DCIT, Circle-3, Kolkata, Kolkata V. M/s Meghna Commercial Co. Ltd., Kolkata

ITA 1794/KOL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4129 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2016
• Appeal Filed By: Department
• Bench Allotted: SMC
• Next Hearing Date: 07-09-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 15-09-2014
• Court: TRIBUNAL
• Department Lawyers: MD GHAYAS UDDIN
• Assessee Lawyers: S M SURANA
• Keywords: Assessment record
• Section: 143(3); 154

Judgement Text

1 ITA NO.1794/KOL/2014 MEGHNA COMMERCIAL CO. LTD., AY 2006-07 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI S. S. VISWAN ETHRA RAVI, JM] I.T.A NO. 1794/KOL/2014 ASSESSMENT YEAR: 2006-07 DEPUTY COMMISSIONER OF INCOME-TAX, VS. M/S. MEGHN A COMMERCIAL CO. LTD. CIRCLE-3, KOLKATA. (PAN: AADCM1182B) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 22.11.2016 DATE OF PRONOUNCEMENT: 02.12.2016 FOR THE APPELLANT: MD. GHAYAS UDDIN, JCIT, SR. DR FOR THE RESPONDENT: SHRI S. M. SURANA, ADVOCAT E ORDER PER SHRI M. BALAGANESH, AM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-I, KOLKATA VIDE APPEAL NO. 308/CIT(A)-I/CIRCLE-3/2008-09 DATED 08.05.2014. ASS ESSMENT WAS FRAMED BY DCIT, CIRCLE- 3, KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2006-07 VIDE HIS ORDER DATED 16.12.2008. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS W ITH REGARD TO THE TREATMENT OF RS.99.05.050/- AND RS.21,88,420/- AS TRADING PROFIT S OR LONG TERM AND SHORT TERM CAPITAL GAINS RESPECTIVELY. 2.1. THE BRIEF FACTS OF THIS ISSUE ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE AO THOUGH ELABORATELY DISCUSSED ABOUT THE TREATMENT OF LONG TERM AND SHORT TERM CAPITAL GAINS OF RS.99.05.050/- AND RS.21,88,420/- RESPECTIVELY T O BE TREATED AS TRADING PROFITS OF THE ASSESSEE BY CONSTRUING THE ASSESSEE AS A TRADER IN SHARES, DID NOT RESORT TO MAKE ANY ADDITION THEREON IN THE COMPUTATION OF TAX LIABILITY. SINCE THE ASSESSEE WAS AGGRIEVED TO BE CONSTRUED AS TRADER IN SHARES, THE ASSESSEE CONTESTED THE SAM E BEFORE THE LD. CIT(A) WHO CONCLUDED THAT NO ADDITION WAS MADE BY THE AO AND EVEN ON FAC TS, THE ASSESSEE NEEDS TO BE TREATED ONLY AS AN INVESTOR AND ACCORDINGLY, THE GAINS DERI VED THEREON IN THE SUMS OF RS.99,05,050/- 2 ITA NO.1794/KOL/2014 MEGHNA COMMERCIAL CO. LTD., AY 2006-07 AND RS.21,88,420/- RESPECTIVELY ARE TO BE TREATED O NLY AS LONG TERM AND SHORT CAPITAL GAINS AND ALLOWED THE APPEAL OF THE ASSESSEE. 2.2. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 1. WHETHER THE LD. CIT(A) HAS ERRED IN FACTS AND L AW BY HOLDING THAT THE AMOUNT OF RS.99,05,050/- AND RS.21,88,420/- ARE LONG TERM AND SHORT TERM CAPITAL GAINS RESPECTIVELY AND NOT TRADING PROFITS. 2. WHETHER THE LD. CIT(A) HAS ERRED IN FACTS AND L AW BY HOLDING THAT THE PROFITS FROM THE SHARE INVESTMENT IS CAPITAL GAIN WHILE ACTUALLY THE ASSES SEE IS INTO THE PRIMARY BUSINESS OF SHARE TRADING AND HAS HIGH FREQUENCY AND MULTIPLICITY OF OPERATION FROM THE SAME DEMAT ACCOUNT OF THEN SHARE INVESTMENTS AND CLEAR THE INTENTION OF T HE ASSESSEE WAS TO EARN PROFITS AND NOT EARNING OF DIVIDENDS AND ARE ACTUALLY TRADING PROFI TS. 2.3. THE LD DR WAS DIRECTED TO BRING THE ASSESSMEN T RECORDS IN THIS REGARD TO VERIFY WHETHER ANY ACTION U/S. 154 OF THE ACT WAS RESORTED TO BY THE AO FOR TREATING THE ASSESSEE AS A TRADER AND MAKING THE ADDITIONS IN RESPECT OF THE SE GAINS AS TRADING PROFITS WHICH WOULD HAVE CONSEQUENTIAL IMPACT IN THE TAX LIABILITY OF T HE ASSESSEE. ACCORDINGLY, THE CASE WAS ADJOURNED ON SEVERAL OCCASIONS. ON THE FINAL DATE OF HEARING ON 22.11.2016 THE LD. DR PRODUCED A LETTER FROM THE AO EXPRESSING THE INABIL ITY TO PRODUCE THE RELEVANT ASSESSMENT RECORDS. 2.4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THRO UGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE FACTS STATED HEREINABOVE REMAIN UNDISPUT ED AND HENCE, THE SAME ARE NOT REITERATED FOR THE SAKE OF BREVITY. DURING THE COURSE OF HEAR ING THE LD. DR FILED A LETTER DATED 16.11.2016 FROM THE AO EXPRESSING THE INABILITY TO PRODUCE THE ASSESSMENT RECORDS. THE LD. AR ALSO ARGUED THAT NO ACTION U/S. 154 OF THE A CT WAS RESORTED TO BY THE REVENUE IN THE INSTANT CASE. IN THE ABSENCE OF ANY CONTRARY EVIDE NCE TO THIS PRODUCED BY THE REVENUE, WE DO NOT FIND ANY MERIT IN THE GROUNDS RAISED BY THE REV ENUE AND DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND HENCE, THE APPEAL OF RE VENUE IS DISMISSED. 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 02.12.201 6 SD/- SD/- (S.S. VISWANETHRA RAVI) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED : 2 ND DECEMBER, 2016 JD.(SR.P.S.) 3 ITA NO.1794/KOL/2014 MEGHNA COMMERCIAL CO. LTD., AY 2006-07 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT DCIT, CIRCLE-3, KOLKATA. 2 RESPONDENT M/S. MEGHNA COMMERCIAL CO. LTD., 1 ST FLOOR, P-16, NEW CIT ROAD, KOLKATA-700 073. 3 . TH E CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .