Jaydeep Pravinbhai Gor, Baroda V. The Income tax Officer,Ward-5(2), Baroda

ITA 2119/AHD/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9286 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 21-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILAJA RAI
• Assessee Lawyers: J M TRIVEDI
• Keywords: Business income; Opportunity of being heard

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI MAHAVIR SINGH, JM AND D.C.AGRAWAL, AM JAYDEEP PRAVINBHAI GOR,20 SONALI SOCIETY, KARELIBAUGH, BARODA. VS. INCOME-TAX OFFICER, WD- 5(2), BARODA. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI J. M. TRIVEDI, AR RESPONDENT BY:- SMT. SHAILAJA RAI, D.R. O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FO LLOWING GROUNDS:- (1) THAT THE LD. AO ERRED IN TAXING AND LEARNED CIT(A) ERRED IN TAXING CONSTRUCTION RECEIPT OF RS.535015/- INSTEAD OF REASONABLE PROFIT EARNED FROM SAME ON THE REASON STATED IN RES PECTIVE ORDERS. (2) THAT THE ITO ERRED IN DISALLOWING AND LD. CIT(A) ER RED IN CONFIRMING DISALLOWANCE OF LOSS OF RS.917521/- ON A CCOUNT OF F & O TRANSACTION. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS E NGAGED IN THE BUSINESS OF CONSTRUCTION. RETURN OF INCOME WAS FILE D ON A TOTAL INCOME OF RS.1,67,595/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS THE AO FOUND THAT A SUM OF RS.15,63,100/- WAS DEPOSITED IN SAVINGS BANK ACCOUNT IN HDFC BANK. IT WAS CLAIMED THAT SUCH RECEIPTS WER E OUT OF CONSTRUCTION BUSINESS EVEN THOUGH SAID BANK ACCOUNT WAS NOT DISC LOSED IN THE RETURN. IT ITA NO.2119/AHD/2010 ASST. YEAR :2007-08 ITA NO.2119/AHD/2010 ASST. YEAR 2007-08 2 WAS FURTHER EXPLAINED THAT RECEIPTS IN THE BANK ACC OUNT ALSO PERTAINED TO TRANSACTION IN FUTURE AND OPTIONS TRADING. ON THE B ASIS OF ABOVE BANK ACCOUNT THE ASSESSEE DECLARED CONSTRUCTION RECEIPTS OF RS.5,35,015/-. HE FURTHER DECLARED A LOSS OF RS.9,17,521/- IN FUTURE AND OPTION TRANSACTION. THUS A NET LOSS OF RS.3,82,506/- WAS WORKED OUT. TH E AO TOOK THE VIEW THAT CONSTRUCTION RECEIPTS OF RS.5,35,015/- AS SUCH HAVE TO BE TAXED AS THEY ARE NOT DECLARED. HE HOWEVER, DID NOT ALLOW TH E CLAIM OF LOSS OF RS.9,17,521/- ON FUTURE AND OPTION TRADING OR OVER ALL LOSS OF RS.3,82,506/-. THE LD. CIT(A) UPHELD THE ADDITION O F RS.5,35,015/- AND ALSO BUT DECLINED TO ADJUST THE LOSS CLAIMED IN FUT URE AND OPTION TRANSACTION BY HOLDING THAT SUCH LOSSES NEEDED TO B E CLAIMED BY FILING THE RETURN OF INCOME. HE RELIED ON THE DECISION OF HON. SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. VS. CIT 284 ITR 323 (SC). 3. BEFORE US THE LD. AR FOR THE ASSESSEE SUBMITTED THAT ONCE BUSINESS RECEIPTS AS PER BANK ACCOUNT ARE CONSIDERED BY THE AO THEN HE WAS ALSO DUTY BOUND TO CONSIDER OTHER RECEIPTS FROM FUTURE A ND OPTIONS LIABILITY AND PROFIT OR LOSS ARISING THEREFROM. 4. THE LD. DR ON THE OTHER HAND, SUBMITTED THAT ASS ESSEE HAS NOT SUBMITTED ANY DETAIL AND HAS NOT FILED ANY RETURN F OR CLAIMING SUCH LOSS. SECONDLY, THE LOSS IS SPECULATIVE IN NATURE AND SHO ULD NOT BE ALLOWED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THE AO SHOULD CON SIDER THE RECEIPTS IN BANK ACCOUNT AS A WHOLE. HE SHOULD GIVE OPPORTUNITY TO THE ASSESSEE TO PROVE THAT ASSESSEE WAS ACTUALLY DEALING IN FUTURE AND OPTIONS AND THAT HE HAD INCURRED ACTUAL LOSS IN THOSE TRANSACTIONS AND THEY ARE ACTUALLY ALLOWABLE BUSINESS LOSS. ACCORDINGLY, WE RESTORE TH E MATTER TO THE FILE OF AO FOR DECIDING THE ENTIRE ISSUE OF LOSS AND BUSINE SS RECEIPTS AFRESH AFTER ITA NO.2119/AHD/2010 ASST. YEAR 2007-08 3 GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE APPEAL OF ASSESSEE IS ALLOWED BUT FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED BUT FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 30.11.10. SD/- SD/- (MAHAVIR SINGH) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT ME MBER AHMEDABAD, DATED : 30.11.10. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 19/11/2010. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 23/11/2010 MEMBER.OTHER MEMBER. 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 DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..