The ACIT, Anand Circle, Anand V. Margen Impex Ltd., Anand

ITA 2199/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8157 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 01-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Audit objection; Tax effect

Judgement Text

, MH MHMH MH IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI, MANISH BORAD, ACCOUNTANT MEMBER ITA NO.2199/AHD/2014 & CROSS OBJECTION NO. 258/AHD/2014 (IN ITA NO.2199/AHD/2014) ( / ASSESSMENT YEAR : 2007-08) ACIT, ANAND CIRCLE, 3 RD FLOOR, S.P. COMPLEX, NEAR OLD C.K. HALL, MAYFAIR ROAD, ANAND 388 001 VS. MARGEN IMPEX LTD., PLOT NO.801, PHASE-IV, ZONE E-2, GIDC ESTATE, V.U. NAGAR, ANAND 388 121 ! PAN/GIR NO. : AACCM 2105 R ( ' / APPELLANT ) .. ( #' RESPONDENT ) REVENUE BY : SHRI V.K. SINGH, SR. DR ASSESSEE BY : --NONE-- $ %&'() / DATE OF HEARING 16/11/2017 *+,-'() / DATE OF PRONOUNCEMENT 17/11/2017 . O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ALONG WIT H CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT( A)-IV, BARODA DATED 02/05/2014 PERTAINING TO A.Y. 2007-08, ON THE FOLLO WING GROUNDS: I. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AN D IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT EXPLANATION BELOW SECTION 73 IS ITA NO.2199/AHD /2014 & CO NO.258/AHD/2014(IN ITA NO.2199/AHD/2014) MARGEN IMPEX LTD. ASST.YEAR 2007-08 - 2 - NOT APPLICABLE TO THE CASE OF THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD FREQUENTLY DEALT IN PURCHASE AND SALE OF SHARES WHICH IS CLEARLY EVIDENT FROM THE ST ATEMENT OF CAPITAL GAIN/LOSS SUBMITTED BY THE ASSESSEE ITSELF. II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN DIRECTING THE AO TO ASSESS THE INCOME AS SHORT TERM CAPITAL GAIN ONLY AND NOT AS INCOME FROM SPECULATION BUSINESS WITHOUT APPRECIATING THE FACT THAT THE ACTIVITIES OF THE ASSESSEE INVOLVING PURCHASE AND S ALE OF EQUITY SHARES WAS DEEMED TO BE IN THE NATURE OF CARRYING B USINESS IN SHARES AND SECURITIES IN VIEW OF EXPLANATION BELOW SECTION 73 OF THE ACT. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APPEAL OF THE REVENUE NEEDS TO BE DISMISSED ON ACCO UNT OF LOW TAX EFFECT IN VIEW OF THE CBDT CIRCULAR NO.21 OF 2015 DATED 10 .12.2015. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT TH E TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED BY THE AFORESAID CBDT CIR CULAR. 3. WE HAVE HEARD LD. COUNSEL OF THE ASSESSEE AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT PRIMA-FACIE THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE IN VIEW OF CBDT CIRCULA R NO. 21/2015 IN F.NO.279/MISC. 142/2007-ITJ (PT) DATED 10TH DECEMBE R 2015, VIDE WHICH IT HAS BEEN PROVIDED THAT IF THE TAX EFFECT B Y VIRTUE OF THE COMMISSIONER OF INCOME-TAX (APPEALS)S ORDER IS BEL OW RS. 10 LACS, THEN THAT ORDER WOULD NOT BE CHALLENGED BEFORE THE TRIBU NAL IN FURTHER APPEAL. THE BOARD HAS PROVIDED EXEMPTIONS AT CLAUSE (8) OF THE INSTRUCTIONS ITA NO.2199/AHD /2014 & CO NO.258/AHD/2014(IN ITA NO.2199/AHD/2014) MARGEN IMPEX LTD. ASST.YEAR 2007-08 - 3 - WHEREIN IT HAS BEEN PROVIDED THAT THESE INSTRUCTION S WILL NOT BE APPLICABLE, IF VIRES OF ANY PROVISIONS HAS BEEN QUA SHED BY IMPUGNED ORDER OR ADDITION WAS MADE ON SOME AUDIT OBJECTIONS OR THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/BANK ACCOUNTS , ETC. WE FIND THAT THE PRESENT CASE DOES NOT FALL WITHIN THE EXEMPTION CLA USE AND THE TAX IS LESS THAN RS.10 LACS. THEREFORE, THE PRESENT APPEAL IS NOT MAINTAINABLE AND HENCE DISMISSED. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED IN LIMINE. 5. SO FAR CO IS CONCERNED. ASSESSEE HAS TAKEN FOLLO WING GROUNDS: I. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW OR IN FACTS IN UPHOLDING THE VALIDITY OF REOPENING U/S.147 THE CON CLUDED ASST. U/S.143(3) AFTER MAKING INQUIRY. II. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE S WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE CONFIRMED THE VALI DITY OF NOTICE ISSUED U/S.148 ON 28.06.2011 FOR REOPENING U/S.147 THE CONCLUDED ASST. U/S.143(3). THE LD. CIT(A) OUGHT TO HAVE HELD THAT NOTICE U/S.148 AND PROCEEDINGS INITIATED U/S.1 47 WERE BAD IN LAW AND CONTRARY TO THE PROCEDURE LAID DOWN UNDER J UDICIAL PRONOUNCEMENTS. IT SHOULD THEREFORE BE QUASHED. 6. SINCE CONNECTED DEPARTMENTS APPEAL HAS BEEN DIS MISSED ON ACCOUNT OF LOW TAX EFFECT. THEREFORE, CO HAS BECOME INFRUCTUOUS AND SAME IS DISMISSED AS INFRUCTUOUS. ITA NO.2199/AHD /2014 & CO NO.258/AHD/2014(IN ITA NO.2199/AHD/2014) MARGEN IMPEX LTD. ASST.YEAR 2007-08 - 4 - 7. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT IN ITA NO.2199/AHD/2014 FOR ASST. YEAR 2007-08 IS DISMISSE D AND CROSS OBJECTION NO.258/AHD/2014 (IN ITA NO.2199/AHD/2014) FOR ASST. YEAR 2007-08 IS ALSO DISMISSED AS INFRUCTUOUS. THIS ORDER PRONOUNCED IN OPEN COURT ON 17/11/2017 SD/- SD/- EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YS[KK LNL; U;KF;D LNL; YS[KK LNL; U ;KF;D LNL; YS[KK LNL; U ;KF;D LNL; YS[KK LNL; U ;KF;D LNL; ( MANISH BORAD ) (MAHAVIR PRASA D) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 17/11/2017 PRITI YADAV, SR.PS !'# $#! COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. /01( $ 2( / CONCERNED CIT 4. $ 2( 34 / THE CIT(A)-IV, BARODA. 5. 567 (%01 )01- / / DR, ITAT, AHMEDABAD 6. 789& GUARD FILE. % & / BY ORDER, TRUE COPY '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD