Bonlon Steels Pvt. Ltd., V. ACIT Cent. Cir, 10,

ITA 2111/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8095 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-07-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 30-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K P GARG

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `A : NEW DELHI) BEFORE HONBLE SR. VICE PRESIDENT SHRI R.P. GARG A ND HONBLE JUDICIAL MEMBER, SHRI RAJPAL YADAV ITA NO.2111/DEL./2008 (ASSESSMENT YEAR : 2005-06) BONLON STEELS PVT. LTD., VS. ACIT, CEN. CIRCLE 16, A-63, GF, JHILMIL IND. AREA, NEW DELHI. SHAHDARA, DELHI. (PAN/GIR NO.AAACB6473H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.P. GARG, CA REVENUE BY : SHRI ASHISH KUMAR, SR.(DR) ORDER PER R.P. GARG, SR.VP THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) FOR ASSESSMENT YEAR 2005-06. T HE ONLY DISPUTE IN THIS APPEAL IS AGAINST THE TREATMENT GIVEN TO THE SALE AND PURCHAS E OF SHARES IN RESPECT OF VINCO METAL PVT. LTD. BY THE ASSESSING OFFICER. 2. THE ASSESSEE ACQUIRED THE SHARES OF VINCO METAL PVT. LTD. FOR RS.1 CRORE ON 31.3.2003. THESE SHARES WERE SOLD ON 6.4.2004, 25. 5.2004 & 26.4.2004 TO M/S FLUCKY LEASING & FINANCE PVT. LTD. FOR A CONSIDERATION OF RS.1,01,00,000. THE ASSESSEE HAD ALSO INVESTED RS.2,80,10,000 IN SHARE CAPITAL OF OTHER C OMPANIES WHICH WAS SHOWN UNDER THE HEAD INVESTMENTS. OUT OF THE OTHER SHARES OF RS .17,85,000 WERE PURCHASED IN THE YEAR 2000 WHICH WERE SOLD DURING 2003-04 RESULTING IN CA PITAL LOSS OF RS.2,33,753 AND THE OTHER SHARES WERE ALSO SOLD RESULTING INTO CAPITAL GAIN OF RS,1,62,250 AND THEY WERE OFFERED TO TAX IN ASSESSMENT YEAR ACCORDINGLY. THE ASSESSEE COMPUTED THE LOSS OR RS.6,38,255 ON THE SALE OF THESE SHARES WHICH WERE DISALLOWED BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: ITA NO.2111/DEL./2008 (A.Y. : 2005-06) 2 DURING THE YEAR THE ASSESSEE HAS CLAIMED CAPITAL L OSS AMOUNTING TO RS.6,38,255 ON THE SALE OF SHARES OF PVT. LTD. COMPANIES. SINC E THIS LOSS HAS BEEN CLAIMED ON SALE OF SHARES OF PVT. LTD. COMPANY THE MAIN POINT OF CONTENTION IS THAT HOW SALE VALUE OF THE SHARES HAVE BEEN ARRIVED. SINCE THE S HARES ARE UNQUOTED. SO, THERE IS NO LOCAS STANDI FOR ACCEPTING THE LONG TERM CAPITAL LOSS ON SALE OF SHARES OF THESE PVT. LTD. COMPANIES AS THE BASIS FOR CALCULATION OF VALUE DOES NOT CARRY ANY SUBSTANCE. HENCE, THIS LOSS IS DISALLOWED. 3. THE CIT(A), HOWEVER, ENHANCED THE ASSESSMENT BY TREATING THE SALE OF SHARES OF M/S VINCO METAL PVT. LTD. AS A SPECULATIVE PROFIT A ND DIRECTED THE ASSESSING OFFICER TO INCLUDE A SUM OF RS.1 LAC AS A SPECULATIVE PROFIT. HE DID NOT DEAL WITH THE CLAIM OF THE ASSESSEE WITH REGARD TO SHARES TO OTHER COMPANIES. 4. WE HAVE HARD THE PARTIES AND CONSIDERED THE RIVA L SUBMISSIONS. . LD.COUNSEL OF THE ASSESSEE, SHRI K.P. GARG, STATED THAT THE SALES WERE HELD AS INVESTMENT AND THE LOSS HAS ARISEN BECAUSE THE ADJUSTED COST TO BE ADJUSTED UND ER THE ACT. HE FURTHER SUBMITTED THAT WHEREVER THE PROFIT OR LOSS HAS OCCURRED, IT WAS SH OWN AS LONG TERM CAPITAL GAIN OR SHORT TERM CAPITAL GAIN AS ACCEPTED AS SUCH IN THE EARLIE R YEARS. THEREFORE, THERE IS NO MERIT IN THE ORDERS OF THE LOWER AUTHORITIES, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND ALLOW GROUND. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 6. ORDER PRONOUNCE IN OPEN COURT ON 08.07.2009. (RAJPAL YADAV) (R.P. GARG) JUDICIAL MEMBER SR. VICE PRESIDENT DATED: JULY 08, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-X, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT ITA NO.2111/DEL./2008 (A.Y. : 2005-06) 3