ACIT, Circle - 4, Kolkata, Kolkata V. The Punjab Produce & Trading Co. (P) Ltd., Kolkata

ITA 1629/KOL/2008

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74970 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-06-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 21-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K DAS
• Assessee Lawyers: SANJAY BHOW MIK PER SHR
• Keywords: Speculation loss

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI P.K.BANSAL, A.M. & SHRI GEORGE MATHAN, J.M. ] I.T.A. NO.1629/KOL/2008 ASSESSMENT YEAR : 2003-04 ACIT, CIRCLE-4, KOLKATA -VS- THE PUNJAB PRODUCE & TRADING CO.(P)LTD. ( APPELLANT ) PAN:AABCT 1705D RESPONDENT ) DATE OF CONCLUDING THE HEARING : 15.01.2014 DATE OF PRONOUNCING THE ORDER : 16.01.2014 APPEARANCES : FOR THE APPELLANT : SHRI K.K.DAS, JCIT, SR.DR : FOR THE RESPONDENT : SHRI SANJAY BHOW MIK O R D E R PER SHRI P.K.BANSAL, A.M. : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A)- IV, KOLKATA DATED 03.06.2008 FOR THE ASSESSMENT YEA R 2003-04. 2. WHEN THE APPEAL WAS FILED, THE REVENUE HAS TAKEN THE GROUND THAT THE CIT(A) HAS NOT ANSWERED THE BASIC QUESTION WHETHER A PARTICULAR LOSS IS SPECULATION OR NOT. SUBSEQUENTLY, THE REVENUE, VIDE LETTER DATED 24.04.2012 HAS FILED THE REVISED GROUND OF APPEAL, WHICH READS AS UNDER: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE HONBLE CIT(A) WAS NOT CORRECT IN CONCLUDING THAT GROSS TOTAL INCOME O F THE ASSESSEE CONSISTS MAINLY OF INCOME CHARGEABLE UNDER THE HEAD HOUSE PR OPERTY AND OTHER SOURCES. SINCE THE GROUND TAKEN BY THE REVENUE WAS THE LEGAL GROUND, WE PERMITTED THE REVENUE TO FILE THE LEGAL GROUND. 3. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CON SIDERED THE SAME. WE NOTED THAT THE ISSUE BEFORE THE CIT(A) WAS WHETHER EXPLANATION TO SECTION 73 IS APPLICABLE IN THE CASE OF THE ASSESSEE WHETHER THE ASSESSEE HAS PURCHASED AND SOLD THE SHARES DURING THE YEAR. THE CIT(A) HELD THAT DU RING THE PREVIOUS YEAR, THERE 2 I.T.A. NO.1629 /KOL/2008 THE PUNJAB PRODUCE & TRADING CO.(P)LTD. A.Y. 2003-04 WAS NO PURCHASE OR SALE OF SHARES BY THE ASSESSEE. THE ASSESSEE MERELY HELD THE SHARES, THE MARKET VALUE OF WHICH HAS DECLINED RESU LTING IN A VALUATION LOSS OF RS.1,82,02,881/-. SINCE THE GROSS TOTAL INCOME OF T HE ASSESSEE CONSISTED MAINLY OF INCOME CHARGEABLE UNDER THE HEADS INCOME FROM HOUS E PROPERTY AND OTHER SOURCES, THE EXPLANATION TO SECTION 73 DID NOT APP LY AND THE SHARE VALUATION LOSS CANNOT BE TREATED TO BE THE SPECULATION LOSS. THE G ROUND TAKEN BY THE REVENUE BEFORE US IS THAT THE CIT(A) WAS NOT CORRECT IN CON CLUDING THAT THE GROSS TOTAL RECEIPT OF THE ASSESSEE CONSISTS MAINLY OF INCOME C HARGEABLE UNDER THE HEAD HOUSE PROPERTY AND OTHER SOURCES. THE REVENUE H AS NOT TAKEN ANY GROUND WHETHER THE ASSESSEE IS ENGAGED IN A BUSINESS OF PU RCHASE AND SALE OF SHARES OR NOT. THE EXPLANATION TO SECTION 73 IS APPLICABLE, IF ANY PART OF THE BUSINESS OF A COMPANY CONSISTS IN THE PURCHASE OR SALE OF THE SHA RES OF OTHER COMPANIES. THE FINDING OF THE CIT(A) THAT THERE WAS NO PURCHASE AN D SALE OF THE SHARES WAS NOT CHALLENGED BEFORE US. IN VIEW OF THIS FACT, IF THER E IS NO PURCHASE OR SALE OF THE SHARES, THE EXPLANATION TO SECTION 73 WILL NOT APPL Y AND THE GROUND TAKEN BY THE REVENUE WILL NOT ALLOW ANY RELIEF TO THE REVENUE, A S THE BASIC ISSUE BEFORE THE TAX AUTHORITIES BELOW RELATES TO THE FACT WHETHER THE L OSS INCURRED BY THE ASSESSEE ON VALUATION OF THE STOCK OF SHARES IS A SPECULATION L OSS OR NOT. UNDER THESE CIRCUMSTANCES, WE DISMISS THE GROUND TAKEN BY THE R EVENUE AND CONFIRM THE ORDER OF THE CIT(A). 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. THIS ORDER IS PRONOUNCED IN THE COURT ON 16 TH JANUARY, 2014. SD/- SD/- (GEORGE MATHAN) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 16 TH JANUARY, 2014 3 I.T.A. NO.1629 /KOL/2008 THE PUNJAB PRODUCE & TRADING CO.(P)LTD. A.Y. 2003-04 COPY OF THE ORDER FORWARDED TO: 1. THE PUNJAB PRODUCE & TRADING CO.(P)LTD., 9/1, R.N.M UKHERJEE ROAD, KOLKATA- 700 001. 2. ACIT, CIRCLE-4, KOLKATA 3. THE CIT(A), KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.)