The ACIT, Central Circle-1(3), Ahmedabad V. Shri Shreyans Shantilal Shah, Ahmedabad

ITA 1362/AHD/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1721 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-03-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 29-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Keywords: Retrospective amendment
• Section: 143(3); 14A; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO. 1362/AHD/2010 & CO NO. 175/AHD/2010 / ASSESSMENT YEAR: 2004-05 ACIT, CENTRAL CIRCLE 1(3), AHMEDABAD VS. SHRI SHREYANS SHANTILAL SHAH, GUJARAT SAMACHAR BHAVAN, KHANPUR, AHMEDABAD PAN : AIIPS 7279 K [ / (APPELLANT) / (RESPONDENT) & CROSS-OBJECTOR REVENUE BY : SHRI NARENDRA SINGH, SR. DR. ASSESSEE BY : SHRI S.N. SOPARKAR WITH SHRI PARIN SHAH, AR ! '# / DATE OF HEARING : 02/03/2016 / DATE OF PRONOUNCEMENT: 02/05/2016 $%/ O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE AND CROSS-OBJECTION THER EOF BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMM ISSIONER OF INCOME TAX (APPEALS)-I, AHMEDABAD, DATED 16.02.2010 FOR ASSESS MENT YEAR 2004-05. THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE INCOME- TAX ACT, 1961 (HEREAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2004- 05 WAS FRAMED ON 18.12.2008 BY DCIT, CENTRAL CIRCLE-1(3), AHMEDABAD. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN ITS APPEAL:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF RS.3,06,82,812/- O N ACCOUNT OF LOSS BY INVOKING PROVISIONS OF SECTION 94(7). ITA NO. 1362/AHD/2010 & CO NO. 175/AHD/2010 ACIT VS. SHRI SHREYANS SHANTILAL SHAH AY : 2004-05 - 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT( A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT. 3. BRIEFLY STATED FACTS, AS CULLED OUT FROM THE RECORDS, ARE THAT THE ASSESSEE IS AN INDIVIDUAL, CARRYING ON TRADING IN SHARES AND SECURITI ES. HE FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2004-05 ON 01.11.2004 SHOWING TOTA L LOSS OF RS.3,13,26,970/-. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSME NT U/S 143(3) OF THE ACT WAS FRAMED ON 29.12.2006, AFTER MAKING ADDITION OF RS.8,00,00 0/- U/S 14A OF THE ACT AND TOTAL LOSS WAS ASSESSED AT RS.3,05,26,966/-. SU BSEQUENTLY, DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) O F THE ACT FOR THE ASSESSMENT YEAR 2005-06, IT WAS NOTICED BY THE ASSESSING O FFICER THAT THE ASSESSEE HAD PURCHASED UNITS OF MUTUAL FUNDS IN ASSES SMENT YEAR 2004-05 AND SOLD THE SAME IN ASSESSMENT YEAR 2005-06 BEYOND THE PERI OD OF THREE MONTHS AFTER THE DATE OF PURCHASE AND THEREFORE WAS OF THE VIEW THAT THE PROVISIONS OF SECTIONS 94(7) OF THE ACT WERE APPLICABLE ON THE ASSESSEE SINCE THE LOSS ARISING ON SALE OF UNITS OF MUTUAL FUNDS WAS TO BE REDUCED BY THE DIVIDEND INCOME EARNED ON SUCH UNITS OF MUTUAL FUNDS; DUE TO THIS OBS ERVATIONS, PROCEEDINGS U/S 147 WAS INITIATED FOR ASSESSMENT YEAR 2004-05 AND NOTICE U/ S. 148 OF THE ACT WAS ISSUED ON 24.07.2008, WHICH WAS DULY SERVED UPON THE ASSESSEE AND IN COMPLIANCE TO THE SAME, THE ASSESSEE FILED RETURN OF IN COME ON 18.09.2008 SHOWING THE INCOME ORIGINALLY RETURNED. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 147 OF THE ACT, ASSESSEE SUBMITT ED THAT THE PERIOD OF NINE MONTHS FOR SALE OF UNITS OF MUTUAL FUNDS AS G IVEN IN SECTION 94(4)(B)(II) OF THE ACT IS APPLICABLE WITH EFFECT FROM 01.04.2005 AND WAS NOT APPLICABLE DURING ASSESSMENT YEAR 2004-05, DURING WHICH THE PROVISION S OF THIS SECTION ARE APPLICABLE ONLY IF THE UNITS OF MUTUAL FUNDS WERE SOLD WITHIN THE PERIOD OF THREE MONTHS FROM THE RECORD DATE. HOWEVER, LD. ASSESS ING OFFICER WAS NOT CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE AND WAS OF THE VIEW THAT AS THE ASSESSEE HAS PURCHASED THE UNITS OF MUTUAL FUNDS FOR RS .10.20 CRORES WITHIN THE ITA NO. 1362/AHD/2010 & CO NO. 175/AHD/2010 ACIT VS. SHRI SHREYANS SHANTILAL SHAH AY : 2004-05 - 3 PERIOD OF THREE MONTHS PRIOR TO THE RECORD DATE IN A SSESSMENT YEAR 2004-05 AND SOLD THEM WITHIN THE PERIOD OF NINE MONTHS FROM THE DATE OF PURCHASE IN ASSESSMENT YEAR 2005-06 AND THE PERIOD OF THREE MONTHS FO R SALE OF UNITS, WHICH HAS BEEN EXTENDED TO NINE MONTHS, IS TO BE RECK ONED FROM THE DATE OF PURCHASE, TRANSACTIONS OF SALE AND PURCHASE OF MUTUAL FUND S IS CLEARLY HIT BY THE PROVISIONS OF SECTION 94(7) OF THE ACT AND THE LOSS CL AIMED BY THE ASSESSEE AT RS.3,09,19,461/- IS TO BE REDUCED BY THE DIVIDEND RECEIVED AT RS.2,75,47,742/- AS WELL AS PROFIT SHOWN ON SALE OF THESE UNITS AT RS.31,35,070/- DURING ASSESSMENT YEAR 2005-06 AND ACCORDINGLY CALCULATED NET LOSS AT RS.2,36,649/- AS AGAI NST THE LOSS CLAIMED BY THE ASSESSEE AT RS.3,09,19,461/-. ACCORDINGLY, TH E INCOME OF THE ASSESSEE WAS ASSESSED AT RS.1,55,840/-. 4. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE L D. CIT(A) WHO DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER BY OBSERVIN G AS UNDER:- 5.2 I HAVE CONSIDERED THE REASSESSMENT ORDER AND THE ABOVE SU BMISSIONS. IT IS NOTICED FROM THE FACTS OF THE CASE THAT THE APPELLANT HAD ACQUIRED THE UNITS ON 18.12.2003 WHICH IS ALSO RECORD DATE. IN THE YEAR UNDER CONSIDERATIO N, THE PROVISIONS OF SECTION 94(7) WERE APPLICABLE IF UNITS A RE SOLD WITHIN 3 MONTHS AFTER THE RECORD DATE. THIS PERIOD OF 3 MONTHS HAD ALREADY EXPIRED B EFORE THE CLOSE OF THE YEAR. THE APPELLANT HAS ACQUIRED UNITS, AS PART O F BUSINESS ACTIVITY, AND, THEREFORE, VALUED THE STOCK IN TRADE AT COST OR MARKET VA LUE WHICHEVER IS LOWER. THIS METHOD OF ACCOUNT FOR VALUATION OF STOCK IN TRADE I S ALSO NOT IN DISPUTE. ON THE OTHER HAND THE ASSESSING OFFICER HAS CONSIDERED THAT THE UNITS WERE SOLD IN AY 2005-06 AND THEREFORE, THE EXTENDED PERIOD OF 9 MONTHS WHICH IS APPLICABLE FROM AY 2005-06 WOULD BE ATTRACTED FOR INVOKING IN SECTION 94( 7). IT IS SEEN THAT THE PROVISIONS OF SECTION 94(7) AS APPLICABLE IN THE YEAR UNDER CONSIDERATION WERE NOT ATTRACTED. HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN APPLYING PROVISIONS OF SECTION 94(7) AND DISALLOWING THE BUSINESS LOSS WHICH THE APPELLANT HAS INCURRED IN THE ABOVE MANNER. THE ASSESSING OFFICER I S THEREORE, DIRECTED TO ALLOW THE LOSS OF RS.309.19 LAKH AS INCURRED BY THE APPELLAN T IN RESPECT OF THE UNITS WHICH ARE HELD AS PART OF STOCK IN TRADE AND ARE VALUED AS PER THE RECOGNIZED METHOD OF VALUATION OF STOCK. THE DISALLOWANCE MADE BY THE A SSESSING OFFICER IS, THEREFORE, DIRECTED TO BE DELETED. 5. AGGRIEVED, THE REVENUE IS NOW IN APPEAL BEFORE THE TRIBUNA L. 6. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE O RDER OF THE LD. ASSESSING OFFICER. ITA NO. 1362/AHD/2010 & CO NO. 175/AHD/2010 ACIT VS. SHRI SHREYANS SHANTILAL SHAH AY : 2004-05 - 4 7. ON THE OTHER HAND, LD. AUTHORIZED REPRESENTATIVE RELIE D ON THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND FURTHER SU BMITTED THAT THE TRANSACTION OF UNITS OF MUTUAL FUND WOULD ATTRACT PROVI SIONS OF SECTION 94(7) IF THE UNITS WERE PURCHASED WITHIN 3 MONTHS PRIOR TO RE CORD DATE AND ARE SOLD WITHIN 3 MONTHS THEREOF. DURING THE YEAR UNDER CONS IDERATION, AS ON THE CLOSE OF THE YEAR, THIS PERIOD OF 3 MONTHS HAD ALREADY BEEN COM PLETED. IT IS STATED THAT AS THE UNITS WERE ACQUIRED AS PART OF BUSINESS ACTIV ITY OF THE APPELLANT, THE CLOSING VALUE AS ON 31.03.2004 WAS SHOWN AS PER THE ACCOUNTING PR INCIPLES AT COST OR MARKET VALUE WHICHEVER IS LOWER. THUS THE CLO SING VALUE AND LOSS CLAIMED WAS BONAFIDE. IT IS FURTHER SUBMITTED THAT AMENDM ENT WHEREBY PERIOD OF 3 MONTHS HAS BEEN CHANGED TO 9 MONTHS IS EFFECTIVE F ROM 1-4-2005 AND THUS IS EFFECTIVE FROM A.Y. 2005-06. THIS AMENDMENT CAME INTO EFFECT AS PE R THE FINANCE (NO.2) ACT 2004, THE BILL FOR WHICH WAS PLACED BEFORE THE P ARLIAMENT IN JULY 2004. IT IS STATED THAT THUS THE PROVISIONS OF SECTION 94(7) WERE NOT APPLICABLE. IT IS STATED THAT EVEN SALE OF UNITS HAD TAKEN PLACE MUCH BEFORE THE INTRODUCTION OF THE BILL RELATING TO AMENDMENT IN SECTION 94(7). HAVING NARRATED THE FACTS, THE APPELLANT SUBMITTED AS UNDER: '(A) THAT ALL THE TRANSACTIONS OF THE APPELLANT IN QUEST ION WERE BONA FIDE AND CARRIED ON IN THE NORMAL COURSE OF HIS BUSINESS; (B) THAT THE TRANSACTIONS OF SALE OF THE UNITS IN QUESTION D ID NOT ATTRACT THE PROVISIONS OF SECTION 94(7) AS THEY READ AT THE TIME WHE N THE APPELLANT ENTERED INTO THOSE TRANSACTIONS; (C) THAT SINCE THE AMENDMENT TO SECTION 94(7) BY THE F INANCE (NO.2) ACT, 2004 WAS EFFECTIVE ONLY FROM 1.4.2005, IT COULD BE APPLIED ONLY FOR MAKING ANY DISALLOWANCE OF LOSS ON THE SALE OF UNITS IN A.Y. 2005-06 OR THEREAFTER AND SINCE THE APPELLANT HAD NOT INCURRED AN Y LOSS AS SUCH ON THE SALE OF THE UNITS IN A.Y. 2005-06, THERE COULD BE NO QUESTION FOR INVOKING EVEN THE AMENDED SECTION 94(7) I N A.Y. 2005- 06; ITA NO. 1362/AHD/2010 & CO NO. 175/AHD/2010 ACIT VS. SHRI SHREYANS SHANTILAL SHAH AY : 2004-05 - 5 (D) THAT SINCE SECTION 94(7) COULD BE INVOKED ONLY FOR MAKING DISALLOWANCE OF A LOSS WHICH WAS INCURRED ON THE SALE O F UNITS, EVEN IF IT WERE ASSUMED THAT THE AMENDED PROVISION OF SECT ION 94(7) COULD SOMEHOW OR ANYHOW BE APPLIED EVEN TO A.Y.2004-05, NO MATTER TH AT IT WAS ANTERIOR TO THE FIRST A.Y.2005-06 WITH EFFECT FROM WHICH IT WAS CATEGORICALLY MADE EFFECTIVE, THERE BEING NO SALE OF TH E UNITS IN A.Y.2004-05, THERE COULD BE NO LOSS WHICH COULD BE CONSIDER ED FOR DISALLOWANCE UNDER THAT PROVISION; (E) THAT IT BEING A VERY WELL SETTLED LEGAL PRINCI PLE CONCERNING TAXATION OF INCOME THAT AN ASSESSMENT YEAR IS AN INDEPENDENT UNIT O F ASSESSMENT AND, THEREFORE, IT IS ONLY THE INCOME OR LOSS OF A PAR TICULAR ASSESSMENT YEAR WHICH CAN BE ASSESSED IN THAT YEAR, THERE WAS NO LEGAL BASIS FOR HIM TO SOMEHOW OR THE OTHER TREAT THE PROFIT OF RS.65,06,789 ON SALE OF THE UNITS IN A.Y.2005-06 AS PROFIT OF A.Y.2004- 05 AND ON THAT BASIS, TO MERGE IT WITH THE GREATER LOSS OF RS.3,09,19,461 WHICH WAS REQUIRED TO BE, AND WAS, ACCOUNTED IN A.Y.2004-05 AND THEN SUGGEST THAT THE REMAINING PORTION OF TH E LOSS OF A.Y.2004-05 MUST BE REGARDED AS LOSS FROM SALE OF THE UN ITS AND THAT TOO, OF A.Y. 2004-05, NO MATTER THAT THE SALE OF THE UNITS HAD TAKEN PLACE IN A.Y.2005-06.' 7.1 THE APPELLANT FURTHER SUBMITTED THAT HAVING REGARD T O THE FACTS OF THE APPELLANT'S CASE, SINCE THE AMENDMENT IN SECTION 94(7) IS EFFECTIVE IN A.Y. 2005- 06, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN APPLYING THE SAID PROVISION IN THE PRESENT ASSESSMENT ORDER. IN THE ALTERNATIVE, IT IS FUR THER SUBMITTED THAT EVEN OTHERWISE AS EXPLAINED IN EARLIER PART OF THE STATEMEN T OF FACTS IN THE SUBSEQUENT YEAR ON SALE OF UNITS, THE APPELLANT HAS SHOWN PROFIT OF RS.65,06,789/- AND THUS THE LOSS CLAIMED ULTIMATELY WORKS OUT TO RS.2,44,12,677/-. IT IS SUBMITTED THAT CONSIDERING THESE FACTS, EVEN THE DISALLOWANCE MADE BY THE A.O. IS E XCESSIVE. ITA NO. 1362/AHD/2010 & CO NO. 175/AHD/2010 ACIT VS. SHRI SHREYANS SHANTILAL SHAH AY : 2004-05 - 6 7.2 THE LD. AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF CO-OR DINATE BENCH, AHMEDABAD IN THE CASE OF ACIT VS. SMT. SMRUTI SHEYANS SHAH IN ITA NO.3214/AHD/2009 WHICH ALSO RELATED FOR ASSESSMENT YEAR 2004-05 AND THE RESPONDENT SM T. SMRUTI SHEYANS SHAH IS WIFE OF THE APPELLANT, AND THE APPEAL OF T HE REVENUE WAS DISMISSED BY THE CO-ORDINATE BENCH. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MA TERIAL ON RECORD. REVENUES SOLE SUBSTANTIVE GROUND IS AGAINST THE ORDE R OF LD. CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE LD. ASSESSING OFFICER BY APPLYING THE PROVISIONS OF SECTION 94(7) OF THE ACT. FROM GOING THROUGH THE RE CORDS, WE OBSERVE THAT THE ASSESSEE IS CARRYING ON TRADING IN SHARES AND SECURI TIES AND PURCHASED MUTUAL FUNDS UNITS WITHIN THREE MONTHS PRIOR TO THE RECORD DATE AND THESE UNITS WERE NOT SOLD UPTO TO THE CLOSE OF ASSESSMENT YEAR 2 004-05 AND VALUATION OF THESE UNITS WAS MADE ON THE BASIS OF COST OR MARKET PR ICE, WHICHEVER IS LOWER AND DUE TO THIS VALUATION, A LOSS OF RS.3,09,19,461/- WAS CLAIME D BY THE ASSESSEE IN ITS RETURN OF INCOME FILED. FURTHER, DIVIDEND OF RS.2,75,47,742/- WAS RECEIVED ON THE IMPUGNED UNITS OF MUTUAL FUNDS. PROVISIONS O F SECTION 94(7) FOR ASSESSMENT YEAR 2004-05 ARE APPLICABLE IF THE UNITS OF MUTU AL FUNDS WHICH HAVE BEEN ACQUIRED WITHIN THREE MONTHS PRIOR TO THE RECOR D DATE ARE SOLD WITHIN THE PERIOD OF THREE MONTHS OF SUCH RECORD DATE. THEREAFTE R, WITH EFFECT FROM 01.04.2005, THIS PROVISION WAS AMENDED AND THEREAFTER SECTION 94( 7) OF THE ACT WAS APPLICABLE IF SUCH MUTUAL FUNDS WHICH HAVE BEEN ACQU IRED WITHIN THREE MONTHS PRIOR TO THE RECORD DATE ARE SOLD WITHIN A PER IOD OF NINE MONTHS FROM SUCH RECORD DATE. THE LD. ASSESSING OFFICER WAS OF THE VIEW THAT THE AMENDED PROVISIONS FOR SALE OF UNITS WITHIN NINE MONTHS SHOULD HAVE BEEN APPLIED ON THE UNITS PURCHASED BY THE ASSESSEE DURING THE ASSESSMENT YEAR 2004-05. HOWEVER, LD. CIT(A) COMPLETELY STRUCK-OFF THE VIEW TAK EN BY THE LD. ASSESSING OFFICER. WE FURTHER OBSERVE THAT IDENTICAL ISSUE CAME UP BEFORE THE CO-ORDINATE BENCH IN THE CASE OF THE APPELLANTS WIFE FOR ASSESSME NT YEAR 2004-05 (SUPRA), ITA NO. 1362/AHD/2010 & CO NO. 175/AHD/2010 ACIT VS. SHRI SHREYANS SHANTILAL SHAH AY : 2004-05 - 7 WHEREIN THE CO-ORDINATE BENCH HAS DISMISSED THE REVEN UES APPEAL BY OBSERVING AS UNDER:- 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE CASE F ILE. THERE IS NO DISPUTE ABOUT FACTS AND FIGURES NARRATED HEREINABOVE. T HE ASSESSING OFFICER APPLIED SECTION 94(7) FOR READJUSTMENT OF ASSESSEES LOSSES FROM MUTUAL FUNDS TRANSACTIONS FROM THEIR RECORD DATE ACQUISITION TO S ALES AS A WHOLE. THE REVENUE STRONGLY REITERATES THE VERY VIEW IN THE COURSE OF HEARIN G. THE ASSESSEE SUPPORTS THE CIT(A) UNDER CHALLENGE. THERE IS NO ISSUE BETWEEN THE PARTIES THAT SECTION 94(7) IS APPLICABLE ONLY FROM 1.4.2005. THE IMPUG NED ASSESSMENT YEAR IS 2004-05. NOTHING HAS COME OUT IN THE REVENUE'S FAVOUR A PPLYING THE AFORESAID STATUTORY PROVISION IN THE IMPUGNED ASSESSMENT YEA R WITH RETROSPECTIVE EFFECT. THE CIT(A) APPLIES THIS PRECISE REASON FOR DELE TING THE IMPUGNED ADJUSTMENT. IT IS AN ADMITTED FACT THAT THE ASSESSEE HAD A CQUIRED HER MUTUAL FUND UNITS IN RELEVANT PREVIOUS YEAR BEFORE THREE MONTHS OF T HE 'RECORD DATE I.E. THE DATE FIXED FOR THE PURPOSE OF ENTITLEMENT OF THE HOLDER OF THE UNITS TO RECEIVE INCOME FROM THE SAME. SHE VALUED HER MUTUAL FUND UNITS AS PER THE MARKET PRICE AS ON 31.3.2004. NO INFIRMITY HAS BEEN FOUND IN THE SAID VALUATIO N. THE REVENUE SEEK TO INCLUDE THE IMPUGNED ASSESSMENT YEAR F OR THE PURPOSE OF RE- COMPUTATION MERELY BECAUSE THE AMENDED PROVISION OF SE CTION 94(7) STIPULATES A LIME PERIOD OF NINE MONTHS FROM THE RECORD DATE. WE OBSER VE IN THESE FACTS THAT THE ASSESSEE'S CASE IS GOVERNED BY THE PROVISION AND N OT THE ONE APPLICABLE W.E.F. ASSESSMENT YEAR 2005-06. WE DEEM IT PROPER TO OBSERVE AT THIS STATE THAT AN AMENDMENT HAVING REVENUE IMPLICATION IN A TAX STATUTE I S TO BE LITERALLY INTERPRETED. THE REVENUE DOES NOT POINT OUT ANY CASE LAW T O THE CONTRARY. THE CIT(A) ORDER UNDER CHALLENGE IS ACCORDINGLY AFFIRMED ON THIS SCORE ALONE. THE REVENUES SOLE SUBSTANTIVE GROUND FAILS APPLYING THE RATIO OF DECISION GIVEN BY THE CO-ORDI NATE BENCH ON THE FACTS OF THE APPELLANT, WE FIND THAT THE ISSUE IS VERBATI M SIMILAR AND THEREFORE, APPLYING THE SAME, WE ARE OF THE VIEW THAT THE AMENDED PROVISIONS OF SECTION 94(7) OF THE ACT FOR ASSESSMENT YEAR 2005-06 CANNOT BE APPLIE D FOR ASSESSMENT YEAR 2004-05 WHEN THE TRANSACTIONS WAS ENTERED INTO BY THE AP PELLANT. ACCORDINGLY, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) AND ACCORDINGLY DISMISS THE GROUND RAISED BY THE REVENUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 10. AS THE APPEAL FILED BY THE REVENUE ITSELF WAS DISMIS SED AS INDICATED ABOVE AND THE CROSS OBJECTION ARISES ONLY AS A RESULT OF THAT APPEAL, THE CROSS ITA NO. 1362/AHD/2010 & CO NO. 175/AHD/2010 ACIT VS. SHRI SHREYANS SHANTILAL SHAH AY : 2004-05 - 8 OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOU S. HENCE, THE CROSS- OBJECTION FILED BY THE ASSESSEE IS DISMISSED BEING INFRUCTU OUS. 11. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROS S-OBJECTION OF THE ASSESSEE, BOTH ARE DISMISSED ORDER PRONOUNCED IN THE COURT ON 02/05/2016 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER AHMEDABAD; DATED, / /2016 $% ! &''( )$(*'/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ++ ' ,' / CONCERNED CIT 4. ,' ) ( / THE CIT(A)- 5. (/0 &'& , , 123 /DR,ITAT, AHMEDABAD, 6. 045 6 / GUARD FILE. $% / BY ORDER, TRUE COPY +1 (ASSTT.REGISTRAR) ITAT, AHMEDABAD 1. DATE OF DICTATION 26.04.2016.. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER : 27.04.2016 3. OTHER MEMBER .. 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S . 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S . 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2/5/2016 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER