LABDHI STOCK & DERIVATIVES SERVICES P. LTD, MUMBAI V. ITO 4(3)(3), MUMBAI

ITA 2312/MUM/2011

• Counselvise Citation: 231219914 RSA 2011
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 22-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P K B MENON
• Keywords: Business income; Principle of natural justice; Retrospective amendment; Speculation loss; Speculative transactions
• Section: 143(3); 234B; 43(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, MUMBAI. BEFORE SHRI B.R.MITTAL, JUDICIAL MEMBER AND PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A NO.2312/ MUM/2011 ASSESSMENT YEAR: 2006-07 LABDHI STOCK & DERIVATES SERVICES P.LTD. .. APP ELLANT 412, KAILASH PLAZA, 4 TH FLOOR, VALLABH BAUG LANE, GHATKOPAR(E), MUMBAI-400 077 PA NO.AAACL 7496 C VS INCOME TAX OFFICER 4(3)(3) .. RESPONDEN T AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. APPEARANCES: BIPIN BAGADIA, FOR THE APPELLANT P.K.B.MENON , FOR THE RESPONDENT DATE OF HEARING : 11.1.2012 DATE OF PRONOUNCEMENT : 31 .1.2012 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE HAS CALLED INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 14 TH JANUARY, 2011, IN THE MATTER OF ASSESSMENT UNDER SECT ION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2006-07, ON THE FOLLOWING GROUNDS AS SET OUT IN THE MEMORANDUM OF APPE AL: 1. ASSESSMENT OF INCOME A. THE LD CIT(A) ERRED IN LAW AND ON FACTS IN CONFI RMING THE ADDITION, INTER-ALIA, OF RS. 10,49,033 TO THE RETURNED INCOME OF RS. 50,485 AS DECLARED BY THE APPELLANT. I.T.A NO.2312/ MUM/2011 ASSESSMENT YEAR: 2006-07 2 B. YOUR APPELLANT SUBMITS THAT IT HAD DETERMINED T HE TOTAL INCOME OF RS. 50,485 AS PER THE PROVISIONS OF THE INCOME TAX ACT. C. YOUR APPELLANT PLEADS THAT THE RETURNED INCOME O F RS. 50,485 BE ACCEPTED AND THE ADDITIONS MADE TO SUCH RETURNED IN COME OF RS. 10,49,033 BE DELETED. 2. DERIVATIVE TRADING LOSS: (A) THE ID. CIT(S) ERRED IN LAW AND ON FACTS IN UPH OLDING THE A.O.S ACTION IN DISALLOWING THE CLAIM OF LOSS OF RS.9,47,087 ON DERIVATIVE TRANSACTIONS BY FIRST TREATING THE DERIVATIVE TRADING LOSS AS SP ECULATION LOSS AND FURTHER DISALLOWING THE SAME BY HOLDING THAT SUCH TRANSACTI ONS HAVE BEEN CARRIED ON NSE BEFORE 26.01.2006, THE DATE ON WHICH RECOGNITION WAS GRANTED FOR CONDUCTING ELIGIBLE TRANSACTIONS. (B) YOUR APPELLANT SUBMITS THAT (I) TRANSACTIONS HAVE BEEN INCURRED ON RECOGNIZED S TOCK EXCHANGE AND FULFILLED ALL THE CONDITIONS TO FALL WITHIN THE DEF INITION OF ELIGIBLE TRANSACTIONS AND HENCE WERE SPECIFICALLY COVERED U NDER PROVISO (D) TO S.43(5) AND HENCE THE SAME WERE NON-SPECULATION TRA NSACTIONS ELIGIBLE TO BE SET OFF AGAINST BUSINESS INCOME. (II) ALTERNATIVELY, SUCH TRANSACTIONS ARE COVERED U NDER PROVISO (B) OR (C) OF SECTION 43(5) AND HENCE THE SAME WERE NON-SPECUL ATION TRANSACTIONS. (C )YOUR APPELLANTS SUBMIT THAT THE LOSS INCURRED F ROM TRANSACTIONS IN RESPECT OF DERIVATIVE TRANSACTIONS ARE NON-SPECULAT IVE IN NATURE AND THE SAME SHOULD BE SET OFF AGAINST BUSINESS INCOME. EXPENSES ATTRIBUTABLE TO DERIVATIVE LOSS: (A) THE ID. CIT(A) ERRED IN LAW AND ON FACTS IN UPH OLDING THE A.O.S ACTION IN FURTHER APPLYING PROVISIONS OF EXPI. TO SEC. 73 OF INCOME TAX ACT TO TOTAL EXPENDITURE BY HOLDING, ON AN AD HOC BASIS, T HAT EXPENSES TO THE TUNE OF RS.2,00,000 HAS BEEN INCURRED FOR DERIVATIV E TRADING ACTIVITY AND BY FURTHER ASSUMING SUCH DERIVATIVE LOSS REPRESENTE D SPECULATION LOSS AND DISALLOWING THE SAME ON THE GROUND THAT SUCH EXPENS ES OF RS.2,00,000 WERE INCURRED FOR THE PURPOSES OF DEEMED SPECULATIO N BUSINESS AND WERE NOT ALLOWED TO BE SET-OFF AGAINST REGULAR INCOME. (B) YOUR APPELLANTS SUBMIT THAT: (I) EXPL. TO SEC 73 WAS NOT APPLICABLE TO SUCH LOSS , THE SAME NOT BEING SPECULATION BUSINESS LOSS. (II) NO PARTICULAR EXPENDITURE WAS INCURRED SOLELY FOR SUCH ACTIVITY. (III) THE ENTIRE BUSINESS OPERATION RESULTS IN ONE BUSINESS ACTIVITY AND HENCE IT WAS NOT OPEN TO APPORTION A PART OF THE EX PENSES BETWEEN BUSINESS AND DEEMED SPECULATION TRANSACTION. (IV) NO APPORTIONMENT OF EXPENSES COULD BE MADE ON NOTIONAL BASIS. I.T.A NO.2312/ MUM/2011 ASSESSMENT YEAR: 2006-07 3 (V) WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED AO HAS ERRED IN ESTIMATING THE PROPORTION OF EXPENSES INCURRED FOR DERIVATIVE LOSS ON AN AD HOC BASIS AND REASONS FOR SUCH ESTIMATION CITED BY HIM WERE ALSO INSUFFICIENT AND WRONG. (C) YOUR APPELLANT PLEADS THAT THE SAID ADDITION OF RS.2,00,000 BE DELETED. 4. INTEREST U/S 234B & U/S 234C: (A) THE ID. CIT(A) ERRED IN LAW AND ON FACTS IN UPH OLDING THE A.O.S ACTION IN LEVYING INTEREST BY INCORRECT CALCULATIONS AND F URTHER ERRED IN LEVYING INTEREST U/S.234B & U/S.234C WITHOUT GIVING ANY OPP ORTUNITY OF HEARING AND IN NOT PASSING ANY ORDER FOR THE LEVY OF INTERE ST. (B) YOUR APPELLANTS DENY ANY LIABILITY OF PAYMENT O F INTEREST AND FURTHER SUBMIT THAT THE INTEREST WAS CHARGED IN VIOLATION O F THE PROVISION OF NATURAL JUSTICE IN AS MUCH AS NO OPPORTUNITY FOR HEA RING WAS GIVEN. (C) YOUR APPELLANTS PRAY THAT THE INTEREST LEVIED B E DELETED. 2. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEALING IN SHARES AND SECURITIES, INCLUDING DERIVATIVES. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS INCURRED LOSSE S IN DERIVATIVES SEGMENT ON THE NATIONAL STOCK EXCHANGE. HE FURTHER NOTED THAT THE NATIONAL STOCK EXCHANGE WAS GRANTED RECOGNITION, IN TERMS OF SUB-CLAU SE (II) IN THE EXPLANATION TO CLAUSE (D) OF PROVISO TO SECTION 43(5) OF THE INCOME TAX ACT, BY THE CENTRAL GOVERNMENT ON 25 TH JANUARY, 2006. HE APPARENTLY PROCEEDED ON THE BA SIS THAT TRANSACTIONS ENTERED INTO BY THE ASSESSEE PRIOR TO THIS DA TE WILL BE TREATED AS SPECULATIVE TRANSACTIONS AS THE NSE WAS NOT A NOTIFIED ST OCK EXCHANGE FOR THE RELEVANT PERIOD, WHILE TRANSACTIONS ENTERED INTO AFTE R THIS DATE WILL BE TREATED AS NON-SPECULATIVE TRANSACTIONS. HE, ACCORDINGLY, SEGREGA TED THE LOSSES INCURRED IN DERIVATIVES AS FOLLOWS: PRIOR TO 26.1.2006 POST 26.1.2006 PROPRIETARY A/C 452853 276008 PROPRIETARY A/C 446489 21804 OTHER CHARGES 47745 30676 TOTAL 9,47,087 3,28,488 IT WAS IN THIS BACKGROUND THAT THE ASSESSING OFFICER WAS O F THE CONSIDERED VIEW THAT SINCE THE CONDITION OF NOTIFICATION WAS NOT FULFILL ED PRIOR TO 26.1.2006, THE LOSSES I.T.A NO.2312/ MUM/2011 ASSESSMENT YEAR: 2006-07 4 INCURRED ON SUCH TRANSACTION COULD NOT BE ADJUSTED AGA INST THE REGULAR BUSINESS INCOME OF THE ASSESSEE. HE, THUS DISALLOWED RS.9,47,087 A S LOSS ON SPECULATIVE TRANSACTIONS THOUGH ALLOWED THE SAME TO BE CARRIED FOR WARD. THE ASSESSING OFFICER FURTHER NOTED THAT THE EXPENSES INCURRED ON SPECULATIO N OR NON-SPECULATION BUSINESS COULD NOT BE EASILY SEGREGATED BUT SINCE PART O F THE EXPENSES INCURRED BY THE ASSESSEE WERE NOT RELATABLE TO THE SPECULATION LOSS, H E DISALLOWED RS.2 LAKHS AS RELATABLE TO SPECULATION BUSINESS ON ADHOC BASIS. AGGRIE VED BY THE STAND SO TAKEN BY THE AO, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE CIT(A) BUT WITHOUT ANY SUCCESS. WHILE REJECTING THE STAND OF THE ASSESSEE, THE C IT(A), INTER ALIA, HELD AS FOLLOWS: 3.3. I HAVE CONSIDERED THE FACTS AND PERUSED THE M ATERIAL ON RECORD. I FIND THAT THE NATIONAL STOCK EXCHANGE WAS RECOGNIZED WITH EFFECT FROM 25-01-2006. THE PROVISIONS OF SECTION 43(5) (D) PRO VIDES THAT THE TRANSACTION IN DERIVATIVE WILL NOT BE DEEMED TO BE A SPECULATIVE PROVIDED IF IT IS CARRIED ON IN A RECOGNIZED STOCK EXCHANGE. THE APPELLANT HAS DONE TRANSACTIONS IN DERIVATIVE AT TH E NSE WHICH WAS RECOGNIZED WITH EFFECT FROM 25-1-06. THEREFORE, THE TRANSACTIONS CARRIED ON IN THE STOCK EXCHANGE BEFORE THE 26-1-2006 WOULD AMOUNT TO BE DERIVATIVE TRANSACTIONS AS SUCH TRANSACTIONS WERE N OT CARRIED OUT RECOGNIZED STOCK EXCHANGE. THEREFORE, THE SPECULATIV E LOSS OF RS.9 47,087 INCURRED BEFORE 26-1-06 IN THE NSE HAS BEEN RIGHTLY HELD TO BE SPECULATIVE IN NATURE. THE CLAIM OF THE APPELLANT T HAT DERIVATIVE TRANSACTIONS ARE NOT SPECULATIVE IN VIEW OF DECISIO N IN THE CASE OF RBK SECURITIES AND SSK INVESTORS (SUPRA).THIS CANNOT BE ACCEPTED AS THESE DECISION HAVE BEEN CONSIDERED IN THE CASE OF SHREE CAPITAL SERVICES PVT. LTD. (SUPRA) WHEREIN IT WAS HELD THAT THE TERM DERI VATIVE IN WHICH UNDERLYING ASSET IS SHARES, WILL FALL WITHIN THE ME ANING OF COMMODITY USED IN SECTION 43(5) OF THE ACT. THE CONTENTION OF THE AR THAT THE ANALOGY OF DECISION IN THE CASE OF GODREJ & BOYCE M ANUFACTURING CO. LTD (SUPRA) WOULD APPLY IS NOT ACCEPTABLE AS THE SAID D ECISION WAS INTERPRETING APPLICABILITY OF RULES AND NOT THE PRO VISIONS OF INCOME- TAX ACT, 1961. FURTHER, THE PROVISIONS OF SECTION 43(5) (D) IS APPLICABLE FROM AY 06-07 IS NOT DISPUTED, BUT ONLY THE TRANSACTION WHICH WERE NOT CARRIED ON RECOGNIZED STOCK EXCHANGE WOULD BE SPECUL ATIVE IN NATURE AND THE TRANSACTIONS WHICH WERE CARRIED ON AT THE R ECOGNIZED STOCK EXCHANGE I.E. AFTER 26-1-06 WOULD NOT BE REGARDED AS SPECULATIVE IN NATURE. THEREFORE, THE SHARES TRANSACTION CARRIED O N UN-RECOGNIZED WOULD VERY WELL FELL UNDER THE DERIVATIVE TRANSACTI ONS. IN VIEW OF THESE FACTS, THIS GROUND OF APPEAL OF APPEAL IS TREATED A S DISMISSED. 3. THE ASSESSEE IS NOT SATISFIED BY THE STAND SO TAKEN BY TH E CIT(A) AND IS IN FURTHER APPEAL BEFORE US. I.T.A NO.2312/ MUM/2011 ASSESSMENT YEAR: 2006-07 5 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLI CABLE LEGAL POSITION. 5. WE FIND THAT THE ISSUE IS SQUARELY COVERED BY A CO-O RDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF PREM ASSOCIATES ADVERTISING & MA RKETING VS JCIT (ITA NO. 6547/MUM/2009- ASSESSMENT YEAR 2006-07) DATED 17.9.201 0, WHEREIN, THE COORDINATE BENCH, SPEAKING THROUGH ONE OF US, I.E. A CCOUNTANT MEMBER, INTER ALIA, OBSERVED AS FOLLOWS: 4. LEARNED COUNSELS CONTENTION IS THAT ONCE THE S TOCK EXCHANGES HAVE BEEN NOTIFIED, THOUGH ON 25 TH JANUARY 2006, ALL THE TRANSACTIONS ENTERED INTO IN T HE STOCK EXCHANGES SO NOTIFIED, EVEN PRIOR TO THE DATE OF NOTIFICATION, SHOULD BE TREATED AS HAVING BEEN ENTERED INTO IN THE RECOGNIZ ED STOCK EXCHANGES. IN SUPPORT OF THIS PLEA, LEARNED COUNSEL HAS RELIED UP ON THE DECISION OF DELHI B BENCH IN THE CASE OF GK ANAND BROTHERS BUILDWELL (P VT) LTD VS ITO (34 SOT 439). 5. LEARNED COUNSEL HAS ALSO FILED COPIES OF DECISIO N OF ANOTHER COORDINATE BENCH IN THE CASE OF CLARIS LIFESCIENCES LTD VS ACIT ( 11 2 ITD 307), ALSO OF HONBLE GUJRAT HIGH COURT S JUDGMENT, IN THE CASE OF CIT V S CLARIS LIFESCIENCES LTD (221 CTR 301) CONFIRMING THE SAID DECISION. THIS CASE DE ALS WITH THE QUESTION OF ADMISSIBILITY OF WEIGHTED DEDUCTION, IN RESPECT OF IN HOUSE RESEARCH AND DEVELOPMENT ACTIVITY AS APPROVED BY THE PRESCRIBED AUTHORITY, UNDER SECTION 35(2AB), WHICH WAS DECLINED TO THE ASSESSEE, FOR TH E PERIOD PRIOR TO THE DATE OF APPROVAL BY THE PRESCRIBED AUTHORITY. THE COORDINAT E BENCH HELD THAT AS LONG AS PRESCRIBED AUTHORITY HAS APPROVED THE IN HOUSE R & D FACILITY, WHETHER THE EXPENSES WAS INCURRED PRIOR TO THE DATE OF APPROVAL OR AFTER THE SAID DATE, ENTIRE EXPENSE INCURRED IN THE RELEVANT PREVIOUS YE AR WAS TO BE ALLOWED AS DEDUCTION. 6. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, VEHEMENTLY SUPPORTS THE STAND OF THE AUTHORITIES BELOW WHICH I S BROADLY TO THE EFFECT THAT SPECIFIC REQUIREMENTS OF SECTION 43(5)(D), WHICH AR E QUITE CLEAR AND UNAMBIGUOUS, ARE NOT SATISFIED ON THE FACTS ON THE PRESENT CASE. THE LINE OF REASONING ADOPTED BY THE LEARNED DEPARTMENTAL REPRE SENTATIVE IS THIS. THE TWIN REQUIREMENTS UNDER THIS PROVISION, FOR A TRANS ACTION TO BE TAKEN OUT OF THE AMBIT OF SECTION 43(5), ARE THAT THE TRANSACTION SH OULD BE AN ELIGIBLE TRANSACTION AND THAT THE STOCK EXCHANGE IN WHICH TRA NSACTION IS CARRIED OUT SHOULD BE A RECOGNIZED STOCK EXCHANGE. THESE REQUIRE MENTS ARE TO BE SATISFIED QUA EACH TRANSACTION WITH RESPECT TO WHICH PROTECTI ON UNDER CLAUSE (D) IS SOUGHT. TO BE A RECOGNIZED STOCK EXCHANGE, A STOCK EXCHANGE HAS TO BE NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES FOR THE PURPOS ES OF SECTION 43(5)(D). THE NOTIFICATION ISSUED IN EXERCISE OF THE POWERS SO VES TED WITH THE CBDT SPECIFICALLY PROVIDES THAT THE NOTIFICATION IS WITH EFFECT FROM THE DATE OF PUBLICATION IN THE OFFICIAL GAZETTE. IT CANNOT, THEREFORE, BE CONTEND ED THAT THE NOTIFICATION CAN I.T.A NO.2312/ MUM/2011 ASSESSMENT YEAR: 2006-07 6 HAVE A RETROSPECTIVE EFFECT. IN EFFECT THUS, THE EL IGIBLE TRANSACTIONS CARRIED OUT AT THE STOCK EXCHANGES, WHICH WERE NOT NOTIFIED TILL THE DATE OF TRANSACTION, CANNOT BE SAID TO HAVE BEEN CARRIED OUT AT RECOGNI ZED STOCK EXCHANGES. THE MANDATE OF THE SECTION 43(5)(D) IS CLEARLY NOT SATI SFIED IN THIS SITUATION, AND, ACCORDINGLY, THESE TRANSACTIONS WILL NOT BE COVERED BY THE EXCLUSION CLAUSE SET OUT IN SECTION 43(5)(D). ON THE STRENGTH OF THIS LI NE OF REASONING, LEARNED DEPARTMENTAL REPRESENTATIVE URGES US TO HOLD THE OR DERS OF THE AUTHORITIES BELOW AND DECLINE TO INTERFERE IN THE MATTER. 7. WE FIND THAT I T IS UNDISPUTED POSITION THAT THE STOCK EXCHANGES, ON WHICH THE IMPUGNED TRANSACTIONS WERE CARRIED OUT , WERE DULY NOTIFIED ON 25 TH JANUARY 2006, AND THAT IN ACCORDANCE WITH THE VIEWS OF THE CO-ORDINATE BENCH IN THE CASE OF ANAND BUILDWELL (SUPRA), AS ALSO WITH THE V IEWS OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CLARIS LIFE SCIENCES (SUPRA), ONCE THE APPROVAL IS GRANTED IN THE RELEVANT PREVIOUS YEAR, AND IN THE ABSENCE OF A NYTHING INDICATED TO THE CONTRARY, THE APPROVAL HAS TO BE TAKEN AS EFFECTIVE FROM THE BEGINNING OF THE RELEVANT YEAR. THE ISSUE IS THUS COVERED, IN FAVOUR OF THE LINE OF REASONING ADOPTED BY THE ASSESSEE, BY DECISION OF THE COORDIN ATE BENCH IN THE CASE OF ANAND BROTHERS (SUPRA) AND BY HONBLE GUJARAT HIGH COURT S JUDGMENT IN THE CASE OF CLARIS LIFESCIENCES (SUPRA). RESPECTFULLY F OLLOWING THESE DECISIONS, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND HOLD THAT THE DERIVATE TRANSACTIONS, ENTERED INTO BY THE ASSESSEE AT THE RECOGNIZED STOC K EXCHANGES EVEN PRIOR TO THE DATE OF NOTIFICATION IN THE RELEVANT PREVIOUS YEAR, ARE TO BE TREATED AS COVERED BY THE EXCLUSION CLAUSE SET OUT IN SECTION 43(5)(D). THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 6. WE ARE IN CONSIDERED AGREEMENT WITH THE VIEWS SO EX PRESSED BY THE COORDINATE BENCH AND, ACCORDINGLY, WE HAVE TO PROCE ED ON THE BASIS THAT ALL THE TRANSACTIONS ENTERED INTO IN THE RELEVANT PREVIOUS YEA R BY THE ASSESSEE IN NATIONAL STOCK EXCHANGE ARE TO BE TREATED AS NON-SPECULATIVE T RANSACTION. ONCE WE COME TO THIS CONCLUSION, IT IS ONLY A COROLLARY TO THE SAID FIN DINGS THAT THE LOSSES INCURRED ON SUCH TRANSACTION ARE TO BE TREATED AS REGULAR BUSINESS LO SS AND EVEN DISALLOWANCE OF RS.2 LAKHS MADE BY THE ASSESSING OFFICER AS RELATABLE TO E XPENSES INCURRED ON SPECULATION TRANSACTION IS TO BE DELETED. THE STAND OF THE AUTHORITIES BELOW, THEREFORE, CANNOT BE UPHELD. IN OUR CONSIDERED VIEW AND FOR THE DETAILED REASONS SET OUT ABOVE, NO PART OF LOSSES INCURRED IN THE RELEVAN T PREVIOUS YEAR, WHICH ARE IMPUGNED IN APPEAL BEFORE US, CAN BE TREATED AS SPECUL ATION LOSS AND DISALLOWANCE OF EXPENSES AS RELATABLE TO SUCH LOSS CANNOT ALSO BE MADE SO FAR AS THE GRIEVANCE AGAINST LEVY OF INTEREST UNDER SECTION 234B AND 234C I S CONCERNED, IT IS ONLY CONSEQUENTIAL IN NATURE. NOW THAT THE ADDITIONS ARE DELETED, THE VERY FOUNDATION OF I.T.A NO.2312/ MUM/2011 ASSESSMENT YEAR: 2006-07 7 SUCH LEVY OF INTEREST CEASES TO EXIST. WITH THESE OBSERV ATIONS, THE GRIEVANCES OF THE ASSESSEE UPHELD. 7. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2012 SD/- (B.R.MITTAL) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 31 ST JANUARY, 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)10, MUMBAI 4. COMMISSIONER OF INCOME TAX, CITY-4, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH A MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI