Shahi Property Developers Pvt. Ltd., Ahmedabad V. The Income tax Officer, Ward-8(3), Ahmedabad

ITA 2030/AHD/2005

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8972 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 10-09-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 07-09-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV AGARWAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Business income; Cost of acquisition; Date of conversion; Speculation loss; Capital Gains
• Section: 45(2)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGARWAL, A.M.) I.T.A. NO. 2030/AHD./2005 ASSESSMENT YEAR : 2001-2002 SHAHI PROPERTY DEVELOPERS PVT. LTD., -VS.- INC OME TAX OFFICER, WARD-8(3), AHMEDABAD AHMEDABAD (P.A. NO. AACCS 1165 H) (APPELLANT) (R ESPONDENT) APPELLANT BY : SHRI S.N. SOPARKAR RESPONDENT BY : SHRI RAJEEV AGARWAL, CI T(D.R.) O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THE ASSESSEE HAS FILED THIS APPEAL FOR THE ASSESS MENT YEAR 2001-02 AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS) DATED 16.06 .2005 ON THE FOLLOWING GROUNDS :- (1) IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LD. COMMISSIONER OF INCOME TAX(APPEALS)HAS GROSSLY ERRED IN UPHOLDING THE ASSESSING OFFICERS ACTION OF INVOKIN G THE EXPLANATION BELOW SECTION 73 AND DEEMING THE NORMAL BUSINESS LO SS OF RS.3,30,00,000/- AS SPECULATION LOSS. (2) WITHOUT PREJUDICE TO THE FOREGOING, IN LAW AND IN T HE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT TO HAVE APPRECIATED THE T RUE PURPOSE FOR WHICH THE PROVISIONS OF SECTION 45(2) HAD BEEN ENAC TED AND WHICH, AS SPECIFICALLY POINTED OUT BY THE APPELLANT IN ITS WR ITTEN SUBMISSIONS DATED 1.7.2005 BEFORE HIM, HAD BEEN ELABORATELY EXP LAINED IN THE CBDT CIRCULAR NO. 204 DATED 24.7.1976, AND DISAPPRO VED OF THE ACTION OF ASSESSING OFFICER OF SUBJECTING THE APPEL LANT TO ASSESSMENT OF A SHORT TERM CAPITAL GAIN OF RS.34,80,000 BY TAKING RECOURSE TO SECTION 45(2) ON THE ONE HAND AND SIMULTANEOUSLY DEEMING TH E APPELLANTS NORMAL BUSINESS LOSS RESULTING FROM DELIVERY BASED TRANSACTIONS, AS SPECULATION LOSS AFTER INVOKING THE PROVISIONS OF T HE EXPLANATION BELOW SECTION 73 AND THEREBY MAKING THE APPELLANT PAY TAX ON A NOTIONAL SHORT TERM CAPITAL GAIN WITH A CORRESPONDINGLY HIGH ER QUANTUM OF DEEMED SPECULATION LOSS WHICH, IN THE ABSENCE OF AD EQUATE SPECULATION PROFIT THIS YEAR WAS BOUND TO HAVE TO BE CARRIED FO RWARD IN THE PECULIAR FACTS OF THE APPELLANTS CASE. 2 (3) WITHOUT PREJUDICE TO THE FOREGOING IN LAW AND IN TH E FACTS AND CIRCUMSTANCES OF T5HE APPELLANTS CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS GROSSLY ERRED IN UPHOLDING THE ASSESSING OFFICERS ACTION OF DEEMING THE LOSS OF RS.3,30,00, 000/- FROM THE TRANSACTIONS OF 2,00,000 SHARES OF ADANI EXPORTS LT D. AS SPECULATION LOSS AFTER INVOKING THE PROVISIONS OF THE EXPLANATI ON BELOW SECTION 73 EVEN AS HE HAD ASSESSED THE NOTIONAL PROFIT OF RS.3 4,80,000/- ON THE CONVERSION OF THOSE VERY SHARES FROM INVESTMENT T O STOCK-IN-TRADE S SHORT TERM CAPITAL GAIN U/S. 45(2) OF THE I.T. ACT, 1961. (4) WITHOUT PREJUDICE TO THE FOREGOING IN LAW AND IN TH E FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT TO HAVE APPRECIATED THE A PPELLANTS BONAFIDES IN THE MATTER OF SHOWING IN ITS RETURN SH ORT TERM CAPITAL GAIN OF RS.34,80,000/- ON THE ONE HAND AND A CORRESPONDI NGLY HIGHER QUANTUM OF NORMAL BUSINESS LOSS OF RS.3,30,00,000/- FROM THE DELIVERY BASED TRANSACTIONS IN THE SHARES IN QUESTION ON THE OTHER HAND, EVEN AS THE FACTS OF THE APPELLANTS CASE AS ELABORATELY EX PLAINED IN ITS WRITTEN SUBMISSIONS DATED 7.1.2005 BEFORE HIM, WARRANTED CO MPUTATION OF THE QUANTUM OF THE APPELLANTS LOSS ON ITS DELIVERY BAS ED TRANSACTIONS IN THE SHARES OF ADANI EXPORTS LTD. IN QUESTION BASED ON THEIR ACTUAL COST OF ACQUISITION AND GRANTED ONE OF THE TWO ALTERNATI VE PLEAS MADE BY THE APPELLANT VIDE PARA 11 OF ITS WRITTEN SUBMISSIONS B EFORE HIM. (5) IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS GRO SSLY ERRED IN DISMISSING THE APPELLANTS GROUND OF APPEAL NO. 3 B EFORE HIM READING AS UNDER (EMPHASIS NOW SUPPLIED). 3. IN LAW AND IN THE FACTS AND THE CIRCUMSTANCES OF THE APPELLANTS CASE THE LD. ASSESSING OFFICER H AS ERRED IN DISALLOWING AMORTIZATION EXPENSES OF RS.84,500/- U/S. 35D OF THE ACT. THE ASSESSEE HAS CLAIMED RS.16,900/- BEING 1/5 TH OF RS.84,500/- U/S. 35D OF THE ACT. THE ASSESSING OFFICER HAS, HOWEVER, DISALLOWED RS.84,500/-. THE DISALLOWANCE IS NOT CAL LED FOR. IT MAY BE DELETED. 2. AT THE TIME OF HEARING, SHRI S.M. SOPARKAR, LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE CONTENDED WITH REGARD TO GROUNDS NO. 1 TO 4 OF THE APPEAL THAT THE CONTROVERSY INVOLVED NOW IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE B Y THE DECISION OF HON'BLE ITAT, MUMBAI 3 BENCH H (SPECIAL BENCH) IN THE CASE OF ACIT, SPEC IAL BENCH-18(1) VS.- CONCORD COMMERCIALS (P) LTD. 3. FOR THE PURPOSE OF EXPLAINING THE FACTS OF T HE CASE, THE LEARNED COUNSEL OF THE ASSESSEE HAS SUBMITTED A CHART SHOWING VARIOUS TRANSACTION S OF DEALING IN SHARES, WHICH IS REPRODUCED AS UNDER : SR. NO. DATE PARTICULARS AMOUNT 1. 28/03/2000 ASSESSEE PURCHASED 2,00,000 SHARES @ RS. 747.60/- PER SHARE 2,00,000 747.60 = SHOWN AS INVESTMENT IN BALANCE SHEET 14,95,20,000 2. 01/04/2000 ASSESSEE CONVERTED THOSE 2,00,000 SHA RES INTO STOCK IN TRADE AT THE PREVAILING RATE OF RS. 765/- PER SH ARE 2,00,000 765 = HELD AS STOCK IN TRADE 15,30,00,000 3. 4. 5. 26/05/2000 01/04/2000 ASSESSEE SOLD THOSE 2,00,000 SHARES @ RS. 600/- PER SHARE RECEIVED RECEIVED SALE CONSIDERATION OF RS. 12,00,00,000/- INCURRED BUSINESS LOSS OF RS. 3,30,00,000/- CONVERSION COST 15,30,00,0 00 SALE CONSIDERATION - 12,00,00,0 00 BUSINESS LOSS 3,30, 00,000 INCURRED SHORT TERM CAPITAL GAIN CONVERTED COST 15,30,00,00 0 ACTUAL COST - 14,95,20, 000 SHORT TERM CAPITAL GAIN 34,80,000 ASSESSEE ADJUSTED SHORT TERM CAPITAL GAIN AGAINST BUSINESS LOSS AS PER PROVISIONS OF SECTION 71 (2) BUSINESS LOSS AS PER SR.NO. 3 3,30,00,000 3,30,00,000 34,80,000 4 LESS: SHORT TERM CAPITAL GAIN 34,80,000 NET BUSINESS LOSS 2,95,20,0 00 2,95,20,000 4. THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT THE ASSESSING OFFICER HAS TREATED BUSINESS LOSS INCURRED BY THE ASSESSEE OF RS.3,30,00,000 RE SULTING FROM THE DELIVERY BASED TRANSACTIONS (AS PER SR.NO.3 OF THE CHART) AS SPECULATION LOSS AFTER INVOKING THE PROVISIONS OF EXPLANATION BELOW SECTION 73 OF THE I.T. ACT. THE SECOND GRI EVANCE OF THE ASSESSEE IS OF TAXING SHORT TERM CAPITAL GAIN OF RS.34,80,000 WHICH HAS ARISEN ON ACCOUNT OF CONVERSION OF SHARES IN TO STOCK- IN-TRADE ON 1.4.2000 AND ON THE SAME SHARES SOLD ON 26.5.2000. THE SAID SHORT TERM CAPITAL GAIN IS WORKED OUT AS UNDER : CONVERSION COST OF INVESTMENT INTO STOCK-IN-TRADE [SR.NO.4 OF THE CHART] 15,30,00,000 LESS: ACTUAL COST OF THE SHARES HELD AS INVESTMENT 14,95,20,000 ------------------ SHORT TERM CAPITAL GAIN : 34,80,000 ========== 5. THE LEARNED COUNSEL OF THE ASSESSEE POINTED O UT THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TREATING THE NORMAL BUSINESS LOSS O F RS.3,30,00,000 AS SPECULATION LOSS BECAUSE THE ASSESSEES CASE DOES NOT FALL INTO EXPLANATION TO SECTION 73 OF THE I.T. ACT. THE SAID EXPLANATION BELOW SECTION 73 IS REPRODUCED BEL OW : EXPLANATION.- WHERE ANY PART OF THE BUSINESS OF A COMPANY (OTHER THAN A COMPANY WHOSE GROSS TOTAL INCOME CONSISTS MAINLY OF INCOME WHICH IS CHARGEABLE UNDER THE HEADS INTEREST ON SECURITIE S, INCOME FROM HOUSE PROPERTY, CAPITAL GAINS AND INCOME FROM OTHER SOURCES, OR A COMPANY THE PRINCIPAL BUSINESS OF WHICH IS THE BUSINESS O F BANKING OR THE GRANTING OF LOANS AND ADVANCES) CONSISTS IN THE PURCHASE AND SALE OF SHARES OF OTHER COMPANIES, SUCH COMPANY SHALL, FOR THE PURPOSES O F THIS SECTION, BE DEEMED TO BE CARRYING ON A SPECULATION BUSINESS TO THE E XTENT TO WHICH THE BUSINESS CONSISTS OF THE PURCHASE AND SALE OF SUCH SHARES. 5 6. IT WAS ARGUED BY THE LEARNED COUNSEL OF THE ASSE SSEE THAT EXPLANATION HAS PROVIDED TWO EXCEPTIONS. THE FIRST EXCEPTION IS AVAILABLE IN THE CASE OF AN ASSESSEE WHOSE GROSS TOTAL INCOME CONSISTS MAINLY OF INCOME WHICH IS CHARGEABLE UNDER THE HEADS INTEREST ON SECURITIES, INCOME FROM HOUSE PROPERTY, CAPITAL GAINS AND INCOME F ROM OTHER SOURCES. THE SECOND EXCEPTION IS IN THE CASE OF AN ASSESSEE WHOSE PRINCIPAL BUSINESS IS THE BUSINESS OF BANKING OR THE GRANTING OF LOANS AND ADVANCES. 7. THE FIRST CATEGORY OF EXCEPTION IS IDENTIFIED B Y THE COMPOSITION OF ITS GROSS TOTAL INCOME. THE WORDS USED IN THE STATUTE PROVIDE THRUST ON THE COMPOSITION OF THE GROSS TOTAL INCOME OF THE ASSESSEE. IF THE GROSS TOTAL INCOME OF THE ASSESSEE MAINLY CONSISTS OF INCOME FALLING UNDER THE ABOVE MENTIONED HEADS, EXPLANATION TO SECTION 73 DO ES NOT APPLY. IF THE GROSS TOTAL INCOME OF THE ASSESSEE IS MAINLY MADE UP OF INCOME UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, IT IS CAUGHT BY THE MISCHIEF OF EXPLAN ATION TO SECTION 73. 8. WITH REGARD TO SECOND CATEGORY OF EXCEPTION, THE LD. COUNSEL OF ASSESSEE SUBMITTED THAT IF THE PRINCIPAL BUSINESS IS THE BUSINESS OF BANKING O R THE GRANTING OF LOANS AND ADVANCES, EXPLANATION TO SECTION 73 DOES NOT APPLY. THE ASSES SEE IS EXCLUDED FROM THE AMBIT OF EXPLANATION ON THE BASIS OF THE NATURE OF THE PRINC IPAL BUSINESS CARRIED ON BY IT. 9. THE TWO KINDS OF EXCEPTIONS PROVIDED IN EXPLANA TION TO SECTION 73 ARE BASED ON TWO INDEPENDENT TESTS LAID DOWN IN THE EXPLANATION ITSE LF. THE TEST TO BE APPLIED ON THE FIRST CATEGORY OF ASSESSEE IS THE CHARACTER OF ITS GROSS TOTAL INC OME. THE TEST LAID DOWN IN THE CASE OF THE SECOND CATEGORY OF ASSESSEE IS THE NATURE OF THE PRINCIPAL BUSINESS CARRIED ON BY IT. IN THE FIRST CATEGORY, WHERE THE TEST IS THAT OF THE CHARACTER OF GROSS TO TAL INCOME, THE OTHER TEST RELATING TO THE NATURE O F PRINCIPAL BUSINESS CARRIED ON BY IT DOES NOT APPLY. LIKEWISE IN THE SECOND CATEGORY OF ASSESSEE WHERE THE TEST IS THE NATURE OF THE PRINCIPAL BUSIN ESS CARRIED ON BY IT, THE TEST OF THE GROSS TOTAL INCOME DOES NOT APPLY. THE TWO EXCEPTIONS PROVIDED IN EXPLANATION TO SECTION 73 ARE GOVERNED BY TWO DIFFERENT TESTS LAID DOWN IN THE SAID EXPLAN ATION ITSELF. THEREFORE, THE EXAMINATION OF THE EXCEPTIONS PROVIDED IN EXPLANATION TO SECTION 73 IS TO BE DONE STRICTLY IN ACCORDANCE WITH THE TESTS LAID DOWN IN THE EXPLANATION. 10. THE LEARNED COUNSEL OF THE ASSESSEE ALSO DREW O UR ATTENTION TO THE COMPUTATION OF INCOME MADE BY THE ASSESSING OFFICER ON PAGE 5 O F THE ASSESSMENT ORDER, WHICH IS AS UNDER : 6 INCOME FROM BUSINESS - RS.11,84,774 INCOME FROM SHORT TERM CAPITAL GAIN - RS.34,80,00 0 11. CONSIDERING THE ABOVE TWO COMPONENTS OF GRO SS TOTAL INCOME IT WAS ARGUED BY THE LEARNED COUNSEL OF THE ASSESSEE THAT SHORT TERM CAPITAL GAIN BEING HIGHER THAN THE BUSINESS INCOME ASSESSEES CASE FALLS UNDER THE EXCEPTION PROVIDED IN EXPLANATION TO SECTION 73 AND, THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFI ED IN INVOKING THE SAID EXPLANATION TO SECTION 73 TO TREAT THE NORMAL BUS INESS LOSS OF RS.3,30,00,000 AS SPECULATIVE LOSS. 12. THE LEARNED COUNSEL OF THE ASSESSEE ALSO DRE W OUR ATTENTION TO SR. NO.5 OF THE CHART AND ARGUED THAT THE ASSESSEE HAS RIGHTLY ADJUST ED SHORT TERM CAPITAL GAIN AGAINST BUSINESS LOSS AS PER PROVISIONS OF SECTION 71(2) OF THE I. T. ACT AND, THEREFORE, THE NET BUSINESS LOSS WOULD BE REDUCED TO RS.2,95,20,000 AS UNDER : BUSINESS LOSS AS PER SR.NO. 3 RS. 3,30,00, 000 LESS: SHORT TERM CAPITAL GAIN RS. 34,80 ,000 ---------------------- NET BUSINESS LOSS RS. 2,95,20,000 ============ 13. IN VIEW OF THE ABOVE LEGAL POSITION, THE ACTIO N OF THE ASSESSING OFFICER, AS SUMMARIZED BELOW, WAS NOT JUSTIFIED : (I) AS PER PARA 3.9 OF THE ASSESSMENT ORDER : A.O. APPLIED EXPLANATION TO SECTION 73 AND BUSINESS LOSS OF RS. 3,30,00,000 TREATED AS SPECULATION LOSS 3,30,00,000 7 LESS: OTHER SPECULATIVE PROFIT EARNED BY THE ASSESSEE 2, 97,67,573 ---------------- SPECULATION LOSS ALLOWED TO BE CARRIED FO RWARD 32,32,427 -------------- (II) AS PER PARA 3.10 OF THE ASSESSMENT ORDER : TAXED ENTIRE SHORT TERM CAPITAL GAIN ACCRUED TO THE ASSESSEE ON DATE OF CONVERSION OF INVESTMENT INTO STOCK IN TRADE I.E. ON 01/04/2000 CONVERTED COST 15,30,00,000 ACTUAL COST 14,95,20,000 ----------------- SHORT TERM CAPITAL GAIN 34,80,000 ----------------- FOR THE ABOVE REFERRED LEGAL PROPOSITION THE LE ARNED COUNSEL OF THE ASSESSEE RELIED UPON THE ITAT MUMBAI SPECIAL BENCH DECISION IN TH E CASE OF ACIT VS. CONCORD COMMERCIALS (P) LTD. REPORTED IN 95 ITD 117. 14. THE LEARNED COUNSEL OF THE ASSESSEE ALSO POINT ED OUT THAT THE ASSESSING OFFICER HAVING NOT CONSIDERED THIS ASPECT OF EXCEPTION PROVIDED IN EXPLANATION BELOW SECTION 73, ASSESSEE HAVE NO OBJECTION IN CASE FOR THE PURPOSE OF VERIFI CATION OF ASSESSEES ABOVE CLAIM THE MATTER MAY BE RESTORED BACK TO THE ASSESSING OFFICER. 15. ON THE OTHER HAND, SHRI RAJEEV AGARWAL, LD. DEP ARTMENTAL REPRESENTATIVE RELIED UPON THE FINDING GIVEN BY THE ASSESSING OFFICER AS WELL AS T HE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 16. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS MADE BEFORE US AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. WE HA VE ALSO CONSIDERED THE DECISION OF HON'BLE 8 ITAT, MUMBAI BENCH H (SPECIAL BENCH) RELIED BY TH E LD. COUNSEL FOR THE ASSESSEE. IN THAT DECISION, AFTER CONSIDERING ALL THE RELEVANT JUDGME NTS ON THE ISSUE IN PARA-51 AT PAGES 150-151 OF ITS ORDER CAME TO THE FOLLOWING FINDINGS :- 1. EXPLANATION TO SECTION 73 IS NOT APPLICABLE TO A COMPANY FALLING UNDER ANY OF THE FOLLOWING TWO CATEGORIES :- (I) A COMPANY WHOSE GROSS TOTAL INCOME CONSISTED MAINLY OF INCOME WHICH IS CHARGEABLE UNDER THE HEADS INTERES T ON SECURITIES, INCOME FROM HOUSE PROPERTY, CAPITAL GAINS AND INCOME FROM OTHER SOURCES. (II) A COMPANY, THE PRINCIPAL BUSINESS OF WHICH IS THE BUSINESS OF BANKING OR THE GRANTING OF LOANS AND ADVANCES. 2. THAT, THE TESTS NECESSARY FOR DETERMINING WHETHE R A COMPANY FALLS UNDER ANY OF THE ABOVE TWO EXCEPTIONS ARE PRO VIDED IN THE EXPLANATION ITSELF. 3. THAT, IN THE CASE OF A COMPANY FALLING UNDER THE FIRST CATEGORY ABOVE THE TEST I TO EXAMINE WHETHER GROSS TOTAL INCOME OF THAT COMPANY CONSIST MAINLY OF INCOME WHICH IS CHAR GEABLE UNDER THE HEADS INTEREST ON SECURITIES, INCOME FROM HO USE PROPERTY, CAPITAL GAINS AND INCOME FROM OTHER SOURCES. TH E COMPOSITION OF GROSS TOTAL INCOME ALONE NEED TO BE LOOKED INTO. 4. THAT, IN THE CASE OF A COMPANY FALLING UNDER THE SECOND CATEGORY ABOVE, THE TEST IS TO EXAMINE THE PRINCIPAL BUSINES S CARRIED ON BY THE COMPANY TO ASCERTAIN WHETHER THE PRINCIPAL BUSINESS IS THAT OF BANKING OR THE GRANTING OF LOANS AND ADVANCES. THE NATURE OF T HE PRINCIPAL BUSINESS CARRIED ON BY THE COMPANY ALONE NEED TO BE LOOKED I NTO. WE FIND CONSIDERABLE FORCE IN THE SUBMISSIONS OF TH E ASSESSEE THAT ITS CLAIM FALLS UNDER THE EXCEPTION PROVIDED IN THE EXPLANATION BELOW SECT ION 73 AND, THEREFORE, ASSESSING OFFICER IS NOT JUSTIFIED TO TREAT THE NORMAL BUSINESS LOSS OF RS.3,30,00,000 AS SPECULATIVE LOSS IN VIEW OF THE EXPLANATION TO SECTION 73. APART FROM THIS, T HE ASSESSING OFFICER IS NOT JUSTIFIED IN TAXING INDEPENDENTLY SHORT TERM CAPITAL GAIN OF RS.34,80, 000 BY APPLYING THE PROVISIONS OF SECTION 45(2). THE ACTION OF THE ASSESSING OFFICER OF ADJU STING THE SAID CAPITAL GAIN AGAINST THE BUSINESS LOSS AS PER THE PROVISIONS OF SECTION 7 1(2) IS IN ACCORDANCE WITH THE LAW. HOWEVER, AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE THAT A.O. HAS NOT CONSIDERED THE ASSESSEES CLAIM THAT THE ASSESSEE IS NOT HIT BY THE EXPLANATI ON TO SECTION 73 BUT FALLS INTO THE EXCEPTIONS PROVIDED IN THE SAID EXPLANATION ON ACCOUNT OF THE FACTS PRODUCED BEFORE THE TRIBUNAL. THEREFORE, 9 IN THE INTEREST OF JUSTICE, WE DEEM IT FIT TO RESTO RE BACK THE MATTER TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION THAT HE WILL VERIFY THE ABOVE RE FERRED FACTS AND DECIDE THE CONTROVERSY INVOLVED KEEPING IN VIEW THE JUDGMENT OF THE HON'BLE ITAT, M UMBAI BENCH H (SPECIAL BENCH) IN THE CASE OF CONCORD COMMERCIALS (P) LTD. (SUPRA). NEEDL ESS TO ADD THAT BEFORE PASSING A FRESH ORDER, ASSESSING OFFICER WILL ALLOW ADEQUATE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. 17. GROUND NO. 5 IS NOT PRESSED DURING THE COURSE O F HEARING BY THE LD. COUNSEL FOR THE ASSESSEE. HENCE, THIS GROUND IS BEING DISMISSED AS NOT PRESSED. 18. IN THE RESULT, FOR STATISTICAL PURPOSES, THE AP PEAL OF THE ASSESSEE IS PARTLY ALLOWED AS INDICATED ABOVE. THE ORDER IS PRONOUNCED IN THE COURT ON 18.09 .2009 SD/- SD/- (D.C. AGARWAL) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 / 09 / 2009 COPY OF THE ORDER IS FORWARDED TO : 1) M/S. SHAHI PROPERTY DEVELOPERS PVT. LTD., SHIKHAR , 8 TH FLOOR, NR. MITHAKHALI SIX ROADS, NAVRANGPURA, AHMEDABAD. (2) ITO, WARD-8(3), AHMEDABAD, 3) CIT(A)- ,AHMEDABAD, (4) CIT- ,AHMEDABAD. (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.