The ACIT, Circle-7, Ahmedabad V. Smt. Tejal Bharatkumar Padia, Ahmedabad

ITA 1535/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9660 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 24-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEP SINGH
• Assessee Lawyers: TUSHAR HEMAN
• Keywords: Business income; Retrospective amendment; Tax effect

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV , JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI , ACCOUNTANT MEMBER ./ ITA NO . 1535 / AHD/ 20 1 3 [ [ / ASS TT. YEAR : 20 0 9 - 20 1 0 ] ACIT, CIR.7 AHMEDABAD. VS SMT.TEJAL BHARATKUMAR PADIA 21, VRUNDAVAN BUNGALOWS VIBHAG - I, NR.ASHWAMESHA ROW HOUSE JODHPUR, SATELLITE AHMEDABAD 380 015. PAN : AHWPP 2755 Q ( APPLICANT ) (RESPONDENT) REVENUE BY : SHRI RAJEEP SINGH, SR.DR ASSESSEE BY : SHRI TUSHAR HEMAN / DATE OF HEARING : 29 / 01 /201 6 / DATE OF PRONOUNCEMENT: 08 / 02 /201 6 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDER OF THE LD.CIT(A) - XIV DATED 20.3.2013 PASSED FOR THE ASSTT.YEAR 2009 - 10. 2. GROUND NO.1 IS THE ONLY SUBSTANTIAL GROUND OF APPEAL WHICH PROJECT THE GRIEVANCE OF THE REVENUE AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE U/S.6 8 OF THE ACT BY THE A O ON ACCOUNT O F CREDIT OF RS.46,15,097 AS STCG, EVEN THOUGH THE SHARE TRANSACTIONS WERE NOT ITA NO. 1535 /AHD/201 3 2 RECORDED IN THE NAME OF ASSESSEE ON THE FLOOR OF STOCK EXCHANGE A ND TRANSACTI ON WE R E PROV I DED BOGUS. 3. THE LD.COUN S EL FOR THE ASSESSEE, AT THE OUTSET CONTENDED THAT THE APPEAL FILED BY THE REVENUE IS NOT ADMISSIBLE, AS THE SAME IS FILED BY THE REVENUE IN VIOLATION OF CBDT CIRCULAR NO.21/2015 DATED 10.12.2015. BY VIRTUE OF THIS INSTRUCTION, THE BOARD HAS RESTRAINED THE DEPARTMENT NOT TO FILE APPEAL BEFORE THE TRIBUNAL WHERE THE TAX EFFECT IS BELOW RS.10 LAKHS . HE SUBMITTED THAT THE TAX EFFECT ON THE IMPUGNED ADDITION IS LESS THAN RS.10,00,000/ - . THE LD.COUNSEL FOR THE ASSESSEE FILED A CALCULATION SHEET DEMONSTRATING THAT THE TAX EFFECT IN THE PRESENT A P P E A L I S BELOW RS.10 LAKHS, AND THEREFORE, APPEAL OF THE R E V E N U E LIABLE TO BE DISMISSED IN LIMINE . THE TAX CALCULATION MADE BY THE ASSESSEE AS UNDER: TREATMENT OF INCOME ON SAL E OF SHARES SR.NO. PARTICULARS AS PER ASSESSEE AS PER AO A. INCOME ON SALE OF SHARES (RS.) 4615097 4615097 B. INCOME OFFERED AS: SHORT TERM CAPITAL GAIN BUSINESS INCOME C. RATE OF TAX 15% 30% D. AMOUNT OF TAX (A*C/100) 692265 138429 E. ADDITIONAL TAX ON ACCOUNT OF TREATING INCOME ON SALE OF SHARES AS BUSINESS INCOME INSTEAD OF SHORT TERM CAPITAL GAIN (RS.13,84,529 RS.6,92,265) 692265 TAX EFFECT (E) 692265 ITA NO. 1535 /AHD/201 3 3 WHEN WE CONFRONTED THIS TO THE LD.DR, HE CONTENDED THAT IT BE LEFT OPEN FOR THE VERIFICATION OF THE AO. 4. WE FIND THAT THE ASSESSEE HAS FILED ITS APPEAL ON 24.5.2013. ON 10.12.2015 THE CBDT HAS ISSUED INSTRUCTIONS BEARING NO. 21/2015 PROHIBITING ITS SUBORDINATE AUTHORITIES FROM FILING OF THE APPEAL TO THE TRIBUNAL AGAINST THE ORDE R OF THE CIT(A) WHERE THE TAX EFFECT BY VIRTUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.10 LAKHS. THE INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RETROSPECTIVE EFFECT, MEANING THEREBY, THESE INSTRUCTIONS ARE APPLICABLE ON PENDING APPEALS ALSO. I N THE PRESENT CASE, ACCORDING TO THE CALCULATION MADE BY THE ASSESSEE, THE DIFFERENTIAL TAX EFFECT ON ACCOUNT OF TR E ATING THE INCOME ON SALE OF SHARES AS BUSINESS INCOME AS HELD BY THE AO AND SHORT TERM CAPITAL GAIN AS CLAIMED BY THE ASSESSEE , WOULD BE LESS THAN RS.10 LAKHS. THUS, THE PRESENT APPEAL DESERVES TO BE DISMISSED BEING TREATED TO BE FILED IN VIOLATION OF CBDT INSTRUCTIONS. IT IS FUR T HER OBSERVED THAT SINCE, WHILE HEARING THE APPEAL, SUCH FACTORS COULD NOT BE CROSS - VERIFIED, T HER E FORE, IN CASE, ON RE - VERIFICATION AT THE E ND OF THE AO, IT CAME TO THE N OTICE THAT THE TAX EFFECT IS MORE OR IT FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE INSTRUCTION, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RECALL OF THIS ORDER. SUCH APPLICATION SHOULD BE FILED WITHIN FOUR YEARS OF THIS ORDER. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED. 5 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 T H FEBRUARY , 201 6 AT AHMEDABAD. S D / - S D / - ( ANIL CHATURVEDI) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 8 / 02 /201 6 T R U E C O P Y ITA NO. 1535 /AHD/201 3 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, 6. [ / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD