Karan Discretionary Family Trust, Ahmedabad V. The Dy. CIT, Circle-6, Ahmedabad

ITA 1922/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6110 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 29-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Assessee Lawyers: S N SOPARKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 1922/AHD/2015 (ASSESSMENT YEAR: 2011-12) KARAN DISCRETIONARY FAMILY TRUST 722, SPRING VALLEY, NR. RAJPATH CLUB, S.G. HIGHWAY, AHMEDABAD-380051 V/S THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-6, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAATK3208N APPELLANT BY: SHRI S. N. SOPARKAR & PARIN SHAH, AR RESPONDENT BY : SHRI RAJESH MEENA, SR.D.R. ( )/ ORDER DATE OF HEARING : 08 -02-201 8 DATE OF PRONOUNCEMENT : 14-02-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-4, AHMEDABAD DATED 01.06.2015 PERTAINING TO A.Y. 2011- 12. ITA NO. 1922 /AHD/2015 . A.Y.2011-12 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE STANDS TAKEN BY THE A.O. R EGARDING ASSESSING BUSINESS LOSS OF RS. 17,53,206/- UNDER THE HEAD SHORT TERM C APITAL GAIN. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS DISCLOSED LOSS OF RS. 17,53,2 06/- ON TRADING IN SHARES. THE A.O. WAS OF THE FIRM BELIEF THAT THE SAME SHOULD HA VE BEEN OFFERED UNDER THE HEAD CAPITAL GAINS. THE A.O. TREATED THE SAID LOSS UNDER THE HEAD CAPITAL GAINS. 4. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY STATED THAT SINCE PAST MANY YEARS, THE ASSESSEE IS MAINTAINING TWO PORTFOL IOS :(I) FOR INVESTMENT IN SHARES AND (II) AS TRADING ASSETS. 6. IT IS THE SAY OF THE LD. COUNSEL THAT WHILE CONFIRM ING THE ASSESSMENT, THE LD. CIT(A) HAS WRONGLY INTERPRETED THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2006-07 TO A.Y. 2009-10. THE LD. COUN SEL POINTED OUT THAT IN THE SAID JUDGMENT, THE TRIBUNAL HAS ACCEPTED THAT THE A SSESSEE CAN LEGITIMATELY MAINTAINED TWO PORTFOLIOS ONE FOR INVESTMENT AND ON E FOR TRADING AND ANY PROFIT FOR THE INVESTMENT PORTFOLIO MUST BE TAXED U NDER THE HEAD CAPITAL GAINS. THE LD. COUNSEL CONCLUDED BY SAYING THAT THERE IS N O DENIAL THAT THE ASSESSEE IS HAVING TWO PORTFOLIOS BUT THE LOSS INCURRED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION IS FROM TRADING STOCK OF SHARES AND THEREFORE THE SAME SHOULD BE ALLOWED AS BUSINESS LOSS. ITA NO. 1922 /AHD/2015 . A.Y.2011-12 3 7. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FIN DINGS OF THE A.O. 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. EXHIBIT 14 IS THE BALANCE SHEET OF THE ASSE SSEE FROM WHICH IT CAN BE SEEN THAT THE ASSESSEE HAS SHOWN INVESTMENTS TO THE TUNE OF RS. 107.100 LACS. IT CAN ALSO BE SEEN THAT THE ASSESSEE HAS SHOWN INVENT ORIES AT RS. 26491838/-. THE INCOME FROM TRADING IN SHARES HAVE BEEN COMPUTE D AS UNDER:- SALES 38,458,988 LESS: COST OF SALES OPENING STOCK 2,165,265 ADD: PURCHASES 64,538,767 66704032 LESS: CLOSING STOCK 26,491,838 40,212,194 TOTAL RS. (51,753,206) 9. A PERUSAL OF THE AFORE-STATED FACTS CLEARLY SHOWS T HAT THE LOSS IS ON ACCOUNT OF TRADING STOCK AND THEREFORE THE SAME SHOULD BE TREA TED AS BUSINESS LOSS. WE ACCORDINGLY SET ASIDE THE FINDINGS OF THE LD. CIT(A ) AND DIRECT THE A.O. TO TREAT THE LOSS OF RS. 17,53,206/- AS BUSINESS LOSS OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 14- 02- 20 18 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 14/02/2018 RAJESH