DCIT 4(1), MUMBAI V. GUPTA EQUITIES P. LTD, MUMBAI

ITA 2315/MUM/2012

• Counselvise Citation: 231519914 RSA 2012
• Duration Of Justice: 2 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 15-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHA KALA CHANDA
• Assessee Lawyers: VIJAY MEHTA
• Keywords: Depreciation; Opportunity of being heard; Cost of acquisition

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNALG BENCH, MUMB AI BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIVEK VAR MA, JM . , ! !! ! ' # , $ % % % % & && & ITA NO. 1472/MUM/2012 ASSESSMENT YEAR-2008-09 M/S GUPTA EQUITIES PVT. LTD. D/21, DHANRAJ MAHAL, CSM MARG, COLABA, MUMBAI-400039 ' ' ' ' / VS. ACIT, RANGE-4(1), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI. ( ./ PAN :AAACG5741M ( () /ASSESSEE ) .. ( *+() / RESPONDENT ) ITA NO. 2315/MUM/2012 ASSESSMENT YEAR-2008-09 DCIT, RANGE-4(1),6 TH FLOOR, ROOM NO.640 AAYAKAR BHAVAN, M.K.ROAD, MUMBAI. ' ' ' ' / VS. M/S GUPTA EQUITIES PVT. LTD. D/21, DHANRAJ MAHAL, CSM MARG, COLABA, MUMBAI-400039 ( ./ PAN :AAACG5741M ( () /ASSESSEE ) .. ( *+() / RESPONDENT ) () , - / ASSESSEE BY : SHRI VIJAY MEHTA , - / REVENUE BY : SMT. ABHA KALA CHANDA CIT-DR ' , . / DATE OF HEARING : 15/05/2014 /01 , . / DATE OF PRONOUNCEMENT : 28/05/2014 2 2 2 2 / ORDER PER D. KARUNAKARA RAO, AM: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND T HE REVENUE AGAINST THE ORDER OF THE CIT(A) DATED 18/01/2012. 2. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE MENTI ONED THAT THE GROUNDS OF THE APPEALS IN BOTH THE APPEALS ARE INTE RCONNECTED AND GROUND NO.1 IS RELEVANT IN THIS REGARD. REFERENCE T O THE GROUND NO.1 2 ITA NO.1472/MUM/2012 & ORS. M/S GUPTA EQUITIES PVT. LTD. OF THE ASSESSEE AS WELL AS THE REVENUE, HE MENTIONE D THAT THESE GROUNDS, RELATINGTO THE CLAIM ON REPAIRS AND MAINTE NANCE, ARE REQUIRED TO BE SET-ASIDE TO THE FILES OF THE REVENU E FOR FRESH ADJUDICATION. TO SUBSTANTIATE THE ABOVE, LD. COUNS EL BROUGHT OUR ATTENTION TO THE ASSESSMENT ORDER AND MENTIONED THA T THE REPAIR AND MAINTENANCE EXPENSES AMOUNTING TO RS.54,49,517/- AR E HELD CAPITAL IN NATURE AND THUS THE AO MADE ADDITION IN THE ASSESSMENT. 3. IN THE APPEAL PROCEEDINGS BEFORE THE CIT(A), ASS ESSEE MADE SUBMISSIONS AGAINST THE SAID ADDITION. HOWEVER THE CIT(A) AFTER DISCUSSING SUCH DECISIONS HELD AS UNDER.- THE EXPENDITURE INCURRED BY THE APPELLANT IS DEFIN ITELY IN RELATION TO ANY BY WAY OF RENOVATION OR EXTENSION O F OR IMPROVEMENT TO THE BUILDING BUT SAME IS NOT RELATED TO COLABA OFFICE AS SUBMITTED BEFORE ME AND DURING ASSESSMENT PROCEEDINGS. IN VIEW OF SAID FACT, THE DISALLOWANC E RELATE TO COLABA OFFICE IS CORRECTLY MAD EBY AO. THUS, DISALLOWANCE OUT OF REPAIRS & MAINTENANCE ON BUILDING WILL BE RESTRICTED TO RS.15,50,790/- AND APPELLANT WILL BE ENTITLED TO DEPRECIATION AS DECIDED BY AO. ACCORDINGLY, OTHER DISALLOWANCE IS CONFIRMED . IN THE RESULT, THIS GROUND OF APPEAL IS PARTLY ALLOWED READING THE ABOVE PARAGRAPH OF THE IMPUGNED ORDER, LD. COUNSEL DEMONSTRATED THAT THE SUM OF RS.15,50,790/- WAS CON FIRMED. FURTHER, HE ALSO MENTIONED THAT OTHER DISALLOWANCE I S ALSO CONFIRMED. IT IS NOT CLEAR AS TO WHICH OTHER DISALLOWANCE IS C ONFIRMED. AS PER LD. COUNSEL, WHAT IS FINALLY DELETED OR CONFIRMED IS NO T CLEAR FROM THE SAID PARAGRAPH ABOVE. 4. FURTHER BRINGING OUR ATTENTION TO THE APPEAL OF T HE REVENUE, THE COUNSEL READ OUT THE GROUND NO.1 OF THE REVENUE AND MENTIONED THAT RS.15,50,790/- IS ALLOWED. THUS THERE IS A ADEQUAT E CONFUSION IN THE ORDER OF THE CIT(A). LD. COUNSEL SAYS THAT GROUND NO.1 IS NOT 3 ITA NO.1472/MUM/2012 & ORS. M/S GUPTA EQUITIES PVT. LTD. PROPERLY RAISED. FURTHER, BRINGING OUR ATTENTION TO THE ASSESSMENT ORDER IN HIS FAVOUR ON THIS ISSUE, THE COUNSEL DEMO NSTRATED THE AO HAS NOT EXAMINED ITEM WISE REPAIRS CLAIMING TO FINA LLY HOLD THAT EACH OF THEM ARE CAPITAL IN NATURE. CONSIDERING ALL THE SE OBJECTIONS AND THE DEFICIENCIES DESCRIBED ABOVE, BOTH THE PARTIES MENTIONED THAT THIS ISSUE IS REQUIRED TO BE ADJUDICATED BY THE ASSESSIN G OFFICER ONCE AGAIN AFTER GRANTING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE FIND MERIT IN THE SAME. ACCORDINGLY, WE REMAND GROUND NO.1 OF THE ASSESSEES AS WELL AS THE REVENUES APPEAL FOR COMPREHENSIVE ADJUDICATION BY AO BY PASSING A SPEAKING ORDER AFTE R CONDUCTING DETAILED ANALYSIS AND ITEM WISE EXPENDITURE WAS INV OLVED MENTIONING HOW THE EXPENDITURE IS OF CAPITAL IN NATURE. ACCOR DINGLY THE SAID GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES IN BOT H THE APPEALS. 5. REFERRING TO GROUND NO.2 OF THE ASSESEES APPEAL , THE COUNSEL MENTIONED THAT THE CIT(A) ERRED IN CONFIRMING THE C ALCULATION OF LONG TERM CAPITAL GAIN AND SALE OF THE SHARES OF THE BSE LTD. IGNORING THE PROVISIONS OF SECTION 55(2)(AB) OF THE ACT. 6. AT THE OUTSET, LD. COUNSEL FILED A DECISION OF T HE TRIBUNAL IN THE CASE OF M/S PARAG PARIKH FINANCIAL ADVISORY SERVICES LTD. IN ITA NO.3118/MUM/2012 DATED 29/01/2014 AND MENTIONED THA T THE IDENTICAL ISSUE CAME FOR ADJUDICATION. ACCORDING TO THE SAID DECISION, THE SHARES ARE DEEMED TO BE ACQUIRED ON THE DATE OF ACQUISITION OF BSE CARD AND NOT FROM THE DATE OF THEIR CONVERSIO N. IN THIS REGARD, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE PARA 10 OF THE SAID ORDER OF THE TRIBUNAL (SUPRA) WE PERUSED T HE SAME AND PARA 10 READS AS UNDER:- SO FROM THE ABOVE STATED EXPRESS PROVISIONS, IT IS CLEAR THAT THE COST OF ACQUISITION OF BSE CARD SHALL BE THE COST OF A CQUISITION OF BSE 4 ITA NO.1472/MUM/2012 & ORS. M/S GUPTA EQUITIES PVT. LTD. SHARES AND THE SHARES ARE DEEMED TO BE ACQUIRED ON THE DATE OF ACQUISITION OF BSE CARD AND NOT FROM THE DATE OF THEIR CONVERSION. HENCE, THE DATE OF HOLDING/ACQUISITION OF AN ASSET BEING EQUITY SHARES ALLOTTED PURSUANT TO DEMUTUALIZATION OR CORPORATIZA TION OF A RECOGNIZED STOCK EXCHANGE WILL BE THE DATE OF ACQUISITION OF O RIGINAL BSE CARD. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND THE ENHANCEMENT OF INCOME MADE BY THE CIT(A) ON THIS AC COUNT IS HEREBY ORDERED TO BE DELETED. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT T HE ISSUE RAISED BY THE ASSESSEE IN GROUND 2 AND 3 ARE ALLOWE D. 7. IN THE RESULT APPEAL OF THE ASSESSEE AND REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28/05/2014. 2 , /01 3 4'5 28/05/2014 0 , 6 & SD/- SD/- VIVEK VARMA D.KARUNAKARA RAO (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) MUMBAI , 4' 4' 4' 4' DATED: 28/05 /2014 F{X~{T? P.S. 2 , *$.7' 8'1. / COPY OF THE ORDER FORWARDED TO : (1) $' #9. / THE ASSESSEE; (2) / THE REVENUE; (3) :() / THE CIT(A); (4) : / THE CIT, MUMBAI CITY CONCERNED; (5) '=6 *$.$' , , / THE DR, ITAT, MUMBAI; (6) 6# > / GUARD FILE. +'. *$. / TRUE COPY 2' / BY ORDER ? / @ / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI,