GAIN ARE TR EATED AS BUSINESS INCOME THEN THE ENTIRE PROFIT AND LOSS ACC OUNT HAS TO BE RECASTED BY TAKING THE OPENING STOCK AND CLOS ING STOCK AFTER DEDUCTING ALL EXPENSES IN RELATION TO THE BUS INESS AND ALL THE NET INCOME MAY BE TAXED AND FURTHER NOT ALL OWING THE EXPENSES SUCH AS DE-MAT CHARGES, INTEREST EXPENSES, BANK CHARGES, ETC FROM THE PROFIT FROM SALE OF SHARE AND TO SET OFF EARLIER YEARS BUSINESS LOSSES FROM THE SAID PROFIT. ITA NO. 1261/MUM/2012 MR. BHARAT DAMI SAVLA 3 2.2. DURING THE HEARING, THE CRUX OF ARGUMENTS IS IDENTICAL TO THE GROUND RAISED BY INVITING OUR ATTE NTION TO PAGE-9 TO THE STATEMENT OF INCOME AND PAGE-10 (OF T HE PAPER BOOK) CONTAINING TRADING AND PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31/03/2008, BY EXPLAINING THAT THE LD. ASSESSING OFFICER HAS NOT ALLOWED THE EXPENSES. THE LD. DR, THOUGH DEFENDED THE CONCLUSION ARRIVED AT BY THE LD . COMMISSIONER OF INCOME TAX (APPEALS) BUT FAIRLY ADM ITTED THAT IF THE TRIBUNAL IS INCLINED TO SEND THE MATTER TO THE FILE OF THE LD. ASSESSING OFFICER, THEN NECESSARY DIRECT ION MAY BE ISSUED TO EXAMINE THE CLAIM OF THE ASSESSEE. 2.3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND F ORCE IN THE ALTERNATIVE ARGUMENT OF THE ASSESSEE, BECAUSE, IF THE CAPITAL GAINS IS TO BE TREATED AS BUSINESS INCOME T HEN THE ENTIRE PROFIT & LOSS ACCOUNT NEEDS TO BE RECASTED AND THE RELATED EXPENSES, INCURRED BY THE ASSESSEE, IN RELA TION TO THE BUSINESS HAS TO BE CONSIDERED SUCH AS DE-MAT CHARGES, INTEREST EXPENSES, BANK CHARGES, IF ANY. THUS, THE LD. ASSESSING OFFICER IS DIRECTED TO EXAMINE THE CLAIM OF THE ASSESSEE AND AFTER PROVIDING DUE OPPORTUNITY TO THE ASSESSEE, DECIDE IN ACCORDANCE WITH LAW. NEEDLESS T O ADD, THERE HAS TO BE CONSISTENCY IN THE MANNER OF VALUAT ION OF THE STOCK-IN-TRADE AS AT THE BEGINNING AND THE CLOS E OF THE YEAR. FURTHER, ONLY THE CLOSING STOCK AS DETERMINED WOULD STAND TO BE CARRIED FORWARD TO THE FOLLOWING YEAR. THE ASSESSEE IS ALSO AT LIBERTY TO FURNISH NECESSARY EV IDENCE, IN ITA NO. 1261/MUM/2012 MR. BHARAT DAMI SAVLA 4 SUPPORT OF HIS CLAIM. THUS, THIS GROUND OF THE ASSE SSEE IS ALLOWED FOR STATISTICAL PURPOSES. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING ON 29/02/2016. SD/- SD/- ( SANJAY ARORA ) (JOGINDER SINGH) ! ' / ACCOUNTANT MEMBER # ' /JUDICIAL MEMBER % & MUMBAI; ) DATED : 01/03/2016 F{X~{T? P.S/. . . $#%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. +,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 % 1' ( + ) / THE CIT, MUMBAI. 4. 0 0 % 1' / CIT(A)- , MUMBAI 5. 3#4 .' , 0 +( 5 , % & / DR, ITAT, MUMBAI 6. 7& / GUARD FILE. / BY ORDER, /3+' .' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI ITA NO. 1261/MUM/2012 MR. BHARAT DAMI SAVLA 5