DEDHIA INVESTMENTS P.LTD, MUMBAI V. ACIT 10(3), MUMBAI

ITA 1388/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2265 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 28-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 29-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UDAYA B JAKKE
• Assessee Lawyers: C B R MURTHY
• Keywords: Business income
• Section: 6

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , , BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP GOS AIN, JUDICIAL MEMBER ./ I.T.A. NO. 314 /MUM/ 201 1 AND ITA NO.1388/MUM/2012 ( / ASSESSMENT YEAR S : 200 6 - 07 AND 2008 - 09 ) DEDHIA INVESTMENTS PVT LTD. 71, UDYOG SHETRA, 2 ND FLOOR, MULUND GOREGAON LINK ROAD, MULUND - W, MUMBAI - 40 0080 / VS. ASSTT. COMMISSIONER OF INCOME TAX, 1 0 (3), AAYAKAR BHAVAN, MUMBAI - 400020 . ./ PAN : ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN. : AAACD - 1366K / APPELL ANT BY : SHRI C B R MURTHY / RESPONDENT BY : SHRI UDAYA B JAKKE / DATE OF HEARING : 10.12. 2015 / DATE OF PRONOUNCEMENT : 10.12. 2015 O R D E R PER B.R.BASKARAN, AM : THE ASSESSEE HAS FILED THESE APPEALS CHALLENGING THE ORDER OF LD. CIT(A) - 22, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEARS 2006 - 07 AND 2008 - 09. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD. CIT(A) IN ASSESSING THE CAPITAL GAINS ARISING ON S ALE OF SHARES AS BUSINESS INCOME OF THE ASSESSEE. ITA NO .314 / MUM/ 2014 AND ITA NO.1388/M/2012 2 3. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS CARRIED OUT THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES AS ITS INVESTMENT ACTIVITY AND ACCORDINGLY DECLARED THE PROFIT /LOSS ARISING FROM SALE OF SHARES AS INCOME UNDER THE HEAD C APITAL GAINS. HOWEVER, THE AO TREATED THE ACTIVITY OF THE ASSESSEE AS TRADING ACTIVITY AND ACCORDINGLY , ASSESSED THE GAIN ARISING ON SALE OF SHA R ES AS BUSINESS INCOME. HOWEVER, THE AO HAS ASSESSED THE LOSS ON ARISING ON SALE OF S HARES AS CAPITAL GAINS. THE LD. AR SUBMITTED THAT THE AO HAS TAKE N INCONSISTENT VIEW WITH REGARD TO THE SAME SET OF TRANSACTION AND HENCE THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ORDER OF LD.CIT(A). 4. THE LD. AR SUBMITTED THAT THE ASSESSEE WOULD BE SATISFIED, IF LOSS, ARISING ON SALE OF SHARES ALSO IS ALSO TREATED AS BUSINESS LOSS AND ALLOWED SET OFF OF THE SAME AGAINST THE GAIN ARISING ON SALE OF SHARES, WHICH WAS TREATED AS BUSINESS INCOME . 5. ON THE CONTRARY, THE LD. DR SUPPORTED THE OR DER OF THE LD.CIT(A). 6. HAVING HEARD THE RIVAL CONTENTIONS, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMISSIONS OF THE ASSESSEE . I F THE ACTIVITY OF PURCHASE AND SALE OF SHARES IS TREATED AS BUSINESS ACTIVITY OF THE ASSESSEE , THEN LOSS/GAIN ARISING ON SALE OF SHARES SHOULD BE ASSESSED AS BUSINESS INCOME , MEANING THEREBY , LOSS ARISING ON SALES SHOULD BE TREA T ED AS BUSINESS LOSS IN THE SAME WAY AS THE GAIN ARISING ON SALE OF SHARES WAS TREATED AS BUSINESS GAIN . ACCORDINGLY GAIN/ LOSS A RISING ON SALE OF SHARES SHOULD BE ADJUSTED AGAINST EACH OTHER AND THE NET INCOME SHOULD BE ASSESSED UNDER THE HEAD INCOME F ROM BUSINESS. ACCORDINGLY , WE ARE NOT ABLE TO AGREE WITH THE VIEW TAKEN BY TAX AUTHORITIES. ACCORDINGLY, WE SET ASIDE THE ORDER S PASSED BY LD.CIT( A) ON THIS ISSUE IN BOTH THE YEARS AND RESTORED THE SAME ITA NO .314 / MUM/ 2014 AND ITA NO.1388/M/2012 3 TO THE FILE OF THE AO WITH A DIRECTION TO RECOMPUTED THE INCOME OF THE ASSESSEE AS DISCUSSED SUPRA. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COU RT ON 10 TH DECEMBER, 2015 SD SD ( / SANDEEP GOSAIN) ( . . / B.R.BASKARAN) /JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI ; DATED . 10 TH DEC,2015 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / D R, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI