ACIT, Circle - 7, Kolkata, Kolkata V. M/s. Transcan Securities Pvt. Ltd., Kolkata

ITA 1453/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48057 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2011
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 13-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 14-07-2010
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Assessee Lawyers: S K TULSIYAN
• Keywords: Speculation loss

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , , , , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NO . 1453/KOL/2010 %& '(/ ASSESSMENT YEAR : 2005-06 (*+ / APPELLANT ) A.C.I.T., CIRCLE-7, KOLKATA - % - - VERSUS - . (-.*+/ RESPONDENT ) TRANSCAN SECURITIES PVT. LTD., KOLKATA (PAN: AAACT 9239 M) *+ / 0 '/ FOR THE APPELLANT: SHRI H.N.SINGH -.*+ / 0 '/ FOR THE RESPONDENT: SHRI S.K.TULSIYAN '1 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ), , , , '# PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 12.05.2010 OF THE CIT(A)-VIII, KOLKATA PERTAINING TO A.YR. 2005-06. 2. THE ONLY ISSUE RAISED BY THE REVENUE IS RE LATING TO THE LOSS OF RS.39,56,116/- INCURRED BY THE ASSESSEE IN PURCHASE AND SALE OF SH ARES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE A O WHILE DOING THE SCRUTINY ASSESSMENT HAS DISALLOWED THE SAME BY OBSERVING AS UNDER :- THE ASSESSEE FURTHER SUBMITTED THAT THE LOSSES INC URRED ON ACCOUNT OF SHARE TRADING WAS DUE TO THE FACT THAT ON SOME OCCASIONS THE CLIENTS REFUSED TO TAKE DELIVERY OF THE STOCKS AND ULTIMATELY THE ASSESSEE HAD TO TAKE DELIVERY FOR SELF AND LATER SELL IT. NO OTHER EVIDENCE HAS BEEN PLACE D ON RECORD BY THE ASSESSEE. SECONDLY, EVEN IF THE TRANSACTION CAME INTO EXISTEN CE DUE TO THE FAILURE OF THE 2 CLIENT TO TAKE DELIVERY, THE MATERIAL NATURE OF THE TRANSACTION DOES NOT CHANGE. IF A PARTICULAR TRANSACTION IS CLAIMED BEING OUT OF TH E PURVIEW OF EXPLANATION TO SECTION 73, THEN IT MUST COME WITHIN ONE OF OTHER E XCLUSIONS MENTIONED IN THE SAID EXPLANATION. AS THERE IS NO AMBIGUITY OF ANY S ORT IN THE WORDINGS OF THE SAID PROVISIONS, THERE IS NO OCCASION FOR DERIVING ANY LENIENT INTERPRETATION TO THEM. IN VIEW OF THE ABOVE, THE LOSS OF RS.39,56,11 6/- IS HELD AS BEOING DEEMED SPECULATION LOSS. 3.1. ON APPEAL, THE CIT(A) HAS DELETED THE SAM E BY OBSERVING AS UNDER :- THE APPELLANT HAS ADMITTED THAT APART FORM ITS BUS INESS AS A BROKER, IT CARRIED ON BUSINESS ON ITS OWN BEHALF ALSO. THE RESULTS OF THESE OPERATIONS ARE ALSO SEGREGATED. THE FIGURES ARE NOT IN DISPUTE. THE ONL Y ISSUE IS WHETHER THE LOSS CLAIMED BY THE APPELLANT HAS ENTERED INTO ON ITS OW N BEHALF WOULD BE COVERED BY EXPLANATION TO SEC.73 OF THE INCOME TAX ACT. FOR THE TRANSACTIONS ENTERED INTO ON BEHALF OF CLIENTS, I DO NOT FIND THE SAID E XPLANATION APPLICABLE IN THE APPELLANTS CASE, AS THE DISCUSSION ABOVE SHOWS. TH E A.O. IS THEREFORE DIRECTED TO TREAT THE LOSS INCURRED IN THE BROKERAGE BUSINES S AS BUSINESS LOSS, ELIGIBLE FOR SET OFF AGAINST THE BROKERAGE INCOME OF THE APPELLA NT. THIS GROUND OF APPEAL IS ALLOWED. 3.2. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING, THE LD. DR APPEARIN G ON BEHALF OF THE REVENUE BY REFERRING TO THE ASSESSMENT ORDER CONTENTED THAT TH E ASSESSEE HAS NOT FILED ANY OTHER EVIDENCES BEFORE THE AO IN ORDER TO SUBSTANTIATE T HE CONTENTION OF THE ASSESEE THAT ON SOME OCCASIONS THE CLIENT REFUSED TO TAKE DELIVERY OF THE STOCKS AND ULTIMATELY THE ASSESSEE HAD TO TAKE DELIVERY FOR SELF AND THUS INC URRED LOSSES. HE FURTHER POINTED OUT THAT THE LD. CIT(A) WITHOUT ASSIGNING ANY REASONS S IMPLY BELIEVED THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE HAS CARRIED OUT BUSI NESS ON ITS OWN ON BEHALF OF THE CLIENTS ALSO AND EXPRESSED HIS OPINION THAT EXPLANA TION TO SECTION 73 OF THE IT ACT IS NOT APPLICABLE TO THE ASSESSEES CASE. THEREFORE, H E REQUESTED TO SET ASIDE THE ORDERS OF THE LD. CIT(A) AND RESTORE THE ORDER OF THE AO. 5. ON THE OTHER HAND, THE LD. COUNSEL APPEAR ING ON BEHALF OF THE ASSESSEE STRONGLY RELIED ON THE ORDERS OF THE LD. CIT(A) AND REQUESTE D TO UPHOLD THE SAME. 6. HAVING HEARD THE RIVAL SUBMISSIONS AND ON P ERUSAL OF MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED THAT THE ASSESSEE HAS NOT FI LED ANY SUBSTANTIVE DOCUMENTS ON THE 3 BASIS OF WHICH THE LD. CIT(A) HAS GIVEN RELIEF TO T HE ASSESSEE AND IT IS FURTHER OBSERVED ON RECORD THAT THE ASSESSEE HAS NOT FILED ANY OTHE R EVIDENCES BEFORE THE AO IN ORDER TO SUBSTANTIATE THE CONTENTION OF THE ASSESSEE THAT ON SOME OCCASIONS THE CLIENT REFUSED TO TAKE DELIVERY OF THE STOCKS AND ULTIMATELY THE A SSESSEE HAD TO TAKE DELIVERY FOR SELF AND THUS INCURRED LOSSES. KEEPING IN VIEW OF THE FA CT THAT WE CONSIDER IT FIT TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO FOR FRESH CONSIDERATION AS PER LAW AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. THE ASSESSEE IS ALSO AT LIBERTY TO FILE THE ADDITIONAL DOCUMENTARY EVIDENCES AS CALLED FOR BY THE AO. 7. IN THE RESULT THE APPEAL OF THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13.04.2011. SD/- SD/- MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , ,, , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 13.04.2011 '1 / -2 3'2'4- COPY OF THE ORDER FORWARDED TO: 1. TRANSCAN SECURITIES PVT. LTD., 3A, AUCKLAND PLACE, KOLKATA-17. 2 THE ACIT, CIRCLE-7, KOLKATA 3. THE CIT, 4. THE CIT(A)-VIII, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA .2 -/ TRUE COPY, '1%9/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.)