M/S RENAATUS PROJECTS P LTD, ERODE V. DCIT CENTRAL CIRCLE 2 , COIMBATORE

ITA 1705/CHNY/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2721 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-06-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 18-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Section: 43(5)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO: 1705/CHNY/2018 / ASSESSMENT YEAR : 2013-14 M/S. RENAATUS PROJECTS (P) LTD., 156, MULLAMPARAPPU, N.G. PALAYAM, ERODE 638 115. [PAN: AADCR 1851J] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -2, COIMBATORE. ( / APPELLANT) ( / RESPONDENT) &' / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE *+&' / RESPONDENT BY : SHRI. SURESH PERIASAMY, JCIT ' /DATE OF HEARING : 14.06.2021 ' /DATE OF PRONOUNCEMENT : 21.06.2021 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 18, CHENNAI IN ITA NO. 290/1 6-17 DATED 06.03.2018 FOR THE ASSESSMENT YEAR 2013-14. :-2-: ITA NO: 1705/CHNY/2018 2. M/S. RENAATUS PROJECTS P. LTD., THE ASSESSEE, IN CURRED LOSS OF RS. 29,82,328/- FROM VARIOUS DERIVATIVE TRANSACTIONS CA RRIED OUT IN COMMODITIES ON THE MCX (ONE OF THE COMMODITY STOCK EXCHANGE) AND C LAIMED IT AS AN EXPENDITURE FOR THE ASSESSMENT YEAR 2013-14. WHI LE MAKING THE ASSESSMENT U/S. 143(3), THE AO DISALLOWED THE ASSESSEES CLAI M OBSERVING THAT COMMODITIES ARE NOT COVERED BY THE SECURITIES CONTRACTS (REGULA TION) ACT, 1956. THEREFORE, THEY ARE NOT COVERED BY THE PROVISIONS OF SECTION 4 3(5)(D) OF THE INCOME TAX ACT. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) DISMISSED THE APPEAL. AGGRIEVED AGAINST THAT ORDER , THE ASSESSEE FILED THIS APPEAL. 3. THE CASE WAS HEARD THROUGH VIDEO CONFERENCING. THE LD. AR INVITING OUR ATTENTION TO THE ORDER OF THE LD. CIT(A), WHEREIN T HE ADDITIONAL GROUNDS/SUBMISSIONS FILED BY THE ASSESSEE ARE EXTRA CTED , SUBMITTED THAT THE ASSESSEES TRANSACTIONS BY WAY OF COMMODITY DERIVA TIVES THROUGH RECOGNISED STOCK EXCHANGE WAS NOT TO BE TAXED AS SPECULATIVE I NCOME UP TO THE ASSESSMENT YEAR 2013-14 IN VIEW OF THE SECTION 43(5)(D) OF THE INCOME TAX ACT. SINCE, THE SUBJECT MATTER OF APPEAL IS RELATED TO AY 2013-14, CLAUSE (E) OF SECTION 43(5) IS NOT APPLICABLE. HOWEVER, THE LD. CIT (A) WITHOUT A DJUDICATING THIS SPECIFIC ASPECT, INVOKING S43(5)(E) DISMISSED THE APPEAL AN D HENCE THE AR PLEADED THAT THIS ISSUE MAY BE REMITTED BACK TO THE LD. CIT(A) F OR AN ADJUDICATION AS TO WHETHER THE ASSESSEES TRANSACTION IS COVERED U/S . 43(5)(D) OR NOT AS WAS :-3-: ITA NO: 1705/CHNY/2018 PLEADED IN ITS ADDITIONAL GROUNDS BEFORE THE LD. CI T(A). PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT TH E ASSESSEE HAS IN THE ADDITIONAL GROUNDS SPECIFICALLY PLEADED BEFORE THE LD. CIT(A) THAT THE IMPUGNED TRANSACTIONS UNDERTAKEN DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2013-14 IS FALLING WITHIN THE SCOPE OF SECTION 43(5 )(D) AND HENCE IT CANNOT BE TAXED AS A SPECULATIVE INCOME. WE FIND THAT THE LD . CIT (A) HAS NOT ADJUDICATED THIS MATTER. THEREFORE, WE REMIT THIS ISSUE BACK T O THE LD. CIT (A) FOR GIVING DUE OPPORTUNITY TO THE ASSESSEE AND DECIDE THE SPECIFI C GROUNDS TAKEN BY THE ASSESSEE IN ACCORDANCE WITH LAW. 5. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 21 ST JUNE, 2021 AT CHENNAI. SD/- ( . ' ) (DUVVURU RL REDDY) $% /JUDICIAL MEMBER SD/ - ( ) (S. JAYARAMAN) % /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED: 21 ST JUNE , 2021 JPV '*2343 /COPY TO: 1. & / APPELLANT 2. *+& /RESPONDENT 3. 5 ) ( /CIT(A) 4. 5 /CIT 5. 3* /DR 6. 8 /GF