Stenly Securities Limited , Kolkata V. DCIT, Circle - 5, Kolkata , Kolkata

ITA 1719/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6897 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 24-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHANKAR HALDER SRDR
• Assessee Lawyers: MANISH TIWARI
• Keywords: Principle of natural justice; Transactions in derivatives; Set aside
• Section: 14A

Judgement Text

1 ITA NO.1719/KOL/2017 M/S. STENLY SECURITIES LIMITED AY- 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH, C AT KOLKATA () . . , . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1719/KOL/2017 ASSESSMENT YEAR: 2009-10 M/S. STENLY SECURITIES LIMITED [PAN: AADCS 6016 J] VS. DCIT, CIRCLE 5, KOLKATA APPELLANT RESPONDENT DATE OF HEARING 12.02.2019 DATE OF PRONOUNCEMENT 01.05.2019 FOR THE APPELLANT SHRI MANISH TIWARI, FCA FOR THE RESPONDENT SHRI SHANKAR HALDER, SR. DR, JC IT ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) 2, KOLKATA DATED 02.05.2017 FOR ASSESSMENT YEAR 2009-1 0. 2. AT THE OUTSET ITSELF, THE LEARNED COUNSEL FOR TH E ASSESSEE BROUGHT TO OUR NOTICE THAT THE ASSESSEE IN FACT HAD RAISED TWO ISSUES BEFORE THE L D. CIT(A) ONE WAS REGARDING DISALLOWANCE U/S 14A AND SECOND ISSUE WAS IN RESPEC T OF DISALLOWANCE OF LOSS OF RS. 4,30,709/- ON F&O DERIVATIVES. IT WAS POINTED OUT T HAT THE LD. CIT(A) HAS NOT ADJUDICATED THE SECOND ISSUE THAT IS IN RESPECT OF DISALLOWANCE OF LOSS OF RS. 4,30,709/- ON F& O DERIVATIVES. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. WE NOTE THAT THE LD. CIT(A) HAS DISPOSED OF THE APPEAL BY AN ORDER CONSI STING OF TWO PAGES WHICH IS PER-SE A CRYPTIC ORDER. IT IS NOTED THAT GROUND NO. 1 BEFORE THE LD. CIT(A) IS REGARDING DISALLOWANCE U/S 14A AND GROUND NO. 2 AS PER THE LD. CIT(A) ALSO IS REGARDING DISALLOWANCE UNDER 14A WHEREAS THE GROUND NO.2 PREFERRED BEFORE A.O IS REG ARDING DISALLOWANCE OF LOSS OF RS.4,30,709/- ON F&O DERIVATIVES. WE NOTE THAT THE LD. CIT(A) HAS WITHOUT APPLICATION OF MIND HAS NOT ADJUDICATED THE GROUND NO.2 RAISED BY THE ASSESSEE AND HAS ANSWERED BOTH GROUND NO.1 & 2 IDENTICALLY WHICH IS NOTHING BUT CU T AND PASTE EXERCISE, WHICH ACTION/OMISSION OF LD CIT(A) CANNOT BE COUNTENANCED . THE REASON JUSTIFYING UPHOLDING 2 ITA NO.1719/KOL/2017 M/S. STENLY SECURITIES LIMITED AY- 2009-10 THE DECISION OF THE ASSESSING OFFICER IN RESPECT TO DISALLOWANCE UNDER 14A HAS NOT BEEN SPELT OUT. IT SHOULD BE KEPT IN MIND THAT REASON IS SOUL OF ANY DECISION & IS THE HEART-BEAT OF EVERY CONCLUSION, ESPECIALLY THAT OF JUDICIAL/QUASI JUDICIAL AUTHORITY LIKE CIT(A) OR A.O. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF THE LD. CIT(A) TO DECIDE THE GROUNDS OF APPEAL R AISED BEFORE HIM AND TO PASS A SPEAKING ORDER. IT HAS TO BE KEPT IN MIND THAT THE LD. CIT(A ) WHO IS FIRST APPELLATE AUTHORITY IS BOUND TO GIVE REASON FOR HIS CONCLUSION. IT IS THE DUTY A ND OBLIGATION ON THE PART OF THE LD. CIT(A) TO RECORD REASONS WHILE DISPOSING OF THE APPEAL. TH E REASONS HAVE TO BE DISCLOSED AND WE INSISTED UPON IT SINCE IT IS ONE OF THE FUNDAMENTAL OF SOUND ADMINISTRATION OF JUSTICE DELIVERY SYSTEM TO MAKE IT KNOWN THAT THERE HAD BEE N PROPER AND DUE APPLICATION OF MIND TO THE ISSUE BY THE LD. CIT(A) AND ALSO AN ESSENTIAL R EQUISITE OF THE PRINCIPLES OF NATURAL JUSTICE. THE REASON IS HEART BEAT OF EVERY CONCLUSI ON. IT INTRODUCES CLARITY IN AN ORDER AND WITHOUT THE SAME, THE ORDER BECOME LIFELESS. REASON S SUBSTITUTES SUBJECTIVITY WITH OBJECTIVITY. THE ABSENCE OF REASONS RENDERS AN ORDE R INDEFENSIBLE/ UNSUSTAINABLE PARTICULARLY WHEN THE ORDER IS SUBJECT TO FURTHER C HALLENGE BEFORE A HIGHER FORUM. AND EVERY JUDICIAL / QUASI JUDICIAL ORDER MUST BE SUPPO RTED BY REASONS RECORDED IS WRITING. IT ENSURES TRANSPARENCY AND FAIRNESS IN DECISION MAKIN G AS OPPOSED TO ARBITRARY AND WHIMSICAL ACTION. THE PERSON WHO IS ADVERSELY AFFECTED MUST K NOW WHY HIS APPEAL /APPLICATION HAS BEEN REJECTED. FOR THE AFORESAID OBSERVATION WE REL Y UPON THE HONBLE SUPREME COURT OBSERVATION IN THE STATE OF ORISSA VS DHANIRAM LUHI R AIR 2004 (SC) 1794. THEREFORE, THE OMISSION ON THE PART OF LD. CIT(A) TO RENDER REASON S WHILE ADJUDICATING THE GROUND NO.1 IS TREATED AS SERIOUS DEFECT AND NON ADJUDICATION OF G ROUND NO. 2 AS DISCUSSED ABOVE SHOWS TOTAL NON-APPLICATION OF MIND. THEREFORE, WE DIRECT THE LD. CIT(A) TO PASS A REASONED ORDER WHILE DISPOSING OF BOTH THE GROUNDS RAISED BEFORE H IM AFTER HEARING THE ASSESSEE AND IN ACCORDANCE WITH LAW. 4. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER IS PRONOUNCED IN THE OPEN COURT ON 1ST MAY, 2019 SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1ST MAY, 2019 3 ITA NO.1719/KOL/2017 M/S. STENLY SECURITIES LIMITED AY- 2009-10 BISWAJIT (SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. STENLY SECURITIES LIMITED, 15B, CL IVE ROW, KOLKATA 700 001. 2 RESPONDENT DCIT, CIRCLE 5, P-7, CHOWRINGHEE SQUAR E, KOLKATA 700 069. 3 . THE CIT(A), 4. 5. CIT , DR, / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR/H.O.O ITAT, KOLKATA 4 ITA NO.1719/KOL/2017 M/S. STENLY SECURITIES LIMITED AY- 2009-10