Income Tax Officer, Ward-5(2), Hyderabad V. Sri Jitender Kumar Kantilal Bhandari, Hyderabad

ITA 1651/HYD/2013

• Counselvise Citation: 165122514 RSA 2013
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 29-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Revised return
• Section: 5(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.1651/HYD/2013 ASSESSMENT YEAR 2010-2011 ITO, WARD 5(2) HYDERABAD. VS. MR. JITENDER KUMAR KANTILAL BHANDARI, HYDERABAD. PAN AAEHJ-7241-L (APPELLANT) (RESPONDENT) FOR REVENUE MR. R. MOHAN REDDY FOR ASSESSEE MR. S. RAMA RAO DATE OF HEARING 23.07.2014 DATE OF PRONOUNCEMENT 06.08.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS IS REVENUE APPEAL AGAINST THE ORDERS OF THE LD. CIT(A)-V, HYDERABAD DATED 23.08.2013 ON THE ISS UE OF DIRECTING THE A.O. TO ALLOW THE LOSS AS CLAIMED. 2. BRIEFLY STATED, ASSESSEE IS AN INDIVIDUAL AND H AS SHOWN INCOME FROM OTHER SOURCES. IN THE COURSE OF S CRUTINY, A.O. NOTICED THAT THERE ARE MANY CREDITS IN THE BAN K OF MAHAVIR COOPERATIVE URBAN BANK DURING THE YEAR AND ASSESSEE WAS ASKED TO EXPLAIN THE TRANSACTIONS. ASSESSEE SUB MITTED THAT IT HAS INCURRED VARIOUS TRADES IN DERIVATIVES AND HAS INCURRED NET LOSS OF RS.21,66,408 WHICH WAS NOT CLA IMED, AS THE INCOME WAS FROM OTHER SOURCES. IT WAS FURTHER S UBMITTED THAT ASSESSEE HAD PROFIT IN TRADING IN SHARES OF RS .6,70,600 2 ITA.NO.1651/HYD/2013 MR. JITENDER KUMAR KANTILAL BHANDARI, HYDERABAD. AND LOSSES IN DERIVATIVES OF RS.28,37,007, NET LOSS BEING RS.21,66,408. IT WAS FURTHER SUBMITTED THAT ASSESSE E HAS BORROWED FUNDS TO AN EXTENT OF RS.17,46,000. A.O. B ROUGHT TO TAX THE PROFIT FROM TRADING IN SHARES AND THE UNEXP LAINED MONEY BY WAY OF LOANS OBTAINED TO AN EXTENT OF RS.1 7,46,000 AND REJECTED THE LOSSES ON THE REASON THAT ASSESSEE HAS NOT FILED REVISED RETURN OF INCOME. 3. LD. CIT(A) AFTER CONSIDERING THE ASSESSEES SUBMISSIONS AND LEGAL PRINCIPLES AS STATED THEREIN IN PARA 4 OF THE ORDER, ALLOWED ASSESSEES CLAIM ON THE REASON T HAT A.O. HAS ACCEPTED THE INCOME AND SO THE CORRESPONDING LOSS T HEREIN SHOULD BE ALLOWED. HE PLACED RELIANCE ON THE JUDICI AL PRONOUNCEMENTS AND BOARD CIRCULAR VIDE PARA 5.3 OF HIS ORDER. REVENUE IS AGGRIEVED. 4. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PRINCIPLES ESTABLISHED BY THE HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD., 157 TAXMAN (1) (SC), WE ARE OF THE OPINION THAT THERE IS NO NEED TO DEVIATE FROM THE F INDINGS OF THE LD. CIT(A). IN FACT, THE ENTIRE TRANSACTION OF SHAR ES WERE NOT ADMITTED BY THE ASSESSEE AS HE INCURRED LOSSES ON T HE TRANSACTION AND OTHER INCOME WAS ONLY OF OTHER SOUR CES. A.O. WHILE BRINGING TO TAX THE PROFIT IN TRADING IN SHAR ES, DISALLOWED THE LOSSES IN DERIVATIVES ON THE REASON THAT ASSESS EE HAS NOT FILED REVISED RETURN. HE SHOULD HAVE CONSIDERED ONL Y AN AMOUNT OF RS.21,66,408, WHICH IS THE NET LOSS FROM THE TRANSACTIONS IN SHARES/DERIVATIVES. BE THAT AS IT M AY, THERE IS NO MERIT IN REVENUE CONTENTION THAT ASSESSEE HAS TO FILE A REVISED RETURN FOR CLAIMING LOSS AS JUDICIAL AUTHOR ITIES ARE COMPETENT TO ENTERTAIN THE SAME. NOT ONLY THAT, A.O . IN THE SCRUTINY ALSO FOUND OUT ABOUT THE LOANS WHICH WERE RECEIVED BY 3 ITA.NO.1651/HYD/2013 MR. JITENDER KUMAR KANTILAL BHANDARI, HYDERABAD. THE ASSESSEE AND BROUGHT TO TAX. THEREFORE, WHEN A. O. HAS CONSIDERED THE TRANSACTIONS, THE NET RESULT ONLY WH ETHER INCOME OR LOSS CAN ONLY BE BROUGHT TO TAX AS A.O. C ANNOT IGNORE PART OF THE TRANSACTIONS AND BRING TO TAX OT HER PART. IN VIEW OF THIS, WE ARE NOT IN A POSITION TO APPRECIAT E THE STAND TAKEN BY THE A.O. IN DISALLOWING THE ENTIRE LOSS. W E APPROVE THE ORDER OF THE LD. CIT(A) AND REJECT THE REVENUE APPEAL. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 06.08.2014. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 06 TH AUGUST, 2014 VBP/- COPY TO 1. THE ITO, WARD 5(2), 6 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2. MR. JITENDRA KUMAR KANTILAL BHANDARI, 5-3-831/1, 2 & 3, TOPKHANA, GOSHAMAHAL, HYDERABAD. 3. CIT(A)-V, HYDERABAD 4. CIT-IV, HYDERABAD 7. D.R. A BENCH, ITAT, HYDERABAD.