SRIRAM KAPUR, MUMBAI V. DCIT RG 12(3), MUMBAI

ITA 1412/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3074 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 01-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 01-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G N MAKWANA
• Keywords: Business income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BE NCH, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER / I .T.A. NO. 8952/MUM/2010 / I .T.A. NO. 1412 /MUM/2012 / I .T.A. NO. 1413 /MUM/2012 ( / ASSESSMENT YEARS: 2006-07 & 2008-09 SRIRAM KAPUR, 5, JAMSHEDJI TATA ROAD, CHURCHGATE, MUMBAI-400 020 / VS. THE ACIT, RANGE 12(3), 1 ST FLOOR, AAYAKAR BHAVAN, MUMBAI-400 020 ./ ./ PAN/GIR NO. :AAIPK 3526B ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI MADHUR AGARWAL / RESPONDENT BY: SHRI G.N. MAKWANA / DATE OF HEARING : 07.10.2015 ! / DATE OF PRONOUNCEMENT :16.10.2015 '# / O R D E R PER N.K. BILLAIYA, AM: THESE ARE APPEALS BY THE ASSESSEE PREFERRED AGAINST THREE SEPARATE ORDERS OF THE LD. CIT(A)-23, MUMBAI PERTAI NING TO ASSESSMENT YEARS 2006-07 & 2008-09. REPRESENTATIV ES OF BOTH SIDES AGREED THAT COMMON ISSUES ARE INVOLVED IN THE CAPTIONED APPEALS, THEREFORE THEY WERE HEARD TOGETHER AND DIS POSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA. NOS.8952/M/2010 ITA NO. 1412 & 1413/M/12 2 ITA NO. 8952/M/2010 A.Y. 2006-07 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO TH E TREATMENT OF RS. 45,38,043/- AS INCOME FROM BUSINESS INSTEAD OF CAPITAL GAINS DECLARED BY THE ASSESSEE. 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSE SSEE BROUGHT TO OUR NOTICE THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR ASSESSMENT YEARS 2005-06 AND 2007-08 IN ITA JNOS. 2 412/M/2009 AND 4534/M/2011. IT IS THE SAY OF THE LD. COUNSEL THAT ON IDENTICAL SET OF FACTS, THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE LD. COUNSEL SUPPLIED THE COPY OF THE ORDER OF THE TRIBUNAL. 4. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BRING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE. 5. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW QUA THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA). WE FIND FORCE IN THE CONTENTION OF T HE LD. COUNSEL. WHILE DISMISSING THE APPEAL OF THE ASSESSEE, THE LD . CIT(A) HAS FOLLOWED THE ORDER OF HIS PREDECESSOR FOR A.Y. 2005 -06. THE ORDER OF THE LD. CIT(A) FOR A.Y. 2005-06 HAS BEEN SET ASIDE BY THE TRIBUNAL IN IT NO. 2412/M/2009 WHEREIN THE TRIBUNAL AT PARA-7 CONCLUDED BY HOLDING THAT THUS ON THE FACTS AND CIRCUMSTANCES OF THE ASSES SEES CASE, WE HOLD THAT THE GAIN FROM TRANSACTION OF SHA RES BY THE ASSESSEE IS TO BE ASSESSED UNDER THE HEAD CAPITAL GAINS AND NOT AS BUSINESS INCOME. ACCORDINGLY, THE ORDER OF THE CIT(A) IS S ET ASIDE AND THE GROUND RAISED BY THE ASSESSEE IS TREATED AS ALLOWED . ITA. NOS.8952/M/2010 ITA NO. 1412 & 1413/M/12 3 RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO TREAT INCOME UNDER THE HEAD CAPITAL GAINS. GROUND RAI SED BY THE ASSESSEE IN ITA NO. 8952/M/2010 IS ALLOWED. 6. ITA NO. 1412/M/2012- A.Y. 2006-07 IS AGAINST THE LEVY OF PENALTY U/S. 271B OF THE ACT. THE PENALTY HAS BEEN LEVIED BECAUSE THE AO HAS TREATED THE GAINS FROM SHARE AS BUSINESS INC OME OF THE ASSESSEE AND SINCE THE TURNOVER EXCEEDED RS. 40,00, 000/- AND SINCE THE ASSESSEE HAS NOT GOT HIS ACCOUNT AUDITED AS PER PROVISIONS OF SEC. 44AB OF THE ACT, THE AO LEVIED PENALTY OF RS. 1,00, 000/- U/S. 271B OF THE ACT. THE LD. CIT(A) CONFIRMED THE PENALTY. 7. AGGRIEVED BY WHICH THE ASSESSEE IS BEFORE US. 8. IN ITA NO. 8952/M/10 (SUPRA) WE HAVE DECIDED THE ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE A ND DIRECTED THE AO TO TREAT THE INCOME UNDER THE HEAD CAPITAL GAIN S THUS HOLDING THAT THE ASSESSEE IS NOT A TRADER IN SHARES SINCE T HE VERY FOUNDATION OF LEVY OF PENALTY U/S. 271B OF THE ACT HAS BEEN REMOV ED BY US. WE DO NOT FIND ANY REASON FOR SUCH LEVY. WE DIRECT THE A O TO DELETE THE PENALTY SO LEVIED. GROUND RAISED BY THE ASSESSEE IN ITA NO. 1412/M/2012 IS ALLOWED. ITA NO. 1413/M/2012 A.Y. 2008-09 9. GROUND NO. 1 IS OF GENERAL IN NATURE AND NEEDS N O SEPARATE ADJUDICATION. ITA. NOS.8952/M/2010 ITA NO. 1412 & 1413/M/12 4 10. GROUND NO. 2 RELATES TO THE DISALLOWANCE OF SAL ARY PAID AMOUNTING TO RS. 77,255/-. 10.1. THE AO DISALLOWED THE SALARY PAID TO THE DRIV ER AND ADDED THE SAME TO THE INCOME FROM BUSINESS WHICH WAS CONFIRME D BY THE LD. CIT(A). 10.2. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE D REW OUR ATTENTION TO THE ASSESSMENT ORDER QUA THE COMPUTATION OF INCO ME AND POINTED OUT THAT THE DRIVERS SALARY WAS CLAIMED UNDER THE HEAD INCOME FROM OTHER SOURCES AND THE ASSESSEE HAS NOT SHOWN ANY I NCOME UNDER THE HEAD BUSINESS INCOME. THE LD. COUNSEL FURTHER P OINTED OUT THAT THE COMPUTATION OF INCOME FROM OTHER SOURCES HAS BEEN A CCEPTED BY THE AO BUT SALARY PAID TO THE DRIVER HAS BEEN ADDED TO THE BUSINESS INCOME FOR NO REASON. 11. WE HAVE GONE THROUGH THE ASSESSMENT ORDER. WE HAVE ALSO CAREFULLY PERUSED THE COMPUTATION OF INCOME. WE FI ND THAT UNDER THE HEAD INCOME FROM OTHER SOURCES, THE ASSESSEE HAS SH OWN NET INCOME AT RS. 17,28,139/-. IN THE ASSESSMENT ORDER AT PAG E-1, THE AO HAS ALSO COMPUTED THE INCOME FROM OTHER SOURCES AT RS. 17,28 ,139/-. HOWEVER, THE AO HAS ADDED BACK DRIVERS SALARY UNDE R THE HEAD INCOME FROM BUSINESS. WE DO NOT FIND ANY LOGIC N OR ANY JUSTIFICATION FOR SUCH DISALLOWANCES. SINCE ALL OTHER EXPENSES C LAIMED UNDER THE HEAD INCOME FROM OTHER SOURCES HAVE BEEN ALLOWED BY THE AO, WE DO NOT FIND ANY REASON FOR THE DISALLOWANCE OF RS. 77, 255/-. WE ACCORDINGLY DIRECT THE AO TO DELETE THE ADDITION. ITA. NOS.8952/M/2010 ITA NO. 1412 & 1413/M/12 5 12. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER, 2015 SD/- SD/- (SANJAY GARG ) (N.K. BILLAIYA) $% ' /JUDICIAL MEMBER ' / ACCOUNTANT MEMBER & ' MUMBAI; (' DATED : 16 TH OCTOBER, 2015 . % . ./ RJ , SR. PS !' #' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+, %%-. , -.! , & ' / DR, ITAT, MUMBAI 6. ,/0 1 / GUARD FILE. $ / BY ORDER, * % //TRUE COPY// % / $& ' (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI