BSI CAPITAL AND FINANCE LTD, MUMBAI V. DCIT CIR 3(1), MUMBAI

ITA 1814/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3029 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 15-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMIR TEKRIWALDR BSI CAPITAL; FINANCE LTD
• Keywords: Principle of natural justice
• Section: 14A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1814/MUM/2012 ASSESSMENT YEAR 2008-09 M/S BSI CAPITAL & FINANCE LTD., 34A, NARIMAN BHAVAN, NARIMAN POINT, MUMBAI-400021 / VS. DY. COMMISSIONER OF INCOME TAX-3(1), ROOM NO.607, AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400020 ( !' # /ASSESSEE) ( $ / REVENUE) PAN. NO.AAACB2298J ITA NO.2479/MUM/2012 ASSESSMENT YEAR 2008-09 DY. COMMISSIONER OF INCOME TAX-3(1), ROOM NO.607, AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400020 / VS. M/S BSI CAPITAL & FINANCE LTD., 34A, NARIMAN BHAVAN, NARIMAN POINT, MUMBAI-400021 ( $ / REVENUE) ( !' # /ASSESSEE) PAN. NO.AAACB2298J !' # / ASSESSEE BY SHRI PARESH SHAPARIA $ / REVENUE BY SHRI SAMIR TEKRIWAL-DR BSI CAPITAL & FINANCE LTD. ITA NO.1814/MUM/2012 & 2479/MUM/2012 2 $% & # ' / DATE O F HEARING : 15/10/2015 & # ' / DATE OF ORDER: 15/10/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE AS WELL AS THE REVENUE IS IN CROSS AP PEALS, AGGRIEVED BY THE IMPUGNED ORDER DATED 17/01/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI. IN THE APPEAL O F THE ASSESSEE, THE ISSUE PERTAINS TO DISALLOWANCE OF PRO PORTIONATE INTEREST OF RS.9,75,496/- U/S 36(1)(III) OF THE INC OME TAX ACT, 1961 (HEREINAFTER THE ACT), NET BUSINESS LOSS OF RS.45,49,104/- ON ACCOUNT OF F & O COMMODITIES PROF IT AND SHARE TRADING LOSS WHICH WAS CONSIDERED AS SPECULAT ION LOSS AND DISALLOWANCE U/S 14A READ WITH RULE 8D OF THE R ULES. WHEREAS, IN THE APPEAL OF THE REVENUE, THE ADDITION OF RS.9,75,496/-, DELETED BY THE LD. COMMISSIONER OF I NCOME TAX (APPEALS) MADE ON ACCOUNT OF PROPORTIONATE DISA LLOWANCE OF INTEREST U/S 36(1)(III) HAS BEEN CHALLENGED. 2. DURING HEARING OF THESE APPEALS, THE LD. COUNSE L FOR THE ASSESSEE, CONTENDED THAT THE ASSESSEE IS TRADIN G IN SHARES/COMMODITIES AND ALSO IN MUTUAL FUNDS, EARNED DIVIDEND INCOME OF RS.3,75,338/- AND ASSESSEE ITSEL F DISALLOWED 10% OF THE DIVIDEND INCOME. OUR ATTENTI ON WAS INVITED TO PAPER BOOK PAGE 17 BY CLAIMING THAT OUT OF THE TOTAL INTEREST OF RS.1,25,95,277/-, THE INTEREST WI TH RESPECT TO LAST FOUR ENTITIES ARE NBFC INCLUDING LAST ONE BROK ER, THUS, NO DIVIDEND INCOME AROSE FROM RS.43,75,415/- AND FO R THE BSI CAPITAL & FINANCE LTD. ITA NO.1814/MUM/2012 & 2479/MUM/2012 3 REMAINING FOUR ITEMS (RS.82,19,862/-), INTEREST INC OME IS RS.27,20,439/- IS OUT OF FIXED DEPOSITS ON WHICH NE TTING OFF INTEREST SHOULD HAVE BEEN GIVEN. ON THE OTHER HAND , THE LD. DR, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUG NED ORDER TO THE EXTENT WHICH WAS DENIED TO THE ASSESSE E AND FOR THE REMAINING (WHICH WAS GRANTED TO THE ASSESSEE), THE LD. DR CHALLENGED THE SAME ON THE REASONING CONTAINED IN T HE GROUND RAISED BY THE REVENUE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OB SERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION M ADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY TH E LD. RESPECTIVE COUNSEL, IF KEPT IN JUXTAPOSITION AND AN ALYZED, WE FIND THAT THE ASSESSEE FILED A PAPER BOOK RUNNING I NTO 32 PAGES FROM WHICH DOCUMENTS FROM SERIAL NUMBER 5 TO 8 WERE NEITHER FILED BEFORE THE ASSESSING OFFICER NOR BEFO RE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), EVEN THE COPY OF COMPUTATION OF INCOME WAS ALSO NOT FILED BEFORE TH E LD. FIRST APPELLATE AUTHORITY. AS PER THE LD. REPRESENTATIVE FROM BOTH SIDES, ALL THESE DOCUMENTS GO TO THE ROOTS OF THE M ATTER. WE FURTHER NOTE THAT THE LEDGER OF INDIA INFOLINE MARG IN FUNDING, LEDGER OF KOTAK MAHINDRA INVESTMENT LTD., LEDGER OF KOTAK SECURITIES LTD., LEDGER OF J. M. FINANCE LTD. (MARG IN FUNDING) AND COPY OF COMPUTATION OF INCOME WAS NOT PRODUCED BEFORE THE AUTHORITIES BELOW, THEREFORE, KEEPING IN VIEW, THE PRINCIPLE OF NATURAL JUSTICE, AND FURTHER NO GRIEVANCE IS CAU SED TO BSI CAPITAL & FINANCE LTD. ITA NO.1814/MUM/2012 & 2479/MUM/2012 4 EITHER SIDE. EVEN OTHERWISE, THE MANDATE OF THE CO NSTITUTION IS TO LEVY AND COLLECT DUE TAXES AND THE DOCUMENTS WHICH WERE RELIED UPON BY THE ASSESSEE BEFORE US GO TO TH E ROOT OF THE MATTER. THE ASSESSEE IS AT LIBERTY TO FURNISH E VIDENCE IN SUPPORT OF ITS CLAIM ALONG WITH CASE LAWS BEFORE TH E LD. ASSESSING OFFICER. THE ASSESSEE BE GIVEN OPPORTUNI TY OF BEING HEARD. AS AGREED FROM BOTH SIDES, WE REMAND THESE APPEALS TO THE FILE OF THE LD. ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE AFRESH AND DECIDE IN ACCORDANCE WITH L AW, THUS, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOS ES. FINALLY, THE APPEAL OF THE ASSESSEE AS WELL AS OF T HE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 15/10/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 15/10/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1# ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1# / CIT(A)- , MUMBAI 5. 3$4 .# , 0 *+' * 5 , % / DR, BSI CAPITAL & FINANCE LTD. ITA NO.1814/MUM/2012 & 2479/MUM/2012 5 ITAT, MUMBAI 6. 6! 7% / GUARD FILE. / BY ORDER, /3+# .# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI.