The ITO, Ward-3(2), Ahmedabad V. Girishkumar Ramanlal Chokshi & Brothers, Ahmedabad

ITA 2299/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9580 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Additional evidence; Question of law; Speculation loss
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE S/SHRI RAJPAL YADAV, JM, & MANISH BORAD, AM. ITA NO.2299/AHD/2012 ASST. YEAR: 2009-10 INCOME-TAX OFFICER, WD-3(2), AHMEDABAD. VS. M/S GIRISH RAMANLAL CHOKSI & BROTHERS, 2335/A/1, CHOKSI MAHAJAN BUILDING, MANEKCHOWK, AHMEDABAD. APPELLANT RESPONDENT PAN AAAFG 8187A APPELLANT BY MR. V. K. SINGH, SR.DR RESPONDENT BY SRI SUNIL H. TALATI, AR DATE OF HEARING: 1/2/2016 DATE OF PRONOUNCEMENT:03/02/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THIS APPEAL OF REVENUE IS DIRECTED AGAINST THE ORDE R OF CIT(A)- 6, AHMEDABAD, DATED 8/8/2012 IN APPEAL NO.CIT(A)- VI/ITO,WD.3(2)/203/11-12, FOR ASST. YEAR 2009-10. A SSESSMENT WAS FRAMED U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN S HORT THE ACT). FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL B Y THE REVENUE :- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN TREATING THE LOSS TO THE EXTENT OF RS.1,03,07,697/- AS BUSINESS LOSS INSTEAD OF SPECULATION LOSS DESPITE THE FACT THAT THE ASSES SEE HAD FAILED TO PROVE THAT IT WAS ON ACCOUNT OF HEDGING CONTRACT S. ITA NO. 2299/AHD/2012 ASST. YEAR 2009-10 2 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN ADMITTING ADDITIONAL EVIDENCE WITHOUT GIVING REASONABLE OPPOR TUNITY TO THE AO TO EXAMINE THE SAME. THIS IS IN CONTRAVENTION TO RULE 46A(3) OF THE IT RULES. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO TO THE EXTENT MENTIONED ABOVE SINCE THE ASSESSEE HAS FAILE D TO DISCLOSE HIS TRUE INCOME /BOOK PROFIT. THE APPELLANT PRAYS THAT THE ORDER OF LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT. THE APPELLANT CRAVES, TO LEAVE, TO AM END OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSA RY. 2. AT THE OUTSET THE LD. DR SUBMITTED THAT GROUND N O.2 IS NOT RELEVANT AND HENCE THE SAME NEED NOT BE ADJUDICATED . 3. AS REGARDS GROUND NO.1 THE LD. DR RELIED UPON TH E ORDER OF ASSESSING OFFICE AND SUPPORTING THE SAME SUBMITTED THAT LD. CIT(A) HAS WRONGLY ALLOWED THE CLAIM OF ASSESSEE HENCE THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER MAY BE RESTORED TO THE ABOVE EXTENT. 4. ON THE OTHER HAND, LD. AR WHILE SUPPORTING THE ORDER OF LD. CIT(A) SUBMITTED THAT A SIMILAR ISSUE HAS BEEN DECI DED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.1324/AHD/ 2011 FOR ASST. YEAR 2008-09 AND EVEN COVERED IN FAVOUR OF ASSESSEE BY THE HONBLE GUJARAT HIGH COURTS DECISION IN ASSESSEES OWN CAS E IN TAX APPEAL NO.160 OF 2015. (COPIES OF ORDERS ARE PLACED ON RE CORD). SO THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE A BOVE DECISIONS. THEREFORE, HE SUBMITTED THAT LD. CIT(A) HAS RIGHTLY ALLOWED THE CLAIM ITA NO. 2299/AHD/2012 ASST. YEAR 2009-10 3 OF ASSESSEE BY TREATING THE LOSS TO THE EXTENT OF R S.1,03,07,697/- AS BUSINESS LOSS AND THERE IS NO NEED OF INTERFERENCE IN THE ORDER OF LD. CIT(A). THE SAME MAY BE UPHELD. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. AFTER CONSIDERING THE FACTS AND PERUSING THE RECORDS WE FIND THAT A SIMILAR ISSUE CAME UP BEFORE THE TRIBUN AL IN ASSESSEES OWN CASE FOR ASST. YEAR 2008-09 AND THE CO-ORDINATE BENCH HAS DECIDED THE SAME IN FAVOUR OF ASSESSEE IN ITA NO.1 324/AHD/2011 VIDE ITS ORDER DATED 19.09.2014 BY OBSERVING AS UND ER ON THE FOLLOWING GROUND :- 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN REST RICTING THE ADDITION MADE BY THE AO ON ACCOUNT OF HEDGING LOSS TREATED AS SPECULATIO N LOSS TO RS. 1,01,417/- INSTEAD OF RS. 1,06,65,670/-ADMITTING ADDITIONAL EV IDENCE FURNISHED BEFORE HIM WITHOUT GIVING REASONABLE OPPORTUNITY TO THE AO IN VIOLATION OF RULE 46A(3) OF THE IT RULES, 1962. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD CIT(A) AFTER CONSIDERING THE DECISI ON OF AAR IN THE CASE OF SOPROPHA S. A IN RE 268 ITR 37 WHEREIN THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PANKAJ OIL MILLS (SUPRA) AND T HE CBDT CIRCULAR NO. 23D DATED 12.09.1960WAS ALSO CONSIDERED, WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE. CIT(A) FURTHER ON VERIFICATION OF THE ENT IRE STOCK ITA NO 1324/AHD/2011 . A.Y. 2008-09 6 REGISTER IN THE FORM AT REQUIRED BY HIM, HAS HELD THAT THE NET RESULT OF SPECULATION TRANSACTIONS RES ULTED IN SPECULATIVE LOSS OF ONLY RS. 1,01,417/- AND REST OF ALL THE LOSS WAS A HEDGI NG LOSS AND ACCORDINGLY RESTRICTED THE DISALLOWANCE OF SPECULATION LOSS AT RS. 1,01,417/-. WE FURTHER FIND THAT LD. CIT(A) HAD FURTHER DIRECTED THE A.O TO VER IFY THE CORRECTNESS OF THE LIST FROM THE BILLS AND MISTAKE IF ANY, TO BE CORRECTED. BEFORE US, LD D.R. HAS NOT BROUGHT ANY MATERIAL TO CONTROVERT THE FINDINGS OF CIT(A) AND THEREFORE WE FIND ITA NO. 2299/AHD/2012 ASST. YEAR 2009-10 4 NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 6. THE ABOVE DECISION OF THE TRIBUNAL IN THE CASE O F ASSESSEE WAS CHALLENGED BY THE REVENUE BEFORE THE HONBLE GUJARA T HIGH COURT IN TAX APPEAL NO. APPEAL NO.160 OF 2015 AND THEIR LORD SHIPS HAVE DECIDED THE SAME IN FAVOUR OF ASSESSEE VIDE ITS ORD ER DATED 25.03.2015 WHEREIN HAS BEEN OBSERVED AS UNDER: (4.1) CONSIDERING THE AFORESAID FACTS AND CIRCUMST ANCES PAGE 5 OF 6 HC-NIC PAGE 5 OF 6 CREATED ON WED FEB 03 12:16:21 IST 2016 O/TAXAP/160/2015 JUDGMENT OF THE CASE, IT CANNOT BE SAID THAT THE LE ARNED ITAT HAS COMMITTED ANY ERROR IN DISMISSING THE APPEAL PREFERRED BY THE REVENUE AND CONFIRMING THE ORDER PASSED BY THE LEARNED CIT(A) RESTRICTING THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF HEDGING LOSS TREATI NG IT AS SPECULATION LOSS TO RS.1,01,417/- INSTEAD OF RS.1,06,65,670/-. NO QUEST ION OF LAW, MUCH LESS SUBSTANTIAL QUESTION OF LAW ARISES IN THE PRESENT T AX APPEAL. UNDER THE CIRCUMSTANCES, THE PRESENT TAX APPEAL DESERVES TO B E DISMISSED AND IS ACCORDINGLY DISMISSED. (5.0) AT THIS STAGE, IT IS R EQUIRED TO BE NOTED THAT EVEN WHILE PASSING THE ORDER THE LEARNED CIT(A) HAS SPEC IFICALLY OBSERVED THAT WHILE GIVING THE BILL EFFECT THE ASSESSING OFFICER MIGHT VERIFY CORRECTNESS OF THE BILLS AND MISTAKE, IF ANY, MAY BE CORRECTED, WHICH MAY IN CREASE OR DECREASE THE FIGURE OF RS.1,01,417/-. UNDER THE CIRCUMSTANCES, NO INTER FERENCE OF THIS COURT IS CALLED FOR. 7. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE J URISDICTIONAL HIGH COURT AS REFERRED ABOVE, WE ARE OF THE VIEW T HAT LD. CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF ASSESSEE AND WE FIND N O REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). THEREFORE, THE ORDER OF LD. CIT(A) ITA NO. 2299/AHD/2012 ASST. YEAR 2009-10 5 ON THE ISSUE IS UPHELD. THE GROUND RAISED BY THE RE VENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD FEBRUARY, 2016 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 03 /02/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD ITA NO. 2299/AHD/2012 ASST. YEAR 2009-10 6 1. DATE OF DICTATION: 01/02/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 03/02/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 3/2/2016 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: