The ITO, Ward-1(1), Ahmedabad V. Smt. Ila Saurabh Dalal, Ahmedabad

ITA 2108/AHD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72989 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 21-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: A L THAKKAR
• Keywords: Business income

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BENCH, AHMEDABAD .., ! ! ! ! ' #$, BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ I.T.A. NO.2108/AHD/2012 ( & '& & '& & '& & '& / / / / ASSESSMENT YEAR : 2009-10) ITO WARD-1(1) AHMEDABAD / VS. SMT.ILA SAURABH DALAL VIMAL HOUSE NR.LAKHUDI TALAV NAVRANG SCHOOL ROAD AHMEDABAD ( !./)* !./ PAN/GIR NO. : AAEPD 6826 F ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY : SHRI O.P. BATHEJA, SR.D.R. ,-(+ / . / RESPONDENT BY : SHRI A.L. THAKKAR ' 0 / $1 / / / / DATE OF HEARING : 23/01/2014 23' / $1 / DATE OF PRONOUNCEMENT : 21/02/2014 4 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-6, AHMEDABAD (CIT(A) FOR SHORT) DATED 16/08/2012 PERTAINING TO ASSESSMENT YEAR (AY) 2009-10. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS BY DIRECTING TO TREAT PROFIT FROM SALE OF SHARES HELD FOR MERE 30 DAYS OR MORE AS CAPITAL GAINS INSTEAD OF BUSINESS INCOME BY RELYING ON CERTAIN DE CISION WITHOUT APPRECIATING THE INTRICACIES OF THE CASE THOROUGHLY DISCUSSED BY THE AO IN THE ASSESSMENT ORDER. 2. THAT THE LD.CIT(A) HAS OVERLOOKED THE FACT THAT THE ASSESSEE HAD ARBITRARILY SHOWN PROFITS FROM HUGE SHARE TRANSACTI ONS AS CAPITAL GAINS AND STRAY MUTUAL FUND TRANSACTION AS BUSINESS WITH AN OBVIOUS INTENTION OF TAX EVASION BY WAY OF CLAIMING EXEMPTION U/S.10(38) , CLAIMING EXPENSES AND PAYING LOWER TAXES. ITA NO.2108/AHD /2012 ITO VS. SMT.ILA SAURABH DALAL ASST.YEAR 2009-10 - 2 - 3. THAT THE LD.CIT(A) OUGHT TO HAVE NOTED THAT THERE W AS AN ORGANIZED BUSINESS SET-UP AND THE ASSESSEE HAD EVEN PLEDGED S HARES FOR AVAILING LOANS FOR TRANSACTING IN SHARES OF A PARTICULAR GRO UP FO COMPANIES. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER TO THE EXTENT MENTIONED ABOVE SINCE THE ASSESSEE HAS FAILED TO DI SCLOSE HIS TRUE INCOME/BOOK PROFIT. THE APPELLANT PRAYS THAT THE ORDER OF LD.CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED TO THE ABOVE EXTENT. THE APPELLANT CRAVES, TO LEAVE, TO AMEND OR ALTER ANY G ROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143(3) O F THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED V IDE ORDER DATED 09/11/2011, THEREBY THE ASSESSING OFFICER(AO) MADE ADDITION OF RS.50,36,484/- ON ACCOUNT OF BUSINESS INCOME AGAINST THE LONG-TERM CAPITAL GA IN AND SHORT-TERM CAPITAL LOSS AND MADE ADDITION OF RS.12,87,456/- INVOKING R ULE 8D OF I.T.RULES, 1962. AGAINST THIS, ASSESSEE FILED AN APPEAL BEFORE THE L D.CIT(A), WHO AFTER FOLLOWING THE DECISION OF THE HONBLE ITAT AHMEDABAD RENDERED IN THE CASE OF SHRI SUGAM CHAND C SHAH VS. ACIT IN ITA NO.3554/AHD/2008 FOR AY 2005-06 AND ITA 1932/AHD/2009 FOR AY 2006-97 HELD THAT WHEN EVER THE ASSESSEE HAS HELD THE SHARES FOR THE PERIOD MORE THAN 30 DAYS, T HE SAME IS TREATED AS INVESTMENT RESULTING IN LONG-TERM AND SHORT-TERM CA PITAL GAIN AND WHEREVER SHARES ARE HELD UP TO 30 DAYS, THE INCOME ARISING T HERE FROM IS TREATED AS BUSINESS INCOME OF THE APPELLANT. ACCORDINGLY, ASS ESSING OFFICER WAS DIRECTED TO RECALCULATE THE INCOME FROM BUSINESS AND INCOME FROM CAPITAL GAIN. IN RESPECT OF THE ADDITION MADE UNDER RULE 8D, THE LD. CIT(A) HELD THAT SINCE THE APPELLANT HAS NOT CLAIMED EVEN THE TOTAL EXPENSES T O THE EXTENT WORKED OUT AS PER RULE 8D, THE DISALLOWANCE IS TO BE RESTRICTED T O THE EXPENSES CLAIMED BY THE APPELLANT. NOW, THE REVENUE IS IN APPEAL AGAINST T HE ORDER OF LD.CIT(A). ITA NO.2108/AHD /2012 ITO VS. SMT.ILA SAURABH DALAL ASST.YEAR 2009-10 - 3 - 3. GROUND NOS.1, 2 & 3 ARE INTER-CONNECTED, THEREFO RE THE SAME ARE DECIDED TOGETHER FOR THE SAKE OF CONVENIENCE. 3.1. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE LD.CIT(A) HAS FAILED TO TAKE A NOTE ON FACT THAT TH E ASSESSEE HAS ENTERED INTO VARIOUS TRANSACTIONS AND ONLY MUTUAL FUND TRANSACTI ON IS TREATED AS BUSINESS TRANSACTION WITH AN INTENTION TO AVOID TAX LIABILIT Y. ON THE OTHER HAND, LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE LD.CIT(A) HAS FOLLOWED THE DECISION OF HONBLE COORDINATE BEN CH RENDERED IN THE CASE OF SHRI SUGAM CHAND C.SHAH VS. ACIT(SUPRA) AND THE REV ENUE HAS NOT PLACED ANY JUDGEMENT OF THE HIGHER FORUM WHERE THE DECISIO N OF THE COORDINATE BENCH(SUPRA) HAS BEEN REVERSED. THEREFORE, WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), THE SAME IS HEREBY UPHELD. THUS, THESE GROUNDS OF THE REVENUES APPEAL ARE REJECTED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 21/ 02 /2014 71.., .../ T.C. NAIR, SR. PS ITA NO.2108/AHD /2012 ITO VS. SMT.ILA SAURABH DALAL ASST.YEAR 2009-10 - 4 - 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. !! $ ': / CONCERNED CIT 4. ':() / THE CIT(A)-6, AHMEDABAD 5. 8 #; ,$ , , / DR, ITAT, AHMEDABAD 6. ;<& =0 / GUARD FILE. 4' 4' 4' 4' / BY ORDER, -8$ ,$ //TRUE COPY// > >> >/ // / !) !) !) !) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 07.02.14 (DICTATION-PAD 4-PAG ES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 7.2.14 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.21.2.14 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21.2.14 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER