M/s.Dewa Projects (P) Ltd, Trivandrum V. The ACIT, Ernakulam

ITA 151/COCH/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4411 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 01-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SWAPNA NANU AMBAT ADCIT
• Assessee Lawyers: T M SREEDHARAN; VANDANA MENON
• Keywords: Capital asset; Business income; Transactions in derivatives; Earning of tax free income; Speculation loss; Capital receipt
• Section: 143(3); 14A; 43(5); 12; 28

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., JM I.T.A. NOS. 150 & 151/COCH/2014 ASSESSMENT YEAR : 2007 - 08 M/S. DEWA PROJECTS (P) LTD., T.C. NO. 251/1497, S.S. KOVIL ROAD, THAMPANOOR P.O., TRIVANDRUM-1 [PAN: AACCD 1622N] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), KOCHI. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) I.T.A. NO.219/COCH/2014 ASSESSMENT YEAR : 2007 - 08 THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), KOCHI. VS. M/S. DEWA PROJECTS (P) LTD., T.C. NO. 251/1497, S.S. KOVIL ROAD, THAMPANOOR P.O., TRIVANDRUM-1 (REVENUE - APPELLANT) (ASSESSEE - RESPONDENT) A SSESSEE BY SHRI T.M. SREEDHARAN, SR. ADV. & SMT. VANDANA MENON, ADV. REVENUE BY S MT. SWAPNA NANU AMBAT, ADCIT D ATE OF HEARING 13 / 0 3 /2018 DATE OF PRONOUNCEMENT 19 / 0 3 /2018 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THE FIRST APPEAL IN ITA NO. 150/COCH/2014 FILED BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF THE CIT(A) DATED 18/12/2013 WHICH I N TURN IS EMANATING FROM THE I.T.A. NO.150, 151 & 219/C/2014 2 ASSESSMENT ORDER PASSED U/S. 143(3) OF THE I.T. ACT . THE APPEALS IN ITA NOS. 151 & 219/COCH/2014 ARE CROSS APPEALS WHICH ARE EMA NATING FROM THE ORDER OF THE CIT(A) DATED 18/12/2013 WHICH IS TURN ARE EMANA TING FROM THE ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S. 147 OF THE I.T. ACT . ITA NO. 150/COCH/2014 2. THE FIRST GROUND IN ASSESSEES APPEAL IN I.T.A. NO. 150/COCH/2014 IS WITH REGARD TO THE DISALLOWANCE MADE U/S. 40(A)(IA) OF T HE ACT AMOUNTING TO RS.5,40,500/-. THIS GROUND WAS NOT PRESSED BY THE L D. AR AND ACCORDINGLY IS DISMISSED AS NOT PRESSED. 3. THE NEXT GROUND IS WITH REGARD TO REJECTION OF LOSS OF RS.8.03 CRORES BY TREATING THE SAME AS SPECULATIVE LOSS. 4. THE FACTS OF THIS CASE ARE THAT THE ASSESSEE IS A PROPERTY DEVELOPER. THE ASSESSEE WAS ALSO DEALING IN HUGE VOLUME OF SPECULA TIVE SHARE TRANSACTION AMOUNTING TO RS.199028.81 LAKHS OUT OF THE TOTAL SH ARE TRANSACTION AMOUNTING TO RS. 202816.73 LAKHS. THE ASSESSEE HAS NETTED OFF T HE LOSS OF 803.03 LAKHS WITH THE OTHER BUSINESS INCOME OF THE ASSESSEE. THE ASS ESSING OFFICER TREATED THE LOSS OF RS. 803.03 LAKHS AS SPECULATIVE LOSS AND DI SALLOWED BY SETTING OFF AGAINST THE BUSINESS INCOME OF THE ASSESSEE. I.T.A. NO.150, 151 & 219/C/2014 3 5. AGAINST THIS, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFF ICER. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSE SSEE IS IN APPEAL BEFORE US. THE LD. AR SUBMITTED THAT THE SUM OF RS.8,03,03,000 /- CONSISTS OF LOSS FROM FUTURES AND OPTIONS AMOUNTING TO RS.519.82 LAKHS AN D LOSS FROM CASH MARKET TRANSACTION AMOUNTING TO RS.283.21 LAKHS. THE LD. A R SUBMITTED THAT THE BREAK UP OF THE TRANSACTION SHOWED THAT THE LOSS FROM DEA LING IN DERIVATIVES AMOUNTING TO RS.592.82 IS NOT SPECULATIVE LOSS IN VIEW OF THE SPECIAL PROVISION CONTAINED IN SECTION 43(5)(D) OF THE ACT. SECTION 43(5) DEFINES SPECULATIVE TRANSACTION AS A TRANSACTION IN WHICH A CONTRACT FOR THE PURCHASE AN D SALE OF ANY COMMODITY INCLUDING STOCKS AND SHARES IS PERIODICALLY OR ULTI MATELY SETTLED OTHERWISE THAN BY THE ACTUAL DELIVERY OR TRANSFER OF THE COMMODITY OR SCRIPS. ACCORDING TO THE LD. AR FOR THE PURPOSE OF THE ABOVE CLAUSE AS PER CLAUS E (D) OF THE PROVISO, AN ELIGIBLE TRANSACTION IN RESPECT OF TRADE IN DERIVAT IVES REFERRED TO IN CLAUSE (AC) OF SECTION 2 OF THE SECURITIES CONTRACTS (REGULATION) ACT, 1956 CARRIED OUT IN A RECOGNIZED STOCK EXCHANGE SHALL NOT BE DEEMED TO BE A SPECULATIVE TRANSACTION. IN THIS CONNECTION, IT WAS ALSO SUBMITTED THAT AS P ER SECTION 29 OF THE ACT, INCOME FROM PROFITS AND GAINS OF BUSINESS, PROFESSI ON, AS PER SECTION 28, SHALL BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS CONTAINE D IN SECTION 30 TO 43D. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER TRE ATED THE ENTIRE TRANSACTION AS SPECULATIVE TRANSACTION WITHOUT MAKING ANY DISTINCT ION BETWEEN TRANSACTION IN DERIVATIVES AND CASH TRANSACTIONS. THE ASSESSING OF FICER HELD THAT THE WHOLE I.T.A. NO.150, 151 & 219/C/2014 4 SHARE TRANSACTION BUSINESS RESULTED IN A LOSS OF RS .8,03,03,000/- WITH OTHER INCOME OF THE ASSESSEE AND SPECULATIVE TRANSACTIONS IN THE CASE OF THE ASSESSEE, IF PART OF THE BUSINESS CONSISTED OF DEALING IN SHA RES, THEN ALL THE DERIVATIVES WHETHER DELIVERY BASED OR NON-DELIVERY BASED WOULD BE TREATED AS SPECULATIVE LOSS. 6.1 REFERRING TO SECTION 43 OF THE ACT, THE LD. A R SUBMITTED THAT CERTAIN TERMS IN RESPECT OF COMPUTATION OF INCOME FOR THE PURPOSE OF SECTION 28 TO 43D OF THE ACT ARE DEFINED. IT WAS SUBMITTED THAT SECTION 43( 5)(D) IS A SPECIAL PROVISION WHICH IS TO BE CONSIDERED WHILE COMPUTING BUSINESS INCOME AS PER SECTION 29 OF THE ACT. THE LD. AR SUBMITTED THAT SECTION 43(5)(D ) SPECIFICALLY DEFINES SPECULATIVE TRANSACTION FOR THE PURPOSE OF COMPUTAT ION OF BUSINESS INCOME WHEREAS SECTION 73 REFERS TO SET OFF AND CARRY FORW ARD AND LOSS AND THESE PROVISIONS OPERATE IN DIFFERENT FIELDS. FURTHER IT WAS SUBMITTED THAT SUB-SEC (5) OF SEC. 43 REFERS TO AN ELIGIBLE TRANSACTION IN RES PECT OF TRADING AND DERIVATIVES REFERRED TO IN CLAUSE(AC) OF SECTION 2 OF SECURITIE S CONTRACTS (REGULATION) ACT, 1956 CARRIED IN RECOGNIZED STOCK EXCHANGES AND ELIG IBLE TRANSACTION IS DEFINED IN EXPLANATION 1A. 6.2 ACCORDING TO THE LD. AR AN OPTION IS A TYPE O F DERIVATIVE INSTRUMENT WHEREBY A PERSON GETS RIGHT TO BUY OR SELL AT AN AG REED AMOUNT AN UNDERLYING ASSET ON OR BEFORE THE SPECIFIED FUTURE DATE. IT W AS SUBMITTED THAT FUTURES AND I.T.A. NO.150, 151 & 219/C/2014 5 OPTIONS ARE BOTH STANDARDIZED DERIVATIVE INSTRUMEN TS TRADED ON A STOCK EXCHANGE. FUTURES AND OPTIONS ARE ALSO DERIVATIVES, I.E., THE INSTRUMENT WHOSE VALUE DEPENDS ON AN UNDERLYING SOURCE OR ASSET. 6.3 THE LD. AR RELIED ON THE DECISION OF THE ITAT , C BENCH, CHENNAI IN THE CASE OF DCIT VS. AISWARYA & CO. PVT. LTD. WHEREIN I T WAS HELD THAT EXPLANATION TO SEC. 73 CANNOT APPLY TO DERIVATIVES BUT ONLY TO PUR CHASE AND SALE OF SIMPLICITOR. MOREOVER, A SPECULATIVE TRANSACTION AS PER SEC. 43( 5) MEANS A TRANSACTION IN WHICH THE CONTRACT FOR THE PURCHASE AND SALE OF ANY COMMODITY, INCLUDING STOCKS, SHARES IS PERIODICALLY OR ULTIMATELY SETTLED., OTHE RWISE THAN BY WAY OF ACTUAL DELIVERY OF TRANSFER OF COMMODITY OR SCRIPS. THE T RIBUNAL ALSO RELIED ON THE FOLLOWING DECISIONS TO HOLD THAT THE TRANSACTIONS I N DERIVATIVES ARE TREATED AS REGULAR BUSINESS TRANSACTIONS AND NOT SPECULATIVE T RANSACTIONS: (I) M/S. SHREE CAPITAL SERVICES LTD. VS. ACIT (124 TTJ 740) (KO.) (SB) (II) DCIT VS. MADANLAL LTD. (51 SOT 188 (KOL.) (URO ). (III) DCIT VS. M/S. PATERSON SECURITIES (P) LTD. (1 27 ITD 386)(CHE.) IV) DCIT VS. M/S. SSKI INVESTORS SERVICES (P) LTD. (113 TTJ 511) (MUM.) (V) M/S. RBK SECURITIES (P) LTD. VS. ITO (118 TTJ 4 65)(MUM). 6.4 THE LD. AR SUBMITTED THAT THE TRIBUNAL ALSO HE LD THAT WHERE TWO VIEWS ARE POSSIBLE ON A POINT OF DECISION, THE ONE IN FAVOUR OF THE ASSESSEE SHOULD BE I.T.A. NO.150, 151 & 219/C/2014 6 FOLLOWED. FOR THIS PROPOSITION THE LD. AR RELIED O N THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS. M/S. VEGETABLE PRODUCT S LTD. (88 ITR 192) AND CIT VS. PODAR CEMENT (P) LTD. (226 ITR 625). 6.5 THE LD. AR SUBMITTED THAT THE AO DID NOT LOOK INTO THE PROVISIONS OF SECTION 43(5)(D) INSERTED BY THE FINANCE ACT, 2005 WITH EFF ECT FROM 01/04/2006 WHICH STATES THAT AN ELIGIBLE TRANSACTION IN RESPECT OF T RADING IN DERIVATIVES REFERRED TO IN CLAUSE (AC) OF SECTION 2 OF THE SECURITIES CONTR ACT (REGULATION) ACT, 1956 CARRIED OUT IN A RECOGNIZED STOCK EXCHANGE SHALL NO T BE DEEMED TO BE SPECULATIVE TRANSACTION. THE CENTRAL GOVT. HAD ISS UED NOTIFICATION NO. 2/2006 (SO 89E) DT. 25/01/2006 NOTIFYING THE STOCK EXCHANGE FOR THE PURPOSE OF THE SAID CLAUSE OF SECTION 43(5). THUS, ACCORDING TO TH E LD. AR THE LOSS FROM DEALING IN DERIVATIVES RS. 519.82 LAKHS IS NOT SPECULATIVE LOSS IN VIEW OF THE SPECIAL PROVISION OF SECTION 43(5)(D) OF THE I.T. ACT. THE LD. AR SUBMITTED THAT SINCE THE ASSESSEE IS A COMPANY SECTION 73 WOULD APPLY. FRO M THE PROVISIONS OF THE ACT AND PARTICULARLY THE EXPLANATION TO SECTION 73 OF TH E ACT, IT IS VERY CLEAR THAT THE EXPLANATION DEALS WITH THE PURCHASE AND SALE OF SHA RES AND NOT WITH DERIVATIVE TRANSACTIONS CARRIED ON ACCOUNT OF 'FUTURE AND OPTI ONS' THROUGH ANY RECOGNIZED STOCK EXCHANGE AS IN THE PRESENT CASE OF THE ASSESSE E. ACCORDING TO THE LD. AR, THE TRANSACTIONS OF 'FUTURE & OPTIONS' ARE NOT SHAR ES ALTHOUGH UNDERLYING ASSETS FOR DETERMINING THE PRICES OF FUTURES AND OPTIONS W HICH ARE SHARES, COMMODITIES, CURRENCIES ETC. FUTURES AND OPTIONS ARE IN THEMSELV ES THE ITEMS, WHICH ARE I.T.A. NO.150, 151 & 219/C/2014 7 TRADED THROUGH STOCK EXCHANGE AND NOT THE UNDERLYIN G ITEMS TO WHICH 'FUTURE AND OPTIONS' RELATE. IT WAS SUBMITTED THAT 'FUTURE AND OPTIONS' ARE NOT COVERED BY EXPLANATIONS TO SECTION 73 OF THE ACT FOR THE REA SONS THAT THIS IS SPECIFICALLY EXCLUDED BY WAY OF CLAUSE (D) TO SECTION 43(5) OF T HE ACT W.E.F. 01-04-2006 BY FINANCE ACT 2005. IN THE PRESENT CASE OF ASSESSEE, ACCORDING TO THE LD. AR, THE ASSESSMENT YEAR INVOLVED IS 2007-08, HENCE IT IS FU LLY COVERED BY THE AMENDED CLAUSE (D) OF SECTION 43(5) OF ACT. 6.6 THE LD. AR RELIED ON THE DECISION OF THE KOL KATA BENCH OF THE ITAT IN MADANLAL LTD. KOLKATA VS. DEPARTMENT OF INCOME TAX ON 04-05-2012 WHEREIN IT WAS HELD THAT THE EXPLANATION TO SECTION 73 OF THE ACT REFERS TO THE BUSINESS OF PURCHASE AND SALE OF SHARES AND NOT THE BUSINESS OF DERIVATIVES TRANSACTIONS CARRIED OUT THROUGH RECOGNIZED STOCK EXCHANGE BY TH E ASSESSEE. THE LD. AR FURTHER RELIED ON THE HON'BLE SUPREME COURT IN APPL LO TYRES LTD. VS. CIT (2002) 255 ITR 273 WHEREIN IT WAS HELD THAT UNITS OF UTI ARE NOT SHARES AS CONTEMPLATED IN EXPLANATION TO SECTION 73. ACCORDING TO THE APEX COURT 'IF THE LEGISLATIVE HAD CONTEMPLATED MAKING THE UNITS ALSO A DEEMED SHARE THEN IT COULD HAVE STATED SO. IN THE ABSENCE OF ANY SUCH SPECIFIC DEEMING PROVISIONS IN REGARD TO THE UNITS AS SHARE IT WOULD BE ERRONEOUS TO EXTE ND THE PROVISION OF SECTION 32(3) OF THE UTI ACT TO THE UNITS OF UTI FOR THE PU RPOSE OF HOLDING THAT THE UNIT IS A SHARE'. BY THE SAME ANALOGY, DERIVATIVES ARE DIFF ERENT FROM SHARES SINCE THEY I.T.A. NO.150, 151 & 219/C/2014 8 HAVE BEEN SO EXPRESSEDLY DEFINED BY THE SECURITIES CONTRACT (REGULATION )ACT 1956: THUS OUT OF THE TOTAL LOSS OF RS. 803.03 LAKHS, TH E LOSS PERTAINING TO DERIVATIVES RS. 519.82 IS TO BE TREATED AS 'NON-SPE CULATIVE' AND THE SAME CAN BE SET OFF AGAINST OTHER INCOME.' 6.7 THE LD. AR SUBMITTED THAT OUT OF TOTAL LOSS OF RS.8 .03 CRORES, LOSS FROM DEALING IN DERIVATIVES WAS RS.5.91 CRORES AND LOSS FROM CASH MARKETING TRANSACTIONS WAS TO THE TUNE OF RS.2.83 CRORES. TH E LD. AR SUBMITTED THAT IT IS COVERED UNDER ELIGIBLE TRANSACTIONS IN RESPECT OF T RADING AND DERIVATIVES IN TERMS OF SECTION 43(5)(D) AND HENCE THIS LOSS IN DERIVATI VES CANNOT BE TREATED AS SPECULATIVE LOSS AND THE SAME SHOULD BE ALLOWED TO BE ADJUSTED AGAINST THE BUSINESS INCOME. 7. THE LD. DR RELIED ON THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF DLF COMMERCIAL DEVELOPERS LTD. 261 ITR 127 (DEL.) WHERE IN IT WAS HELD THAT DETERMINATION OF STOCK DERIVATIVES VALUE IS DEPENDE NT ON SHARES HENCE THE PROVISIONS OF SECTION 73 OF THE INCOME TAX, 1961 AR E APPLICABLE TO THE DERIVATIVE BUSINESS. ACCORDINGLY, IT WAS SUBMITTED THAT THE L OSS ON ACCOUNT OF DERIVATIVE TRANSACTIONS IS NOT ALLOWED TO BE CARRIED FORWARD A ND SET OFF AGAINST (NON- SPECULATIVE) BUSINESS INCOME. THE LD. DR SUBMITTED THAT EXPLANATION TO SECTION 73 CATEGORICALLY PROVIDES THAT WHERE ANY PART OF TH E BUSINESS OF THE COMPANY INCLUDES PURCHASE AND SALE OF SHARES OF OTHER COMPA NY, IT SHALL BE DEEMED TO BE I.T.A. NO.150, 151 & 219/C/2014 9 CARRYING ON SPECULATION BUSINESS TO THE EXTENT TO W HICH THE BUSINESS CONSISTS OF THAT ACTIVITY. 7.1 FURTHER, THE LD. DR SUBMITTED THAT THE INTEN TION OF SECTION 43 OF THE ACT, WAS TO DEFINE CERTAIN TERMS IN RESPECT OF CLASSIFIC ATION OF INCOME AND FOR PURPOSES OF SECTION 28 TO SECTION 41 OF THE ACT. I T WAS SUBMITTED THAT SECTION 43(5)(D) OF THE ACT RESTRICTED APPLICATION SINCE IT DEFINES SPECULATIVE TRANSACTION AND EXCLUDES TRANSACTIONS AND DERIVATIVES ONLY FOR A LIMITED PURPOSE. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT SECTION 73 OF THE ACT HAS WIDER APPLICATION AND DEALS WITH CIRCUMSTANCES UNDER WHICH CARRY FORW ARD OF SUCH LOSSES CAN BE PERMITTED. FOR THIS PROPOSITION, THE LD. DR RELIED ON THE JUDGMENTS IN THE CASE OF CIT VS. INTERMETAL TRADES LTD. (2006) 285 ITR 53 6 (M.P.), CIT VS. ARVIND INVESTMENTS LTD. (1991) 192 ITR 365 (CAL.), EASTERN AVIATION AND INDUSTRIES LTD. VS. CIT (1994) 208 ITR 1023 (CAL). THUS IT WAS SUB MITTED THAT DERIVATIVES OF THE KIND AND NATURE TRADED BY THE ASSESSEE WERE RELATAB LE TO STOCKS AND SHARES AND ACCORDINGLY, THE ASSESSEE WAS NOT ENTITLED TO THE B ENEFIT OF SECTION 73 OF THE ACT. 7.2 THE LD. DR RELIED ON THE JUDGMENT OF THE DELH I HIGH COURT IN THE CASE OF DLF COMMERCIAL DEVELOPERS LTD., 261 CTR 127 WHEREI N IT WAS HELD AS UNDER: ' THE TERM 'SPECULATIVE TRANSACTION' HAS BEEN DEFIN ED ONLY IN SECTION 43(5) OF THE ACT AND IT IS QUALIFIED I.E. THAT THE SCOPE OF THE DEFINITION IS RESTRICTED IN ITS APPLICATION TO WORK ING OUT THE MANDATE OF SECTIONS 28 TO 41 OF THE ACT. IN TERMS OF THE EXP LANATION TO SECTION 73 OF THE ACT , IN CASE OF A COMPANY, BUSIN ESS OF PURCHASE AND SALE OF SHARES IS DEEMED TO BE SPECULATION BUSI NESS. I.T.A. NO.150, 151 & 219/C/2014 10 THE TAXPAYER'S CONTENTION THAT THE PARLIAMENT INTEN DED THAT SUCH TRANSACTIONS ARE ALSO EXCLUDED FROM THE MISCHIEF OF EXPLANATION TO SECTION 73 OF THE ACT, IS NOT SUBSTANTIATED. THOUGH THE EXPRESSION 'DERIVATIVES' IS DEFINED ONLY IN SECTION 43(5) OF THE ACT AND IT EXCLUDES SUCH TRANSACTIONS FRO M THE SCOPE OF SPECULATIVE TRANSACTIONS, DERIVATIVE HAS NOT BEEN EXCLUDED FROM SECTION 73 OF THE ACT SINCE A DEFINITION ENACTED FO R ONLY A RESTRICTED PURPOSE OR OBJECTIVE SHOULD NOT BE APPLIED TO ACHIE VE OTHER ENDS OR PURPOSES. CONTEXTUAL APPLICATION OF A DEFINITION OR TERM IS S TRESSED WHEREVER THE CONTEXT AND SETTING OF A PROVISION INDICATES AN INTENTION THAT AN EXPRESSION DEFINED IN SOME OTHER PLACE IN THE ENACT MENT CANNOT BE APPLIED. ALSO THE INTENT PREVAILS REGARDLESS WHETH ER STANDARD EXCLUSIONARY TERMS (SUCH AS UNLESS THE CONTEXT OTH ERWISE REUIRES) ARE USED. 7.3 THUS ACCORDING TO THE LD. DR, THE EXPLANATION TO SECTION 73 DEEMS THAT THE COMPANIES WHICH ARE INTO BUSINESS OF PURCHASE AND S ALE OF SHARES, EVEN IF DELIVERY BASED ARE TREATED TO BE CARRYING ON SPECUL ATIVE BUSINESS. FURTHER, ACCORDING TO THE LD. DR, THE EXPLANATION (D) TO SEC TION. 43(5) PROVIDES THAT THE ELIGIBLE DERIVATIVE TRANSACTION ON RECOGNIZED STOCK EXCHANGE IS NOT TREATED AS SPECULATIVE TRANSACTION FOR BUSINESS INCOME COMPUTA TION. IN THE PRESENT CASE THE HIGH COURT HELD THAT THE STOCK DERIVATIVE DERIVE TH EIR VALUE FROM UNDERLYING SHARES AND HENCE THEY ARE NOT DIFFERENT FROM SHARES . THEREFORE, THE EXCLUSION OF DERIVATIVE TRANSACTION FROM THE DEFINITION OF SPECU LATIVE TRANSACTION IS NOT PROPER FOR INTERPRETING THE PROVISIONS DEALING WITH SET-OF F AND CARRY FORWARD OF LOSS. THUS ACCORDING TO THE LD. DR, IN VIEW OF THE THE DE CISION OF DELHI HIGH COURT (SUPRA), THE ASSESSING OFFICER HAS RIGHTLY TREATED THIS TRANSACTION AS SPECULATIVE TRANSACTION AND LOSS NOT TO BE ADJUSTED AGAINST ANY OTHER KIND OF INCOME. I.T.A. NO.150, 151 & 219/C/2014 11 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL ON RECORD. THE LD. AR SUBMITTED THAT THE TOTAL DERIVATIVES LO SS IS RS.519.82 LAKHS AND OTHER TRADING LOSS (CASH MARKET) WAS RS. 283.21 LAKHS. A CCORDING TO THE LD. AR, AT WORST, RS.283.21 LAKHS IS TO BE CONSIDERED AS SPECU LATIVE LOSS AND RS. 519.82 LAKHS IS TO BE CONSIDERED AS BUSINESS LOSS ONLY IN VIEW OF THE SPECIAL PROVISION OF SECTION 43(5)(D) WHICH WAS INSERTED BY FINANCE ACT, 2005 WITH EFFECT FROM 1.4.2006 WHICH STATES THAT ELIGIBLE TRANSACTION IN RESPECT OF TRADING IN DERIVATIVES REFERRED IN CLAUSE (AC) OF SECTION 2 OF THE SECURIT IES CONTRACT (REGULATION) ACT, 1956 CARRIED OUT IN A RECOGNIZED STOCK EXCHANGE SHAL L NOT BE DEEMED TO BE SPECULATIVE TRANSACTION. HE DREW OUR ATTENTION TO CLAUSE (AC) OF SECTION 2 OF THE SECURITIES CONTRACTS (REGULATION) ACT, 1956. THUS HE SUBMITTED THAT THE LOSS IN DERIVATIVES CANNOT BE TREATED AS SPECULATIVE LOSS I N VIEW OF THE SPECIAL PROVISION OF SECTION 43(5)(D) OF THE ACT. THE ASSESSEE IS ALS O DEALING IN BUYING AND SELLING OF SHARES. IT INCURRED LOSS OF RS. 803.03 LAKHS IN DEALING OF SHARES AND CLAIMED IT AS BUSINESS LOSS TO BE SET OFF AGAINST THE BUSINESS INCOME OF THE ASSESSEE. THE ASSESSING OFFICER TREATED THE SAME AS SPECULATIVE L OSS. BEFORE US, THE CONTENTION OF THE LD. AR IS THAT SECTION 73 OF THE I.T. ACT HA S NO APPLICATION. AS PER SECTION 43(5), TRADING IN DERIVATIVES OF SHARES WHICH IS NO T DONE BY TAKING DELIVERY DOES NOT COME INTO THE PURVIEW OF SPECULATIVE TRANSACTIO NS. SIMILARLY, AS PER CLAUSE (D) OF SEC. 43(5), DERIVATIVE TRANSACTION IN SHARES IS NOT A SPECULATIVE TRANSACTION AS DEFINED IN THE SAID SECTION. THEREFORE, BOTH TH E PROFIT AND LOSS FROM SHARE DELIVERY TRANSACTIONS AND DERIVATIVE TRANSACTIONS A RE HAVING THE SAME MEANING, I.T.A. NO.150, 151 & 219/C/2014 12 AS FAR AS SECTION 43(5) OF THE ACT IS CONCERNED. IN VIEW OF THE FACT THAT BOTH DELIVERY TRANSACTIONS AND DERIVATIVE TRANSACTIONS A RE NON SPECULATIVE AS FAR AS SECTION 43(5) IS CONCERNED, IT FOLLOWS THAT BOTH WI LL HAVE SAME TREATMENT AS PER APPLICATION OF EXPLANATION TO SECTION 73 OF THE ACT. THEREFORE, AGGREGATION OF THE SHARE TRADING PROFIT AND LOSS FROM DERIVATIVE TRAN SACTION SHOULD BE DONE BEFORE EXPLANATION TO SECTION 73 IS APPLIED. THE ABOVE VIE W HAS BEEN TAKEN BY THE SPECIAL BENCH OF THE ITAT, MUMBAI IN THE CASE OF CO NCORDE COMMERCIAL PVT. LTD. (2005) (95 ITD 117). THE SPECIAL BENCH HELD AS UN DER: BEFORE CONSIDERING WHETHER THE ASSESSEES CASE IS HIT BY THE DEEMING PROVISION OF EXPLANATION TO SEC. 73 OF THE ACT, THE AGGREGATE OF THE BUSINESS PROFIT/LOSS HAS TO BE WORKED OUT BASED ON THE NON-SPECULATIVE PROFITS; EITHER IT IS FROM SHARE DELIVERY OR FROM S HARE DERIVATIVE. 8.1 FROM THE ABOVE, IT IS CONCLUDED THAT BOTH TRA DING OF SHARES AND DERIVATIVE TRANSACTIONS ARE NOT COMING UNDER THE PURVIEW OF SE CTION 43(5) OF THE ACT WHICH PROVIDES DEFINITION OF SPECULATIVE TRANSACTION EX CLUSIVELY FOR PURPOSES OF SECTION 28 TO 41 OF THE ACT. AGAIN, THE FACT THAT BOTH DEL IVERY BASED TRANSACTION AND DERIVATIVE TRANSACTIONS ARE NON-SPECULATIVE AS FAR AS SECTION 43(5) IS CONCERNED GOES TO CONFIRM THAT BOTH WILL HAVE SAME TREATMENT AS REGARDS APPLICATION OF THE EXPLANATION TO SECTION 73 IS CONCERNED, WHICH CREATE S A DEEMING FICTION. NOW BEFORE APPLICATION OF THE SAID EXPLANATION, AGGREGAT ION OF THE BUSINESS PROFIT/LOSS IS TO BE WORKED OUT IRRESPECTIVE OF THE FACT, WHETH ER IT IS FROM SHARE DELIVERY TRANSACTION OR DERIVATIVE TRANSACTION. I.T.A. NO.150, 151 & 219/C/2014 13 8.2 THIS VIEW HAS BEEN CONFIRMED BY THE HONBLE C ALCUTTA HIGH COURT IN THE CASE OF M/S. BALJI SECURITIES PVT.LTD. (88 CCH 313) AND HELD AS UNDER:- CLAUSE (D) OF SECTION 43(5) BECAME EFFECTIVE WITH EFFECT FROM 1ST APRIL, 2006. THEREFORE, PRIOR TO 1ST APRIL, 2006 ANY TRANS ACTION IN WHICH A CONTRACT FOR THE PURCHASE OR SALE OF ANY COMMODITY INCLUDING STOCKS AND SHARES WAS PERIODICALLY OR ULTIMATELY SETTLED OTHER WISE THAN BY THE ACTUAL DELIVERY OR TRANSFER OF THE COMMODITY OR SCRIP WAS A SPECULATIVE TRANSACTION. SUB-SECTION 1 OF SECTION 73 PROVIDES A S FOLLOWS: (1) ANY LOSS, COMPUTED IN RESPECT OF A SPECULATION BUSINESS CARRIED ON BY THE ASSESSEE, SHALL NOT BE SET OFF EXCEPT AGAINS T PROFITS AND GAINS, IF ANY, OF ANOTHER SPECULATION BUSINESS. THE RESULTAN T EFFECT WAS THAT ANY LOSS ARISING OUT OF SPECULATIVE TRANSACTION COULD O NLY HAVE BEEN SET OFF AGAINST PROFITS ARISING OUT OF SPECULATIVE TRANSACT ION. IN THE PRESENT CASE, THE ASSESSEE, AS ALREADY INDICATED, HAS BEEN DEALING IN SHARES WHERE DELIVERY WAS IN FACT TAKEN AND ALSO IN SHARES WHERE DELIVERY WAS NOT ULTIMATELY TAKEN. IN OTHER WORDS, THE ASSESSEE HAS BEEN DEALING IN ACTUAL SELLING AND BUYING OF SHARES AS ALSO DEALING IN SHARES ONLY FOR THE PURPOSE OF SETTLING THE TRANSACTION OTHERWISE THAN BY ACTUAL DELIVERY. THE QUESTION ARISE WHETHER THE LOSSES ARISING OUT O F THE DEALINGS AND TRANSACTION IN WHICH THE ASSESSEE DID NOT ULTIMATEL Y TAKE DELIVERY OF THE SHARES OR GIVE DELIVERY OF THE SHARES COULD BE SET OFF AGAINST THE INCOME ARISING OUT OF THE DEALINGS AND TRANSACTIONS IN ACT UAL BUYING AND SELLING OF SHARES. AN ANSWER TO THIS QUESTION IS TO BE FOUN D IN THE EXPLANATION APPENDED TO SECTION 73 WHICH READS AS FOLLOWS: EXPLANATION: WHERE ANY PART OF THE BUSINESS OF A CO MPANY OTHER THAN A COMPANY WHOSE GROSS TOTAL INCOME CONSISTS MA INLY OF INCOME WHICH IS CHARGEABLE UNDER THE HEADS INTEREST ON SE CURITIES, OR A COMPANY THE PRINCIPAL BUSINESS OF WHICH IS THE BUSI NESS OF BANKING OR THE GRANTING OF LOANS AND ADVANCES) CONSISTS IN THE PURCHASE AND SALE OF SHARES OF OTHER COMPANIES, SUCH COMPANY SHA LL, FOR THE PURPOSES OF THIS SECTION, BE DEEMED TO BE CARRYING ON A SPECULATION BUSINESS TO THE EXTENT TO WHICH THE BUSINESS CONSIS TS OF THE PURCHASE. IN ORDER TO RESOLVE THE ISSUE BEFORE US, THE SECTION HAS TO BE READ IN THE MANNER AS FOLLOWS: I.T.A. NO.150, 151 & 219/C/2014 14 EXPLANATION : WHERE ANY PART OF THE BUSINESS OF A COMPANY ( . . . .. .. .. .. .. .. .. . .. .. . ) CONSIST IN THE PURCHASE AND SALE OF SHARES OF OTHER COMPANIES, SUCH COMPANY SHALL, FOR THE PURPOS ES OF THIS SECTION, BE DEEMED TO BE CARRYING ON A SPECULATION BUSINESS TO THE EXTENT TO WHICH THE BUSINESS CONSISTS OF THE PURCHA SE AND SALE OF SUCH SHARES. IT WOULD, THUS, APPEAR THAT WHERE AN ASSESSEE, BEIN G THE COMPANY, BESIDES DEALING IN OTHER THINGS ALSO DEALS IN PURCH ASE AND SALE OF SHARES OF OTHER COMPANIES, THE ASSESSEE SHALL BE DE EMED TO BE CARRYING ON A SPECULATION BUSINESS. THE ASSESSEE, I N THE PRESENT CASE, PRINCIPALLY IS A SHARE BROKER, AS ALREADY IND ICATED. THE ASSESSEE IS ALSO IN THE BUSINESS OF BUYING AND SELLING OF SH ARES FOR SELF WHERE ACTUAL DELIVERY IS TAKEN AND GIVEN AND ALSO IN BUYI NG AND SELLING OF SHARES WHERE ACTUAL DELIVERY WAS NOT INTENDED TO BE TAKEN OR GIVEN. THEREFORE, THE ENTIRE TRANSACTION CARRIED OUT BY TH E ASSESSEE, INDICATED ABOVE, WAS WITHIN THE UMBRELLA OF SPECULA TIVE TRANSACTION. THERE WAS, AS SUCH, NO BAR IN SETTING OFF THE LOSS ARISING OUT OF DERIVATIVES FROM THE INCOME ARISING OUT OF BUYING A ND SELLING OF SHARES. THIS IS WHAT THE LEARNED TRIBUNAL HAS DONE. 8.3 FROM THE ABOVE DECISION OF THE CALCUTTA HIGH C OURT IN THE CASE OF BALJIT SECURITIES PVT. LTD. CITED SUPRA, THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE. 8.4 ACCORDINGLY, WE REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO BIFURCATE SPECULATIVE LOSS AND NORMAL BUSINESS LOSS AS INDICATED ABOVE. THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 9. THE NEXT GROUND IN THE ASSESSEES APPEAL IN I .T.A. NO. 150/COCH/2014 IS WITH REGARD TO THE DISALLOWANCE MADE U/S. 14A OF TH E I.T. ACT. I.T.A. NO.150, 151 & 219/C/2014 15 9.1 THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER DISALLOWED THE SUM OF RS.8,40,000/- U/S. 14A OF THE I.T. ACT AS THE ASSES SEE EARNED EXEMPT INCOME AT RS. 8.97 LAKHS. IN OUR OPINION, RULE 8D WAS INSERT ED IN INCOME TAX RULES WITH EFFECT FROM 24/03/2008 BY INCOME TAX (5 TH AMENDMENT) RULES, 2008. BEING SO, RULE 8D CANNOT BE APPLIED FOR THE ASSESSMENT YEAR 2 007-08. HOWEVER, THERE IS EVERY CHANCE TO INCUR CERTAIN ADMINISTRATIVE EXPEND ITURE. ACCORDINGLY, WE DIRECT THE AO TO DISALLOW 2% OF THE EXEMPT INCOME AS EXPEN DITURE INCURRED FOR THE PURPOSE OF EARNING EXEMPT INCOME. THIS GROUND OF A PPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THUS THE APPEAL IN ITA NO. 150/COC H/2014 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES.. 10. IN THE ASSESSEES APPEAL IN I.T.A. NO. 151/C OCH/2014, THE ONLY GROUND IS WITH REGARD TO TREATMENT OF INCOME OF RS. 4,04,11, 610/- AS INCOME FROM OTHER SOURCES. 10.1 THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER MADE AN ADDITION OF RS.4,04,11,610/- AS THIS AMOUNT WAS RECEIVED AS INT EREST FROM GOSHREE ISLAND DEVELOPMENT AUTHORITY (GIDA) ON CANCELLATION OF AUC TIONED PLOTS TO THE ASSESSEE UNDER THE DIRECTION OF SUPREME COURT. THE ASSESSIN G OFFICER TREATED THE INTEREST PAID BY THE GIDA ON CANCELLED PLOTS APART FROM THE VALUE OF LAND AS INCOME FROM OTHER SOURCES. I.T.A. NO.150, 151 & 219/C/2014 16 10.2 ON APPEAL, THE CIT(A) CONFIRMED THE ADDITI ON MADE BY THE ASSESSING OFFICER BY OBSERVING THAT THE PROVISIONS OF THE I.T ACT ARE VERY CLEAR. THE CIT(A) OBSERVED THAT THERE ARE SPECIFIC HEADS FOR C HARGING VARIOUS KINDS OF INCOME AND THE INCOME FROM OTHER SOURCE IS ACTUALL Y RESIDUAL HEAD WHERE INCOME FROM BANK INTEREST, DIVIDENDS ETC. ARE CHARG ED TO TAX. THE CIT(A) RELIED ON THE JUDGMENTS OF THE SUPREME COURT IN THE CASE O F CAMBAY ELECTRIC SUPPLY IND CO. VS. CIT, 113 ITR 84 AND STERLING FOODS VS. CIT 237 ITR 579 WHEREIN THE APEX COURT HELD THAT THERE ARE SPECIFIC HEADS OF IN COME AND GIVEN THE MAJOR SOURCE OF INCOME, IF A PARTICULAR INCOME FALLS UNDE R THE HEAD INCOME FROM OTHER SOURCES, THE SAME SHOULD BE TREATED AS INTEREST INC OME CHARGEABLE UNDER INCOME FROM OTHER SOURCES AND NOT AS BUSINESS INCOME, UNL ESS THE SAME CAN BE SHOWN AS DERIVED FROM SUCH BUSINESS. ACCORDING TO THE CI T(A), IN THIS CASE ALTHOUGH THE ASSESSEE RECEIVED THIS INTEREST ON THE CANCELLA TION OF ITS PLOT BUT THE FACT REMAINS THAT THE AMOUNT WAS RECEIVED AS INTEREST ON THE PAYMENTS MADE BY THE ASSESSEE TOWARDS THE COST OF THE LAND AND HENCE INT EREST RECEIVED FROM GIDA IS NOTHING BUT INCOME FROM OTHER SOURCES AND THE ASSES SING OFFICER HAD RIGHTLY TREATED THE SAME UNDER THIS HEAD. THE CIT(A) HELD THAT THE INCOME WAS NOT DERIVED FROM THE BUSINESS ACTIVITIES OF THE ASSESSE E. ACCORDINGLY, HE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 10.3 AGAINST THIS THE ASSESSEE IS IN APPEAL BEFOR E US. THE LD. AR SUBMITTED THAT SINCE THE ASSESSEE HAD TAKEN TERM LOANS FROM VARIOUS BANKS FOR THE I.T.A. NO.150, 151 & 219/C/2014 17 PURCHASE OF THE LAND THAT WAS ALLOTTED BY GIDA, THE REFORE WHEN THESE PLOTS WERE CANCELLED AND THE AMOUNTS WERE RETURNED TO THE ASSE SSEE WITH INTEREST, INTEREST ON THIS REFUND SHOULD BE TREATED AS BUSINESS INCOME AND SHOULD BE ALLOWED TO BE REDUCED FROM ITS WORK IN PROGRESS ACCOUNT AS EARLIE R INTEREST THAT WAS BEING PAID TO VARIOUS BANKS FOR RAISING THE TERM WAS ALSO PART OF WORK IN PROGRESS ACCOUNT OF THE ASSESSEE. THE LD. AR CLAIMED THAT SINCE THI S REFUND WAS ON THE LOAN/PLOTS WHICH WERE USED BY THE ASSESSEE IN ITS BUSINESS, TH E INTEREST THEREON SHOULD NOT BE TREATED AS INCOME FROM OTHER SOURCES AND RATHER IT SHOULD BE INCLUDED IN THE CONTRACT WORK IN PROGRESS WHICH WAS CAPITALIZED BY THE ASSESSEE TILL THE COMMENCEMENT OF THE PROJECT. 10.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR RELIED ON THE JUDGMENT OF SU PREME COURT IN THE CASE OF CIT VS. BOKARO STEEL LTD. (236 ITR 315). INCOME REC EIVED FROM LETTING OUT QUARTERS TO EMPLOYEES OF CONTRACTORS WHO WERE ENGAG ED IN CONSTRUCTION OF ASSESSEES PLANT, HIRE CHARGES FOR LETTING OUT PLAN T AND MACHINERY THROUGH CONTRACTORS, INTEREST ON ACCOUNT OF ADVANCES MADE T O THE CONTRACTORS BY THE ASSESSEE AND ROYALTY RECEIVED FROM THEM FOR EXCAVAT ION OF STONES ETC. ARE ALL INEXTRICABLY CONNECTED WITH THE CONSTRUCTION ACTIVI TY AND CAPITAL RECEIPTS SHOULD BE DEDUCTED FROM THE COST OF CAPITAL ASSETS. IN TH E PRESENT CASE, INTEREST WAS RECEIVED BY THE ASSESSEE FROM GIDA ON CANCELLATION OF AUCTION PLOTS TO THE ASSESSEE UNDER THE DIRECTION OF THE SUPREME COURT. GIDA PAID INTEREST TO THE I.T.A. NO.150, 151 & 219/C/2014 18 ASSESSEE APART FROM THE VALUE OF LAND ON CANCELLATI ON OF THE PLOTS ALLOTTED TO THE ASSESSEE. ACCORDING TO THE LD. AR THE INTEREST REC EIVED BY THE ASSESSEE ON CANCELLATION OF PLOTS ALLOTTED IS TO BE TREATED AS BUSINESS INCOME OF THE ASSESSEE AS THE PURCHASE OF PLOTS IS THE BUSINESS ACTIVITY O F THE ASSESSEE AND THE INCOME DERIVED FROM THE SAID TRANSACTION IS ALSO BUSINESS INCOME OF THE ASSESSEE. IN OUR OPINION, THE PLOT ALLOTTED TO THE ASSESSEE IS THE B USINESS ASSET OF THE ASSESSEE. HOWEVER, INTEREST RECEIVED ON CANCELLATION OF THE P LOTS IS A STEP REMOVED FROM THE BUSINESS ACTIVITIES OF THE ASSESSEE. THE DERIV ATION OF INTEREST FROM GIDA CANNOT BE SAID THAT IT IS EMANATING FROM THE BUSINE SS ACTIVITIES CARRIED OUT BY THE ASSESSEE. ON THE OTHER HAND, IT WAS EMANATING FROM THE AMOUNT PAID BY THE ASSESSEE AND NOT DIRECTLY FROM THE BUSINESS ACTIVIT IES OF THE ASSESSEE. THEREFORE, IN OUR OPINION, THAT INTEREST CANNOT BE CONSIDERED AS BUSINESS INCOME OF THE ASSESSEE. IN OTHER WORDS, IT SHOULD BE TREA TED AS INCOME FROM OTHER SOURCES. HENCE, THIS GROUND OF APPEAL IS REJECTED. THE APPEAL IN ITA NO. 151/COCH/2014 IS DISMISSED. 11. IN THE REVENUES APPEAL IN ITA NO. 219/COCH/2 014, THE REVENUES GRIEVANCE IS WITH REGARD TO TREATMENT OF INTEREST I NCOME EARNED ON MARGIN MONEY PAID BY GIDA. 11.1 THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER MADE AN ADDITION ON INTEREST RECEIVED ON MARGIN MONEY DEPOSITS AS INCOM E FROM OTHER SOURCES. I.T.A. NO.150, 151 & 219/C/2014 19 ACCORDINGLY, THE INTEREST INCOME OF RS.52,38,137/- WAS TREATED AS INTEREST INCOME IN THE HANDS OF THE ASSESSEE. 11.2 ON APPEAL, THE CIT(A) GAVE DIRECTION TO THE A SSESSING OFFICER TO TREAT THE AMOUNT AS BUSINESS INCOME. 11.3 AGAINST THIS, THE REVENUE IS IN APPEAL BEFOR E US. 11.4 THE LD. AR SUBMITTED THAT THE ISSUE IS COVERE D BY THE JUDGMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS. JAYPEE DSC VENTUR ES LTD. (335 ITR 132) WHEREIN IT WAS HELD THAT INTEREST RECEIVED FROM FIX ED DEPOSITS WHICH ARE IN BANK FOR BANK GUARANTEE SHOULD BE TREATED AS BUSINESS IN COME OF THE ASSESSEE. THE INTEREST RECEIVED SHALL GO TOWARDS ADJUSTMENT AGAIN ST THE PROJECT EXPENDITURE AND THE SAME CANNOT BE ASSESSED AS INCOME FROM OTHE R SOURCES. IN OUR OPINION, INTEREST DERIVED FROM DEPOSITS IN BANK WHICH WAS GI VEN FOR GETTING BANK GUARANTEE CANNOT BE TREATED AS CAPITAL RECEIPT OR B USINESS INCOME AND IT IS TO BE TREATED AS INTEREST INCOME TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES IN VIEW OF THE JUDGMENT OF THE SUPREME COUR T IN THE CASE OF PANDIAN I.T.A. NO.150, 151 & 219/C/2014 20 CHEMICALS LTD. VS. CIT (262 ITR 278). ACCORDINGLY, THIS GROUND RAISED BY THE REVENUE IS ALLOWED. 12. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E IN ITA NO.150/COCH/2014 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES, THE APP EAL FILED BY THE ASSESSEE IN ITA NO.151/COCH/2014 IS DISMISSED AND THE APPEAL FILED BY THE REVENUE IN ITA NO. 219/COCH/2014 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THI S 19 TH MARCH, 2018. SD/- SD/- ( GEORGE GEORGE K.) (CHAN DRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: DATED: 19 TH MARCH, 2018 GJ COPY TO: 1. M/S. DEWA PROJECTS (P) LTD., T.C. NO. 251/1497, S.S. KOVIL ROAD, THAMPANOOR P.O., TRIVANDRUM-.1 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -1(1), KOCHI. 3. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -1(2), KOCHI. 4. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1( 1), KOCHI. 5. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOCH I 6. THE PR. COMMISSIONER OF INCOME-TAX, KOCHI 7. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 8. GUARD FILE. BY ORDER (ASSISTANT REGISTRA R) I.T.A.T. , COCHIN