DCIT Cir, I, V. Shakumbhan Pulp & Papermills Ltd.,

ITA 1708/DEL/2008

• Counselvise Citation: 170820114 RSA 2008
• Duration Of Justice: 4 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-05-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 05-05-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UMESH CHANDRA DUBE
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI T.S. KAPOOR ITA NO. 1708/DEL/08 A.YR. 2005-06 DCIT CIR-1, VS. M/S SHAKUMBHARI PULP & PAPER MIL LS LTD. MUZAFFARNAGAR (UP) 4.5 TH KM STONE, BHOPA ROAD, MUZAFFARNAGAR (UP). PAN/ GIR NO.AABCS 9947E ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SH. UMESH CHANDRA DUBE SR. DR RESPONDENT BY : NONE O R D E R PER R.P. TOLANI, J.M: : THIS IS REVENUES APPEAL AGAINST CIT(A)S ORDER DA TED 11-02-2008 RELATING TO A.YR. 2005-06. 2. FOLLOWING GROUNDS ARE RAISED: 1. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS T HAT THE INCOME FROM COMMISSION AND PROFIT ON SHARE TRADING SHOULD BE TREATED AS BUSINESS INCOME INSTEAD OF INCOME FROM O THER SOURCES. 2. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS IG NORING THE FACT THAT AS SHARE TRADING & BUSINESS IS A SPEC ULATION INCOME AND NOT AS REGULAR INCOME OF THE BUSINESS. SO THE C HANGE OF HEAD IS RIGHTLY DONE BY THE ASSESSING OFFICER . 3. NONE PUT IN APPEARANCE ON BEHALF OF THE ASSESSEE AT THE HARING DESPITE ISSUE OF NOTICE FOR HEARING BY REGISTERED POST. WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE, QUA THE ASSESSEE, ON MERITS AND IN THAT PROCESS WE HAVE HEARD LD. DR AND GONE THROUGH THE MATERIAL AVAILABL E ON RECORD. 2 4. LD. DR CONTENDS THAT ASSESSING OFFICER HELD THE ABOVE INCOME TO BE INCOME FROM OTHER SOURCES BY FOLLOWING OBSERVATIONS : THE ASSESSEE COMPANY WAS, THEREFORE, REQUIRED TO F ILE DETAILS AND EVIDENCED REGARDING COMMISSION AND PROFIT ON SH ARE TRADING AND JUSTIFICATION OF OTHER INCOMES. IN THE REPLY FILED IT HAS BEEN CONTENDED THAT THE OTHER INCOME IS ACTUALL Y THE INCOME EARNED AS PER DETAILS GIVEN IN SCHEDULE 13 AND FUL LY VERIFIABLE FROM DOCUMENTARY EVIDENCE WHICH HAVE BEEN FILED AN D ARE PLACED ON RECORDS. ON GOING THROUGH THE DETAILS OF COMMISSION, IT IS SEEN THAT COMMISSION HAS BEEN EARNED ON THE ORDER FOR COMMUNICATION DEICES, WHICH IS NOT THE OBJECT OF TH E COMPANY. COMPANY MAIN OBJECT IS OF MANUFACTURING OF KRAFTS P APER AS CERTIFIED BY THE AUDITOR. HENCE INCOME EARNED FROM COMMISSION CAN NOT BE TREATED AS BUSINESS INCOME AN D WILL BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. SIMILARLY PROFIT ON SHARE TRADING WILL ALSO BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. AGAINST WHICH NO SET O FF OF LOSSES OF EARLIER YEARS WILL BE ALLOWED. 4.1. CIT(A) HAS PASSED A TOTALLY NON-SPEAKING ORDE R BY MERELY RELYING ON ITAT ORDER IN THE CASE OF M/S DOABA ROLLING MILLS PVT. LTD. WITHOUT GIVING ANY CITATION AND REFERENCE TO THE CONTENTS THEREOF, HAS HELD THE ASSESSEES INCOME TO BE BUSINESS INCOME, BY FOLLOWING OBSERV ATIONS: THE FACTS AND CIRCUMSTANCES OF THE CASE ARE SIMILA R TO THOSE OF M/S DOABA ROLLING MILLS PVT. LTD, M/S R.A. CASTING (P) LIMITED AND M/S BARNALA STEELS WHERE SIMILAR ISSUE HAS BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE BY THE UNDERS IGNED AS WELL AS BY THE HONBLE ITAT. FOLLOWING THE SAME REASONIN G, THE ASSESSING OFFICER IS DIRECTED TO ASSESS COMMISSION INCOME AND SHARE TRADING INCOME AS BUSINESS INCOME. 4.2. THE ORDER OF CIT(A) IS NON-SPEAKING WITHOUT G IVING ANY REASONS FOR DECISION. IN VIEW THEREOF THE SAME SHOULD BE REVERS ED. 3 5. AFTER HEARING LD. DR AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE CONSIDERED VIEW THAT THE ORDER PASSED BY CIT(A) AND RELIANCE OF ITAT IS WITHOUT ANY REFERENCE/ CITATION OR THE C ONTENTS OF THE ITAT. THERE IS NO MENTION AS TO HOW THE FACTS OF ASSESSEES CAS E AND ABOVE JUDGMENTS ARE ON PARITY. IN VIEW THEREOF, THE ORDER OF CIT(A) BE COMES NON-SPEAKING ORDER IN NATURE. CONSEQUENTLY, WE SET ASIDE THE SAME AND RESTORE BACK TO THE FILE OF CIT(A) FOR DECISION AFRESH BY PASSING A REASONED AN D SPEAKING ORDER IN ACCORDANCE WITH LAW. WE ORDER ACCORDINGLY. 6. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN OPEN COURT ON 13-07-2012. SD/- SD/- ( T.S. KAPOOR ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13-07-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 4