M/s. Coimbatore Cable Network Pvt Ltd, Bangalore V. The Commissioner oof Income Tax, (Appeals)-2, Bangalore

ITA 1618/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4649 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 31-07-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Business income
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 1618 / BANG/201 7 ASSESSMENT YEAR : 20 06 - 07 M/S. COIMBATORE CABLE NETWORK PVT. LTD., 642, 4 TH MAIN, INDIRA NAGAR, BANGALORE 560 038. PAN: AACCC3712C VS. THE COMMISSIONER OF INCOME TAX (APPEALS) 2, BANGALORE. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SMT. PADMA MEENAKSHI, JCIT (DR) DATE OF HEARING : 30 .0 5 .2018 DATE OF PRONOUNCEMENT : 08 .0 6 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A)-2, BANGALORE DATED 22.02.2017FOR ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX - 2, BANGALORE CONFIRMING THE ORDER U/S.263 OF THE ACT I S OPPOSED TO THE FACTS OF THE CASE AND LAW APPLICABLE TO IT. 2. THE LEARNED COMMISSIONER OF INCOME TAX - 2 ERRED IN CONFIRMING THAT INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE ORDER OF THE ASSESSI NG OFFICER WAS NOT ERRONEOUS AND NOT PREJUDICIAL TO THE INTEREST OF TH E REVENUE. 3. THE LEARNED COMMISSIONER OF INCOME TAX - 2, ERRE D IN HOLDING THAT THE INCOME CONSEQUENT TO SALE OF SHARES IS ASSESSAB LE UNDER THE HEAD BUSINESS IGNORING THE FACT THAT THE APPELLANT WAS H OLDING THE SHARES IN QUESTION AS INVESTMENTS AND NOT AS STOCK IN TRADE A ND THEREFORE THE PROFIT ON SALE OF SUCH SHARES WAS RIGHTLY ASSESSABL E UNDER THE HEAD LONG TERM CAPITAL GAINS. 4. THE FACT THAT THE APPELLANT WAS NOT DEALING IN S HARES HAS NOT BEEN APPRECIATED AND THE FACT THAT THE ONLY SHARES HELD BY IT WERE THE SHARES WHICH WERE SUBJECT MATTER OF SALE DURING THE YEAR HAS BEEN ITA NO.1618/BANG/2017 PAGE 2 OF 4 IGNORED. 5. THE COMMISSIONER OUGHT TO HAVE CONSIDERED CIRCUL AR NO.4 OF 2007, DATED 15.06.2007 ISSUED BY CENTRAL BOARD OF DIRECT TAXES ON THE ISSUE. 6. THE LEARNED COMMISSIONER OF INCOME TAX - I, COIM BATORE ERRED IN IGNORING THE RATIO LAID DOWN IN THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS. MAX INDIA LTD (2007) 295 ITR 28 2 (SC) WHEREIN IT HAS BEEN CLEARLY HELD THAT WHEN TWO INTERPRETATIONS ARE POSSIBLE, FOLLOWING ONE OF THE INTERPRETATIONS CANNOT BE HELD AS ERRONEOUS. 7. THE COMMISSIONER OF INCOME TAX HAS ERRED IN VARY ING THE HEAD OF INCOME AND TREATING THE INCOME AS BUSINESS INCOME I NSTEAD OF CAPITAL GAINS ONLY ON THE GROUNDS THAT APPEAL BEFORE THE HO NORABLE APPELLATE TRIBUNAL HAS UPHELD ORDER UNDER SECTION 263 OF THE ACT. 8. THE COMMISSIONER OF INCOME TAX APPEALS - 2 HAS N OT CONSIDERED ANY OF THE FACTS RELEVANT TO THE CLAIM OF THE APPEL LANT THAT A. APPELLANT HAS CLASSIFIED THE SHARES HELD AS INVESTM ENT. THE FACT HAS BEEN TOTALLY IGNORED. B. THE APPELLANT HAD HELD THE SHARES FOR A PERIOD EXCE EDING 12 MONTHS AND HAVE NOT CARRIED OUT MULTIPLE TRANSACTIO NS. C. THE ORDER FAILS TO ESTABLISH A REASON TO ASSUME THA T THE SHARES HELD WERE STOCK IN TRADE AND NOT INVESTMENTS . 9. THE LEARNED COMMISSIONER OF INCOME TAX - 2, ERRE D IN NOT APPRECIATING THE FACT THAT THE PROFESSIONAL CHARGES WERE INCURRED IN CONNECTION WITH THE SALE OF SHARES AND IN THE EVENT OF THE EXPENDITURE NOT BEING ALLOWED UNDER THE HEAD BUSINESS THE SAME SHOULD HAVE BEEN ALLOWED WHILE COMPUTING INCOME UNDER THE HEAD LONG TERM CAPITAL GAINS SINCE THE EXPENDITURE WAS INCURRED IN CONNECT ION WITH THE TRANSFER. 10. THE COMMISSIONER HAS NOT TAKEN INTO CONSIDERATI ON THE COPIES OF INVOICES RAISED BY J P MORGAN STANLEY P LIMITED AND HAS GROSSLY MISREPRESENTED FACTS BY STATING THAT NO DETAILS OR EVIDENCE HAS BEEN FURNISHED IN PARA 4.3 OF THE CIT'S ORDER. 11. THE APPELLANT CRAVES PERMISSION TO ADD, DELETE OR ALTER ANY OF THE GROUNDS AT THE TIME OF HEARING. 3. THE APPEAL WAS FIXED FOR HEARING ON 30.05.2018 A ND NOTICE OF HEARING WAS SENT TO THE ASSESSEE BY RPAD WHICH HAS COME BACK UNSERVE D. THE NOTICE HAS BEEN SENT AT THE SAME ADDRESS WHICH IS PROVIDED BY THE ASSESSEE IN FORM NO. 36. NO NEW ADDRESS HAS BEEN INTIMATED BY ASSESSEE AND THEREFORE, WE HAVE NO OPTION BUT TO DECIDE THE APPEAL EX-PARTE QUA THE ASSESSEE. THE LD. DR OF REVENUE SUBMITTED THAT AS PER THE GROUNDS RAISED BY THE ASSESSEE, THE DISPUTE IS REGARDING THE ORDER PASSED BY CIT, BANGALORE IS U/S. 263 BUT THE ORDER ENCLOSED WITH THE APPEAL MEMO IS ORDER OF CIT (A)-2 , BANGALORE DATED 22.02.2017 AND THEREFORE, THE APPEAL OF THE ASSESSE E IS NOT MAINTAINABLE. ITA NO.1618/BANG/2017 PAGE 3 OF 4 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR OF THE REVENUE. WE FIND THAT AS PER THE GROUNDS OF APPEAL AS REPRODUCE D ABOVE, THE GRIEVANCE OF THE ASSESSEE IS REGARDING THE VALIDITY OF ORDER PAS SED BY CIT U/S. 263 BUT ALONG WITH THE APPEAL MEMO, THE ORDER ENCLOSED IS NOT OF THE ORDER OF CIT PASSED BY HIM U/S. 263 BUT ORDER ENCLOSED IS THE ORDER PASSED BY CIT(A)-2, BANGALORE DATED 22.02.2017. THE ASSESSMENT ORDER ENCLOSED WI TH THE APPEAL MEMO IS ALSO THE ORDER PASSED BY THE AO ON 30.12.2011 U/S. 143(3) R.W.S. 263 OF IT ACT AND AS PER THIS ORDER, CIT HAS PASSED ORDER U/S. 26 3 ON 25.03.2011 AND AGAINST THIS ORDER ALSO, THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL AND THE SAME WAS DISMISSED BY THE TRIBUNAL AS THE TRIBUNAL DID NOT FIND ANY MERIT IN THAT APPEAL. UNDER THESE FACTS, THE APPEAL OF THE ASSES SEE IS NOT ADMISSIBLE BECAUSE THE GROUNDS RAISED BY THE ASSESSEE ARE IN R ESPECT TO THE ORDER PASSED BY CIT(A) U/S. 263 BUT THE ORDER ENCLOSED WITH THE APPEAL ARE THE ORDER OF CIT(A)-2, BANGALORE DATED 22.02.2017 AND THE ASSESS MENT ORDER ENCLOSED IS ALSO THE ASSESSMENT ORDER DATED 30.12.2011 PASSED B Y THE AO U/S. 143 R.W.S. 263 OF IT ACT AND IT IS STATED IN THAT ORDER THAT T HE APPEAL FILED BY THE ASSESSEE BEFORE THE TRIBUNAL AGAINST THE ORDER PASSED BY CIT U/S 263 WAS DISMISSED BY THE TRIBUNAL. HENCE, THE PRESENT APPEAL IS NOT ADMI SSIBLE BECAUSE IF WE CONSIDER IT AS AN APPEAL AGAINST 263 ORDER, IT IS N OT ADMISSIBLE BECAUSE APPEAL AGAINST 263 ORDER IS ALREADY DISMISSED BY THE TRIBU NAL AS STATED BY THE AO IN THE ASSESSMENT ORDER AND IF WE CONSIDER IT AS APPEA L AGAIST THE ORDER OF CIT (A) IN THE PROCEEDINGS IN ORDER PASSED BY THE AO U/S 14 3 (3) R.W.S. 263, THEN ALSO THE APPEAL IS NOT ADMISSIBLE BECAUSE AS PER THE GRO UNDS OF APPEAL, THE GRIEVANCES ARE AGAINST 263 ORDER ONLY. HENCE, THIS ASSESSEES APPEAL IS DISMISSED AS UNADMITTED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 08 TH JUNE, 2018. /MS/ ITA NO.1618/BANG/2017 PAGE 4 OF 4 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.