VILARS ESTATES P. LTD, MUMBAI V. DCIT 3(3), MUMBAI

ITA 1701/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3602 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 12-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: R C JAIN
• Keywords: Depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI . . , / BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND . , SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER . / ITA NO.1701/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 VILARS ESTATES PRIVATE LIMTIED, THE INTERNATIONAL HOUSE, 4 TH FLOOR, 16 MK ROAD, CHURCHGATE, MUMBAI - 400 020 ! ! ! ! / VS. THE DCIT CIR. 3(3), AAYKAR BHAVAN, MK ROAD, MUMBAI. # ./ $% ./ PAN/GIR NO. : AAACV 5167A ( #& / APPELLANT ) .. ( '(#& / RESPONDENT ) #& ) / APPELLANT BY: SHRI R.C.JAIN '(#& * ) / RESPONDENT BY : SHRI O.P.MEENA ! * + / DATE OF HEARING : 06/06/2013 ,-' * + / DATE OF PRONOUNCEMENT : 06/06/2013 . / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER DATED 24/10/2011 OF LD. CIT(A)- 7 MUMBAI FOR ASSE SSMENT YEAR 2008-09. THE GROUNDS OF APPEAL READ AS UNDER: 1. THE ORDER OF THE CIT (A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. FOR THAT THE LEARNED CIT (A) ERRED IN LAW AND FA CTS IN CONFIRMING THE ORDER OF ASSESSING OFFICER DENYING THE CLAIM OF THE ASSESSEE WITH REGARD TO LOSS INCURRED . / ITA NO.1701/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 2 BY THE ASSESSEE ON PURCHASE AND SALE OF SHARES AMOU NTING TO RS.56,15,564/- AS BUSINESS LOSS. 3. FOR THAT THE LEARNED CIT (A) ERRED IN LAW AND FA CTS IN CONFIRMING THE ORDER OF ASSESSING OFFICER ASSESSING THE BUSINESS LOSS OF RS .56,15,564/-INCURRED BY THE ASSESSEE UNDER THE HEAD SHORT TERM CAPITAL LOSS, WI THOUT ALLOWING THE ALLOWING THE FOLLOWING EXPENSES: I) INTEREST PAID RS.38,O1,366/- II) ADMINISTRATIVE EXPENSES RS . 2,52,124/- III) DEPRECIATION RS. 1,19,360/- 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, VARY AND / OR WITHDRAW ANY OR ALL THE ABOVE GROUNDS OF APPEAL. 2. DURING THE YEAR UNDER CONSIDERATION, FOR THE FIR ST TIME THE ASSESSEE HAD APPLIED 47,61,900 SHARES OF RELIANCE POWER LTD. IN THE IPO THROUGH A FINANCE ARRANGEMENT ENTERED INTO WITH M/S. BAJAJ AUTO FINANCE LTD. IN RESPECT OF WHICH FINANCE CHARGES ARE PAID AMOUNTING TO RS.38,01,366/- AS UPFRONT A MOUNT. THE FUND RAISED FOR THIS PURPOSE WAS A SUM OF RS.49,99,99,500/-. THE ALLOTT ED SHARES WERE SOLD AND THIS ACTIVITY WAS CLAIMED TO HAVE GIVEN RISE TO INCOME UNDER THE HEAD INCOME FROM BUSINESS. THE A.O DID NOT ADMIT SUCH CLAIM OF THE ASSESSEE AND TREATED THE SAID GAIN AS GIVING RISE TO SHORT TERM CAPITAL GAIN/LOSS AND HAS COMPUTED SHORT TERM CAPITAL LOSS OF RS.14,42,814/-. THE AO DID NOT ALLOW ANY O THER EXPENDITURE ALONGWITH AFOREMENTIONED AMOUNT OF RS.38,01,366/-. THE ASSES SEE CHALLENGED SUCH ACTION OF AO BEFORE LD. CIT(A), WHO HAS HELD THAT THIS WAS A SINGLE ACTIVITY OF THE ASSESSEE AND ACCORDING TO THE FACTS OF THE CASE, ASSESSEE WAS TO BE CONSIDERED AS INVESTOR AND CANNOT BE CONSIDERED TO BE DEALER IN THE SHARES AND IN THIS MANNER LD. CIT(A) HAS UPHELD THE ACTION OF A.O. 3. AT THE TIME OF HEARING IT WAS THE CONTENTION OF LD. AR THAT IN THE ORDER OF LD. CIT(A) ITSELF THE ASSESSEE HAS MADE AN ALTERNATIV E CLAIM AS FOLLOWS: IN THE EVENT, YOUR HONOUR IS NOT INCLINED TO ALLO W THE MAIN GROUND OF APPEAL, IT IS SUBMITTED THAT THE A. 0. BE DIRECTED TO ALLOW THE I NTEREST OF RS.38,01,366/- UPTO THE DATE OF ACQUISITION OF SHARE AS COST AND THE AD MINISTRATIVE EXPENDITURE OF RS.3, 71,383/- INCLUDING DEPRECIATION BE DIRECTED T O BE ALLOWED AS DEDUCTION U/S. 48(2) OF THE ACT. IN SUPPORT OF THE CLAIM OF DEDUCT ION U/S. 48(2) RELIANCE IS PLACED ON THE DECISION OF BOMBAY HIGH COURT IN CASE OF CHI NOY & CO. PVT. LTD. - 206 ITR 616 HOLDING THAT 20% OF INTEREST INCOME ASSESSED UN DER OTHER SOURCE BE ALLOWED FOR MAINTAINING CORPORATE STRUCTURE. . / ITA NO.1701/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 3 LD. A.R IN THIS REGARD INVITED OUR ATTENTION TO PA GE-6 OF THE ORDER OF LD. CIT(A), WHERE THE WRITTEN SUBMISSIONS OF THE ASSESSEE HAVE BEEN REPRODUCED. IT WAS CLAIMED THAT LD. CIT(A) DID NOT CONSIDER SUCH SUBMI SSION AS THE SAID AMOUNT OF RS.38,01,366/- WAS ALLOWABLE AS COST OF ACQUISIT ION OF SHARES. HE, THEREFORE, PLEADED THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO PASS A SPEAKING ORDER ON ALL SUBMISSIO NS MADE BY THE ASSESSEE. 4. ON THE OTHER HAND, LD. D.R RELIED UPON THE ORDER PASSED BY A.O AND LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. WE FIND FORCE IN THE ARGUMENTS OF LD. A.R THAT LD. CIT(A) HAS DISPOSED OF THE GRIEVANCE OF THE ASSESSEE WITHOUT R EFERRING THE ALTERNATIVE SUBMISSIONS OF THE ASSESSEE. LD. CIT(A) IS REQUIRE D TO GIVE FINDING UPON SUCH SUBMISSIONS. THEREFORE, WE CONSIDER IT JUST AND PR OPER TO RESTORE THE ENTIRE ISSUE TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO RE-ADJUDICATE THE APPEAL FILED BY THE ASSESSEE BY WAY OF A SPEAKING ORDER ON EACH OF THE ARGUMENTS RAISED BY THE ASSESSEE. WITH THESE DIRECTIONS THE APPEAL IS RESTORED BACK TO THE FILE OF LD. CIT(A). 6. IN THE RESULT, FOR STATISTICAL PURPOSES THE APPE AL FILED BY THE ASSESSEE IS ALLOWED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 06/ 06/2013 . * ,-' / 0!1 06/06/2013 - * 2 3 SD/- SD/- ( . / D.KARUNAKARA RAO ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 0! DATED 06/06/2013 . / ITA NO.1701/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 4 . . . . * ** * '+45 '+45 '+45 '+45 65'+ 65'+ 65'+ 65'+ / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '(#& / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 582 '+! , , / DR, ITAT, MUMBAI 6. 2 9 / GUARD FILE. .! .! .! .! / BY ORDER, (5+ '+ //TRUE COPY// : :: : / ; ; ; ; $ $ $ $ (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ! . ./ VM , SR. PS