DHARMA SINGH SANGHA, Jaipur V. ACIT, Kota

ITA 214/JPR/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70131 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 04-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Keywords: Business income; Opportunity of being heard
• Section: 143(3); 244A; 234B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI B.R. JAIN AND SHRI KUL BHARAT) ITA NO. 214/JP/2013 ASSESSMENT YEAR : 2007-08 PAN: AFEPS 4509 P SHRI DHARMA SINGH SANGHA VS. THE ACIT 1-PA-25, VIGYAN NAGAR CIRCLE- 1 KOTA KOTA (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MAHENDRA GARGIEYA DEPARTMENT BY: SHRI D.C. SHARMA DATE OF HEARING: 21-08-2013 DATE OF PRONOUNCEMENT: 21-08-2013 ORDER PER KUL BHARAT, JM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. CIT(A, KOTA DATED 26-12-2012 FOR THE ASSESSMENT YEAR 2007-08 WH EREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS. 1. THE IMPUGNED ADDITIONS AND DISALLOWANCES MADE IN THE ORDER U/S 143(3) OF THE ACT DATED 26-12-2012 ARE BA D IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VAR IOUS OTHER REASONS AND HENCE THE SAME KINDLY BE DELETED. 2. RS. 14,57,125/-: THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ASSESSMENT OF INCOME ON ACCOUNT OF SALE OF SHARES UNDER THE HEAD BUSINESS INCOME AS AGAINST SHORT TERM CAPITAL GAIN (FOR SHORT STCG') AS DECLARED BY THE APPELLANT. THE TREATMENT SO GIVEN BY THE AO AND CONFIRMED BY THE LD. CIT(A), IS CONTRARY TO THE PROVISIONS OF LA W AND FACTS OF THE CASE. HENCE, THE INCOME DECLARED AS STCG BE DIRECT ED TO ASSESSED AS SUCH. 3. THE LD. AO FURTHER ERRED IN LAW AS WELL AS ON TH E FACTS OF THE CASE IN CHARGING INTEREST U/S 234B & 234D OF TH E ACT AND AS 2 ALSO IN WITHDRAWING INTEREST U/S 244A OF THE ACT. T HE APPELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING AND WITHDR AWAL OF ANY SUCH INTEREST. THE INTEREST SO CHARGED / WITHDRAWN BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN F ULL. 4. THE APPELLANT PRAYS YOUR HONOURS INDULGENCE TO A DD, AMEND OR ALTER ALL OR ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 2.1 AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT HE DOES NOT WANT TO PRESS GROUND NO. 1. IN VIEW OF THE SUBMISSIONS OF T HE LD. COUNSEL FOR THE ASSESSEE, THE GROUND NO. 1 OF THE ASSESSEE IS DISMISSED AS NOT PR ESSED. 3.1 THE GROUND NO. 3 OF THE ASSESSEE IS RELATING TO CHARGING OF INTEREST U/S 234B AND 234D OF THE ACT WHICH IS MANDATORY AND THE ASSESSEE WILL GET THE CONSEQUENTI AL RELIEF, IF ANY. 4.1 THE GROUND NO. 4 OF THE ASSESSEE IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 5.1 NOW THE ONLY EFFECTIVE GROUND 2 OF THE ASSESSEE IS AS UNDER:- (2) RS. 14,57,125/-: THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ASSES SMENT OF INCOME ON ACCOUNT OF SALE OF SHARES UNDER THE HEAD BUSIN ESS INCOME AS AGAINST SHORT TERM CAPITAL GAIN (FOR SHORT STCG') AS DECLARED BY THE APPELLANT. THE TREATMENT SO GIVEN BY THE AO AND CONFIRMED BY THE LD. CIT(A), IS CONTRARY TO THE PROVISIONS OF LA W AND FACTS OF THE CASE. HENCE, THE INCOME DECLARED AS STCG BE DIRECT ED TO ASSESSED AS SUCH. 5.2 BRIEFLY, THE FACTS STATED ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S 143(3) OF THE INC OME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) WAS FRAMED VIDE ORDER DATED 30-09-2009 WHEREBY THE AO MADE VARIOUS DISALLOWANCES INCLUDING THE CLAIM OF THE AS SESSEE IN RESPECT OF THE TRANSACTION IN SHARES AS CAPITAL GAIN TREATING THE SAME AS INCOME ARISING OUT OF TRADING ACTIVITY. AGAINST THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) WHO AFTER 3 CONSIDERING THE SUBMISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. THE LD. CIT(A) BY PARTLY ALLOWING THE APPEAL OF THE ASS ESSEE SUSTAINED THE ADDITION OF RS. 14,57,125/- MADE BY THE AO WHICH THE AO HAS TREATED AS BUSINESS INCOME OF THE ASSESSEE. 5.3 DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION THERE WERE TRAN SACTIONS RELATING TO MUTUAL FUNDS. HE SUBMITTED THAT THERE IS WRONG APPLICATION OF MIND B Y THE LOWER AUTHORITIES. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS RIGHTLY TREATED THE TRANSACTIONS AS CAPITAL GAIN. IN SUPPORT OF THIS CONTENTIONS, THE LD. COUNSEL FOR THE ASSES SEE RELIED UPON FOLLOWING CASE LAWS:- (A) CIT VS. GOPAL PUROHIT, 228 CTR 582 (BOM.) (B) ITO VS. ROHIT ANAND, 127 TTJ 122 (DEL.) (C) BHARAT KUNVERJI KENIA VS. ADDL. CIT , 130 TTJ 86 (M UM) 5.4 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW. 5.5 WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIALS AVAILABLE ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW. THE FACT I S THAT THERE WERE TRANSACTIONS IN MUTUAL FUNDS WHICH ARE OUT OF THE PURVIEW OF THE TRANSACTI ONS EFFECTED IN SHARES. THIS FACT IS NOT CONTROVERTED BY THE LD. DR. WE HAVE GIVEN OUR THOU GHTFUL CONSIDERATION TO THE FACTS OF THE PRESENT CASE. THE AUTHORITIES BELOW OUGHT TO HA VE APPLIED THEIR MIND ON THE FACTS OF THE CASE AS NON-CONSIDERATION OF THE TRANSACTION BE ING TRANSACTIONS IN MUTUAL FUNDS EX- FACIE DEPICTS THE NON-APPLICATION OF MIND. UNDER SU CH CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO TO VERIFY THE CLAIM OF THE ASSESSEE AND DECIDE THIS ISSUE AFRESH BY ALLOWING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS GROUND NO. 2 OF THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4 6.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT IMMEDIATELY AFTER CONCLUSION OF HEARING ON 21-08-2013. SD/- SD/- (B.R. JAIN) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 21 ST AUG, 2013 *MISHRA COPY FORWARDED TO:- BY ORDER 1. SHRI DHARMA SINGH SANGHA, KOTA 2. THE ACIT, CIRCLE- 1, KOTA 3. THE LD. CIT(A) 4. THE LD. CIT 5. THE LD. DR 6. THE GUARD FILE (IT NO.214/JP/13 ) A.R. ITAT: JAIPUR 5 6