ITO 19(3), MUMBAI V. SHRENIK NALIN ZAVERI, MUMBAI

ITA 142/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3029 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 08-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI . . , , !' #$, % , & BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.142/MUM/2015 ( %' ( / ASSESSMENT YEAR: 2011-12) ASSTT. COMMISSIONER OF INCOME TAX 19(3) MATRU MANDIR, TARDEO ROAD, MUMBAI - 400007 ' / VS. SHRI SHRENIK NALIN ZAVERI 54, DREAMLAND BLDG., 5 TH FLOOR, M.P.ROAD, OPERA HOUSE, MUMBAI - 400004 ./ ./ PAN/GIR NO. : AAAPZ1721B ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 17.08.2016 !' /DATE OF PRONOUNCEMENT:21.09.2016 #$ / O R D E R PER AMARJIT SINGH, JM: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 27.10.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 27, ASSESSEE BY: SHRI VIJAY R. ASHAR DEPARTMENT BY: SHRI PRADEEP KUMAR SINGH ITA NO.142/M/2015 A.Y. 2011-12 2 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y.2011-12. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN TREATING SALE OF SH ARES AS SHORT TERM AND LONG TERM CAPITAL GAIN AS AGAINST INCOME FROM BUSINESS ASSESSED BY THE ASSESSING OFFICER? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN NOT TAKING COGNIZANCE OF HON. B OMBAY HIGH COURT IN THE CASE OF CIT V/S. GOPAL PUROHIT; 3 36 ITR 287 (BOM) WHICH CLARIFIES THAT, A FINDING OF FACT HAS BEEN ARRIVED AT BY TRIBUNAL AS REGARDS THE EXISTENCE OF TWO DISTINCT TYPES OF TRAN SACTIONS NAMELY, THOSE BY WAY OF INVESTMENT ON ONE HAND AND THOSE FOR THE PURPOSES OF BUSINESS ON THE OTHER HAND. UN LIKE IN THE PRESENT CASE WHEREIN ASSESSEE HAS NOT MAINTAINE D SEPARATE BOOKS OF ACCOUNTS? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN RELAYING ON THE DECISION IN THE CAS E OF RADHA BIRJU PATEL AS THE FACTS IN THOSE CASES ARE D IFFERENT FROM THE CASE OF ASSESSEE. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN NOT FOLLOWING THE DECISION OF THE H ONBLE ITAT, DELHI IN THE CASE OF M/S. RADIAL INTERNATIONA L (ITA NO.1368/DEL/2010) WHICH IS SQUARELY APPLICABLE TO T HIS CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED HIS RETURN OF INCOME ON 18.08.2010 DECLARING TOTAL INCOME TO T HE TUNE OF RS.23,02,893/-. THE RETURN OF INCOME WAS PROCESSED U/S.143(1) OF THE ITA NO.142/M/2015 A.Y. 2011-12 3 INCOME TAX ACT, 1961 ( IN SHORT THE ACT). THE CA SE WAS SELECTED MANUALLY FOR SCRUTINY AND STATUTORY NOTICE U/S.143( 2) DATED 25.09.2012 WAS ISSUED AND SERVED UPON THE ASSESSEE. FURTHER, NOTICE U/S.142(1) DATED 18.07.2013 AND 23.09.2013 ALONG WITH QUESTION NAIRE WAS ISSUED AND SERVED UPON THE ASSESSEE. DURING THE YEAR, THE ASSESSEE DECLARED THE INCOME FROM HOUSE PROPERTY, INCOME FROM BUSINES S, INCOME FROM CAPITAL GAINS AND INCOME FROM OTHER SOURCES. ASSE SSEE CLAIMED SHORT TERM CAPITAL GAINS TO THE TUNE OF RS.91,01,353/-. ASSESSING OFFICER WAS NOT SATISFIED BEING THE ASSESSEE EARNED THE SHO RT TERM CAPITAL GAIN TO THE TUNE OF RS.91,01,353/- BY UTILIZING THE BORROWED FUNDS. THEREFORE THE SAID INCOME WAS TREATED AS INCOME FRO M BUSINESS. THE CLAIM OF SET OFF BROUGHT FORWARD SHORT TERM CAPITAL LOSS TO THE TUNE OF RS.81,96,338/- HAS ALSO BEEN DECLINED. SINCE TH E ASSESSEE WAS NOT SATISFIED WITH THE SAID ASSESSMENT, THEREFORE, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A) TREATED THE INCOME FROM SHARE AS SHORT TERM CAPITAL GAIN AND ALSO SET OFF T HE LONG TERM CAPITAL LOSS, THEREFORE FEELING AGGRIEVED THE REVEN UE HAS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO.1 TO 4:- 4. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECOR D. IN ALL THESE ISSUED THE ONLY POINT WHICH HAS BEEN RAISED BY THE REVENUE IS THAT THE CIT(A) HAS WRONGLY TREATED THE INCOME FROM THE SHAR ES OF THE ITA NO.142/M/2015 A.Y. 2011-12 4 ASSESSEE AS SHORT TERM CAPITAL GAIN AND ALSO WRONGL Y SET OFF THE CLAIM OF SHORT TERM CAPITAL LOSS / LONG TERM CAPITA L LOSS. ASSESSING OFFICER DECIDED THIS ISSUE IN FAVOUR OF T HE REVENUE IN VIEW OF THE FACT THAT THE ASSESSMENT FOR THE YEAR OF 200 8-09 TO 2010-11 WERE COMPLETED U/S.143(3) OF THE ACT HOLDING THE IN COME FROM SHORT TERM CAPITAL GAIN AS BUSINESS INCOME. AFTER FILING AN APPEAL BEFORE THE CIT(A), THE CIT(A) HAS DECIDED THIS ISSUE IN FA VOUR OF THE ASSESSEE BY HOLDING THE INCOME FROM SHARES AS INCOM E FROM SHORT TERM CAPITAL GAIN AND ALSO SET OFF THE CLAIM OF THE ASSESSEE IN CONNECTION WITH THE SHORT TERM CAPITAL LOSS / LONG TERM CAPITAL LOSS. IN THE INSTANT CASE ALSO, THE CIT(A) HAS REL IED UPON THE ASSESSEES OWN CASE FOR THE A.Y.2008-09 TO 2010-11 IN APPEALS NOS. CIT(A)27/DCIT/16(3)/68/10-11 AND CIT(A)/27/ACIT 16( 3)/7/13-14 VIDE ORDERS DATED 29.11.2011 AND 07.02.2014 AND DEC IDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING THE INCOME FROM S HARES AS SHORT TERM CAPITAL GAIN BY RELAYING UPON THE SAID ORDER P ASSED BY THE CIT(A). THE ASSESSING OFFICER ACCEPTED THE CLAIM OF THE APPELLANT OF CAPITAL GAIN ON SALE OF SHARE IN THE ASSESSEES OWN CASE FOR THE A.Y.2007-08, 2008-09 AND 2009-10. NO DISTINGUISHAB LE FACTS HAVE BEEN PLACED ON RECORD BY THE REVENUE TO WHICH IT CA N BE ASSUMED THAT THE CIT(A) HAS PASSED THE ORDER WRONGLY AND ILLEGAL LY. EVEN IN THE OWN CASE OF ASSESSEE FOR THE A.Y.2008-09 AND 2010-1 1, THE HONBLE INCOME TAX APPELLATE TRIBUNAL, MUMBAI HAS UPHOLD TH E FINDING OF THE CIT(A) BY VIRTUE OF ORDER DATED 31.03.2015 IN I TA NO.1138/M/12 ITA NO.142/M/2015 A.Y. 2011-12 5 AND BY VIRTUE OF ORDER DATED 04.12.2015 IN ITA NO.3 344/M/14 AND HELD THAT THE INCOME OF THE ASSESSEE IS THE INCOME FROM LONG TERM CAPITAL GAIN. HONORING THE DECISION OF THE CO-ORDI NATE BENCH AND IN VIEW OF THE SPECIFIC FACTS AND CIRCUMSTANCES OF THE CASE WHICH SPEAKS NO CHANGE WE ARE OF THE VIEW THAT THE CIT(A) HAS PA SSED THE ORDER JUDICIOUSLY AND CORRECTLY WHICH DOES NOT REQUIRE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. THEREFORE THESE ISSUES ARE D ECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER , 2016. SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 21 ST SEPTEMBER, 2016 MP MP MP MP * +%'#, -,(' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ' / BY ORDER, - & //TRUE COPY// ./$ ! /(DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI