M/s Hero Investment Pvt. Ltd. (Now merged into M/s Hero MotoCorp Ltd.), Ludhiana V. ACIT, C-5, Ludhiana

ITA 1450/CHANDI/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8818 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDARSHAN JCIT
• Assessee Lawyers: SUBHASH AGGARWAL
• Keywords: Business income; Opportunity of being heard; Set aside
• Section: 143(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH A, CHANDIGARH (VIRTUAL COURT) .., !' '# $, % &' BEFORE: SHRI. N.K.SAINI, VP & SHRI , SANJAY GARG, J M ./ ITA NO. 1450/CHD/2017 / ASSESSMENT YEAR : 2009-10 M/S HERO INVESTMENT PVT. LTD. (NOW MERGED INTO M/S. HERO MOTO CORP LTD.) HERO NAGAR, G.T. ROAD, LUDHIANA ASSTT. CIT CIRCLE-V, LUDHIANA ./ PAN NO: AAACH4072N / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI SUBHASH AGGARWAL, ADVOCATE # ! ' / REVENUE BY : SHRI ARVIND SUDARSHAN, JCIT $ % ! &/ DATE OF HEARING : 27/07/2020 '()* ! &/ DATE OF PRONOUNCEMENT : 27/07/2020 &(/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT . 17/08/2017 OF LD. CIT(A)-2, LUDHIANA. 2. FOLLOWING GROUNDS HAS BEEN RAISED IN THIS APPEAL: 1. THAT THE LD. CIT(A)-2 HAS ERRED IN HOLDING THAT THE ASS ESSEE IS A TRADER IN MUTUAL FUNDS AND HAS WRONGLY TREATED THE LONG TERM CAPIT AL LOSS OF RS. 4,71,23,732/- AS BUSINESS LOSS OF THE APPELLANT. 2. THAT THE LD. CIT(A) HAS WRONGLY PLACED RELIANCE ON THE JUDGMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IGNORING THE FACT T HAT THE DECISION WAS TO BE TAKEN ON THE BASIS OF THE CIRCULAR OF CBDT NO. 4/2007 DATED 15/06/2007 GIVING GUIDELINES FOR DISTINCTION BETWEEN TR EATMENT OF INVESTMENT EITHER AS A BUSINESS INCOME OR CAPITAL GAIN AND SUBSEQUENTLY CLARIFIED BY CIRCULAR NO. 6/2016 DATED 29/02/2016 W HICH WAS ISSUED WITH THE SOLE OBJECTIVE OF REDUCING LITIGATION AND MAINTAINI NG CONSISTENCY IN 2 APPROACH ON THE ISSUE OF TREATMENT OF INCOME DERIVED F ROM TRANSFER OF SHARES AND SECURITIES. 3. THAT IN ANY CASE THE CIT(A) WAS WRONG IN NOT FOLLOWING THE CIRCULAR WHICH IS BINDING ON THE REVENUE AUTHORITY. 4. THAT THE APPELLANT CRAVES LEAVE FOR PERMISSION TO AD D, AMEND OR ALTER ANY GROUND OF APPEAL AT THE TIME OF HEARING. 3. FROM THE AFORESAID GROUNDS IT WOULD BE CLEAR THAT ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE TREATMENT OF LOSS AMOUNTING TO RS. 4,71, 23,732/- I.E; AS TO WHETHER THE SAID LOSS WAS BUSINESS LOSS OR THE LONG TERM CAPITAL LOSS (LTCL). 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE CO MPANY WAS AN INVESTMENT COMPANY AND EARNED ITS INCOME FROM INVESTMENT IN SHARES AND SECURITIES. THE RETURN OF INCOME WAS FILED ON 27/09/2009 DECLARING AN INCOME OF RS. 56,08,454 WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). WHILE FILING ITS RETURN OF INCOME THE ASSESSEE COMPANY CLAIMED LONG TERM CAPITAL LOSS OF RS. 4,71,23,732/- FOR THE YEAR UNDER CONSIDERATION. HOWEVER, THE A.O. TREATED THE SAID LOSS AS BUSINESS LOSS. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO UPHELD THE VIEW TAKEN BY THE A.O. 6. NOW THE ASSESSEE IS IN APPEAL. 7. LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STA TED THAT THE DECISION RELATING TO THE NATURE OF LOSS WAS TO BE TAKEN BY CONSIDERING CIRCU LAR NO. 4/2007 DT. 15/06/2007 AND THE CIRCULAR NO. 6/2016 DT. 29/02/2016 ISSUED BY CBDT. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) WAS WRONG IN NOT FOLLOWING THE CIRCULARS WHICH WERE BINDING ON THE REVENUE. RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON' BLE SUPREME COURT IN THE CASE OF UCO BANK VS. CIT REPORTED AT 237 ITR 889. IT WAS ALSO SUBMITTED THAT FOR THE A.Y. 2008-09 THE LD. CIT(A)HAS CONSIDERED THE AFORESAID CIRC ULAR AND ALLOWED THE RELIEF TO THE ASSESSEE. HE REQUESTED THAT THE MATTER MAY BE RES TORED BACK TO THE FILE OF THE LD. CIT(A) TO BE DECIDED AFTER CONSIDERING THE AFORESAID R EFERRED TO CIRCULARS ISSUED BY THE CBDT. 3 8. IN HIS RIVAL SUBMISSIONS THE LD. SR. DR ALTHOUGH SU PPORTED THE ORDERS OF THE AUTHORITIES BELOW AND REITERATED THE OBSERVATIONS MAD E BY THE LD. CIT(A) IN THE IMPUGNED ORDER, HOWEVER DID NOT OBJECT IF THE MATTER BE RESTORED TO THE FILE OF THE LD. CIT(A). 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIE S AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE I T APPEARS THAT THE LD. CIT(A) WHILE DECIDING THE ISSUE AGITATED BY THE ASSESSEE DID NOT C ONSIDER THE AFORESAID CIRCULARS NO. 4/2007 DT. 15/06/2007 AND 6/2016 DT. 29/02/2016 ISSU ED BY THE CBDT. IT IS ALSO NOT CLEAR HOW AND IN WHICH CIRCUMSTANCES THE LD. CIT(A) DECIDED THE SIMILAR ISSUE FOR THE A.Y. 2008-09 IN ASSESSEES FAVOUR (AS CLAIMED BY THE LD. C OUNSEL FOR THE ASSESSEE DURING THE COURSE OF HEARING). WE THEREFORE BY CONSIDERING THE TOT ALITY OF THE FACTS AS DISCUSSED HEREINABOVE AND IN THE ABSENCE OF THE CLEAR FACTS ON REC ORD, DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO THE FILE OF THE LD. CI T(A) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABL E OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. (ORDER PRONOUNCED ON 27/07/2020 ) SD/- SD/- '# $ .., (SANJAY GARG ) ( N.K. SAI NI) % &'/ JUDICIAL MEMBER / VICE PRESIDENT AG DATE: 27/07/2020 (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ / / CIT 4. $ / ()/ THE CIT(A) 5. -23 4, & 4, 67839/ DR, ITAT, CHANDIGARH 6. 38 :%/ GUARD FILE