ACIT, Circle-12(2), Kolkata, Kolkata V. M/s Pressman Realty Ltd., Kolkata

ITA 2207/KOL/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2613 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 18-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHUR Y
• Assessee Lawyers: S M SURANA
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA D BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER) ITA NO. 2207/KOL/2016 ASSESSMENT YEAR: 2010-11 ACIT, CIRCLE-12(2)), KOLKATA.....................................................APPELLANT VS. M/S. SELVEL ADVERTISING PRIVATE LIMITED........................ RESPONDENT M/S. PRESSMAL REALTY LTD. 10A, PRESSMAN HOUSE LEE ROAD KOLKATA 700 020 [PAN : AABCP 6865 C] APPEARANCES BY: SHRI S.M. SURANA, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE . SHRI ROBIN CHOUDHURY, ADDL. CIT, SR. D/R. APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : OCTOBER 15 TH , 2018 DATE OF PRONOUNCING THE ORDER : NOVEMBER 9 TH , 2018 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-18, KOLKATA, (HEREINAFTER THE LD. CIT(A)), DT. 26/08/2016, PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), RELATING TO ASSESSMENT YEAR 2010-11, ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN TREATING THE PROFIT/LOSS IN SHARE PURCHASE AND SALE OF THE ASSESSEE AS BUSINESS PROFIT/LOSS INSTEAD OF CAPITAL GAIN/LOSS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ALLOWING THE ADMINISTRATIVE AND OTHER EXPENSES CLAIMED BY THE ASSESSEE AS BUSINESS LOSS FROM SHARE TRADING AND CONSEQUENTLY ALLOWING THE BUSINESS LOSS OF RS.1,12,32,724/- WHICH WAS NOT ALLOWED IN THE ASSESSMENT ORDER U/S. 143(3) PASSED BY THE AO. 3. THAT THE APPELLANT CRAVES FOR LEAVE TO ADD, DELETE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 ITA NO. 2207/KOL/2016 ASSESSMENT YEAR: 2010-11 M/S. SELVEL ADVERTISING PRIVATE LIMITED 2. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT THE LD. FIRST APPELLATE AUTHORITY HAS FOLLOWED THE ORDER OF HIS PREDECESSOR FOR THE ASSESSMENT YEAR 2009-10 AND HELD THAT THE ACTIVITY OF THE ASSESSEE IS BUSINESS ACTIVITY AND THE LOSS IN QUESTION HAS TO BE TREATED AS A BUSINESS LOSS. THIS BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS M/S. PRESSMAN REALTY LTD. IN ITA NO. 2412/KOL/2016; ASSESSMENT YEAR 2011-12 , ORDER DT. 13/04/2018, HAS ON IDENTICAL CIRCUMSTANCES UPHELD THE ORDER OF THE LD. CIT(A). FOR THE ASSESSMENT YEAR 2009-10 IN ITA NO. 327/KOL/2014, ORDER DT. 29/03/2017 , THE TRIBUNAL AT PARA 4 HAS HELD AS FOLLOWS:- 4. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE FIVE SCRIPS IN QUESTION WERE PURCHASED BY THE ASSESSEE ON 14.03.2008 AND WERE SHOWN BY THE ASSESSEE AS STOCK IN TRADE WHICH HAS BEEN ACCEPTED BY THE AO IN THE PREVIOUS ASSESSMENT YEAR DONE U/S. 143(3) OF THE ACT AND IT HAS BEEN TAKEN AS THE OPENING STOCK IN TRADE ON 01.04.2008. WHEN THE AO HAS ACCEPTED IN THE PREVIOUS ASSESSMENT YEAR THAT THE SCRIPS IN QUESTION AS STOCK-IN-TRADE, THE AO WITHOUT VALID REASON CANNOT HOLD THAT THE OPENING STOCK IN TRADE HAS TO BE TREATED AS INVESTMENT. THE LD. AR DREW OUR ATTENTION TO THE SCRUTINY ASSESSMENT CARRIED OUT BY THE AO U/S. 143(3) OF THE ACT FOR THE AY 2008-09 TO SUPPORT THE SAID FACT. THE LD. CIT(A) HAS TAKEN NOTE OF THE FACT THAT THE ASSESSEE HAS PURCHASED AND SOLD THE TRADING SHARES IN QUESTION AND HAVE ROUTED THE TRANSACTION THROUGH P&L ACCOUNT. THE ASSESSEE HAD SHOWN THE SHARES AS STOCK IN TRADE AND THE AO U/S. 143(3) OF THE ACT FOR AY 2008-09 HAS ACCEPTED IT AS STOCK IN TRADE AND, THEREFORE, THE ASSESSEE HAS SHOWN THE SCRIPS IN QUESTION AS OPENING STOCK IN TRADE AS ON 01.04.2008. SINCE THERE IS NO CHANGE IN FACTS FROM THE EARLIER ASSESSMENT YEAR AND WHEN IN THE EARLIER YEAR AO IS PERMITTING THE TREATMENT GIVEN BY THE ASSESSEE FOR THE VERY SAME SHARES AS STOCK-IN-TRADE, THEN IN THE INSTANT ASSESSMENT YEAR WITHOUT CHANGE IN THE FACTS OR LAW, THE AO OUGHT NOT TO HAVE TREATED THE SHARES AS INVESTMENT AND NOT AS STOCK-IN-TRADE. THE CBDT CIRCULAR NO. 6 OF 2016 ON 29.02.2016 HAS NOTED THE DISPUTE WHICH CONSISTENTLY AROSE IN RESPECT TO TREATMENT OF TRADING OF SHARES AS BUSINESS OR INVESTMENT IN SHARES. FROM A PERUSAL OF PARA 3(A) OF THE SAID CIRCULAR, WE NOTE THAT THE CBDT HAS GIVEN CLEAR DIRECTION THAT WHERE THE ASSESSEE HAS TREATED THE LISTED SHARES AND SECURITIES AS STOCK-IN-TRADE, IRRESPECTIVE OF THE PERIOD OF HOLDING, THE INCOME ARISING FROM TRANSACTION OF SUCH SHARES/SECURITIES WOULD BE TREATED AS ITS BUSINESS INCOME. THE ONLY CONDITION EXPRESSED BY THE CBDT CIRCULAR IS THAT ONCE THE ASSESSEE HAS TAKEN A STAND IN AN ASSESSMENT YEAR THAT HE IS TRADING IN SHARES AS BUSINESS, OR AS INVESTMENT, THEN HE SHOULD NOT CHANGE, WHICH MEANS THAT THE ASSESSEE SHOULD BE CONSISTENT. WE NOTE THAT THE ASSESSEE IN AY 2008-09 HAS TREATED THE SAID FIVE SCRIPS PURCHASED AS STOCK IN TRADE WHICH WAS ACCEPTED BY THE AO AND THE SAME WAS THE OPENING STOCK FOR THE INSTANT ASSESSMENT YEAR I.E. AS ON 01.04.2008, THEREFORE, AS PER THE CIRCULAR OF THE CBDT, SINCE THE ASSESSEE HAS TAKEN A STAND THAT THE SHARES ARE STOCK IN TRADE THEN IRRESPECTIVE OF THE TIME OF HOLDING, THE INCOME ARISING FROM THE TRANSACTION OF SUCH SHARES NEEDS TO BE TREATED AS 3 ITA NO. 2207/KOL/2016 ASSESSMENT YEAR: 2010-11 M/S. SELVEL ADVERTISING PRIVATE LIMITED BUSINESS INCOME. THEREFORE, THE LD. CIT(A) HAS RIGHTLY TREATED THE SAME AS BUSINESS INCOME AND WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND, THEREFORE, WE DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 3. THE REQUEST OF THE LD. D/R, FOR RESTORING THE MATTER TO THE FILE OF THE ASSESSING OFFICER, IS DEVOID OF MERIT. 4. CONSISTENT WITH THE VIEW TAKEN BY THIS BENCH OF THE TRIBUNAL, WE UPHOLD THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY AND DISMISS THIS APPEAL OF THE REVENUE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. KOLKATA, THE 9 TH DAY OF NOVEMBER, 2018. SD/- SD/- [S.S. VISWANETHRA RAVI] [ J. SUDHAKAR REDDY ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05.11.2018 {SC SPS} 4 ITA NO. 2207/KOL/2016 ASSESSMENT YEAR: 2010-11 M/S. SELVEL ADVERTISING PRIVATE LIMITED COPY OF THE ORDER FORWARDED TO: 1. M/S. SELVEL ADVERTISING PRIVATE LIMITED M/S. PRESSMAL REALTY LTD. 10A, PRESSMAN HOUSE LEE ROAD KOLKATA 700 020 2. ACIT, CIRCLE-12(2)), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES