Arman Lease & Finance Ltd., Ahmedabad V. The ACIT,Circle-1, Ahmedabad

ITA 160/AHD/2005

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 7722 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-06-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 18-01-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P M SHUKLA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Business income; Opportunity of being heard; Rule 8D
• Section: 14A

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, A - BENCH, AHMEDABAD . BEFORE : SHRI T.K.SHARMA, JUDICIAL MEMBER , AND SHRI D.C.AG RAWAL , ACCOU NTANT MEMBER. ITA NO. 160 AND 2053/AHD/2005 (ASSESSMENT YEAR S 2001 - 02 AND 2002 - 03) ARMAN LEASE & FINANCE LTD., 502/503, SAKAR III, OPP.OLD HIGH COURT, ASHRAM ROAD, AHMEDABAD. VERSUS ACIT, CIRCLE 1, AHMEDABAD. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI S.N.SOPARKAR, AR FOR THE RESPONDENT SHRI P.M.SHUKLA, DR ORDER SHRI T.K.SHARMA, JUDICIAL MEMBER : THESE TWO APPEALS FILED BY THE A SSESSE INVOLVING COMMON ISSUES WERE HEARD TOGETHER AND ARE NOW DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. GROUND NO.1, WHICH IS COMMON IN BOTH THE APPEALS, IS AGAINST THE ORDER OF THE LEARNED CIT(A) IN HOLDING THAT THE BUSINESS OF HIRE PURCHASE AND LEASE DOES NOT AMOUNT TO GRANTING OF LOANS AND ADVANCES AND THEREFORE, THE ASSESSEE IS NOT COVERED BY THE EXCEPTIONS LISTED IN EXPLANATION TO SECTION 73 OF THE INCOME - TAX ACT,1961 AND THEREFORE, NOT ALLOWI NG THE SET OFF OF THE LOSS FROM SHARES AND SECURITIES OF RS.16,63,971 IN THE ASSESSMENT YEAR 2001 - 02 AND RS.15,69,203 IN THE ASSESSMENT YEAR 2002 - 03 AGAINST ITS BUSINESS INCOME. 3. AT THE TIME OF HEARING BOTH SIDES CONCEDED THAT THE ISSUE IN CONTROVERSY IN VOLVED IN THIS GROUND IS NOW REQUIRED TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER IN VIEW OF THE DECISION OF THE ITAT, SPECIAL BENCH IN THE CASE OF GUJARAT GAS FINANCIAL SERVICES LTD., V. ACIT [(2008) 307 ITR (AT) 370 (AHD)(SB)] . IN THIS DECISION ON PAGES 404 TO 415, VIDE PARAGRAPHS 50 TO 56, THE SPECIAL BENCH HAS LAID DOWN THE TEST TO EXAMINE WHETHER HIRE PURCHASES IS LOAN OR ADVANCE. BOTH SIDES, THEREFORE, CONTENDED THAT NOW THIS MATTER SHOULD BE SENT BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME AFRESH AFTER EXAMINING/APPLYING THE TESTS LAID IN THE AFORESAID DECISION OF THE ITAT. WE AGREE AND ORDER ACCORDINGLY. 2 4. GROUND NO.2, WHICH IS COMMON IN BOTH THE APPEALS RELATES TO DISALLOWANCES OF EXPENSES U/S.14A OF THE ACT RELATING TO EX EMPTED DIVIDEND INCOME. 5. HEARD BOTH THE PARTIES. NOW THAT PROVISIONS OF RULE 8D HAVE COME INTO OPERATION IN THIS SECTION 14A(2) AND (3) OF THE ACT WHICH THE ITAT IN THE CASE OF ITO V. DAGA CAPITAL MANGAL P. LTD., IN ITA NO.8057/M/2003 HAVE HELD THESE PR OVISIONS OF RULE 8D TO HAVE RETROSPECTIVE APPLICATION. IN VIEW OF THIS AND IN VIEW OF CONCESSION MADE BY BOTH THE PARTIES, WE REMAND THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT THE ASSESSEE SHALL FURNISH COMPLETE DETAILS I.E., THE SHARES ON WHICH DIVIDEND WHICH IS EXEMPT WAS EARNED, THE SOURCES OF INVESTMENT CLEARLY INDICATING AS TO WHETHER ANY BORROWED FUNDS WERE USED FOR MAKING INVESTMENT IN SHARES. THE ASSESSING OFFICER WILL EXAMINE THE SAME AND RE - ADJUDICATE THE ISSUE KEEPIN G IN VIEW THE PROVISIONS CONTAINED IN SECTION 14A OF THE ACT AND ALSO RULE 8D OF THE I.T.RULES,1962 AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRECT ACCORDINGLY. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE SHALL BE TREATED AS ALLO WED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 24.07.09 SD/ - SD/ - ( D.C.AG RAWAL ) ACCOUNTANT MEMBER. (T.K.SHARMA) JUDICIAL MEMBER DATE: 24.07.09 (H.K.PADHEE) SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE CIT CONCERNED. 4. THE CIT(A) CONCERNED. 5. THE DR, AHMEDABAD 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, DEPUTY.REGISTRAR.