ACIT 4(2), MUMBAI V. RAJEN C. SHETH, MUMBAI

ITA 2328/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70636 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 31-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: F V IRANI
• Assessee Lawyers: KISHAN VYAS
• Keywords: Speculation loss

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI . . , ! , ' # BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : 2328 / / 2012 A.Y. 2008-09 ITA NO. : 2328/MUM/2012 (ASSESSMENT YEAR: 2008-09) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 4(2), ROOM NO. 642, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI -400 020 VS SHRI RAJEN C. SHETH, C/O. RAJEN CHANDRAKANT, 47, TAMRIND STREET, FORT, MUMBAI -400 023 .: PAN: ABWPS 4554 Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI F.V. IRANI RESPONDENT BY : SHRI KISHAN VYAS ! /DATE OF HEARING : 31-07-2013 '# ! / DATE OF PRONOUNCEMENT : 07-08-2013 ' O R D E R ! , : PER VIVEK VARMA, JM: IN APPEAL ARISES FROM THE ORDER OF CIT(A) 8, MUMBAI, DATED 24.01.2012, WHEREIN THE DEPARTMENT HAS RAISED THE FOLLOWING GROU NDS: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING JOBBING LOSS OF RS . 60,37,111/- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE IMPUGNED ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW TO BE SET ASIDE A ND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. THE SOLITARY ISSUE PERTAINS TO THE ALLOWANCE OF JOBBING LOSS OF RS. 60,37,111/-. SHRI RAJEN C. SHET H ITA NO. 2328/MUM/2012 2 3. AT THE TIME OF HEARING, THE AR SUBMITTED THAT IDENTICA L ISSUE WAS THE SUBJECT MATTER OF APPEAL IN ASSESSMENT YEARS 2006 -07 AND 2007- 08, BEFORE THE ITAT AND PLACED THE COPIES OF THE ITAT OR DERS IN THE ASSESSEES OWN CASE, IN ITAS NO. 4731/MUM/2008, 4565/MU M/2008 AND 4229/2009 DATED 28.01.2011 AND ITA NO. 3054/MUM/2011 DATED 07.06.2013. 4. IN ASSESSMENT YEAR 2006-07, THE COORDINATE BENCH O F ITAT, MUMBAI, HELD, 18. RIVAL CONTENTIONS HEARD. THE ASSESSEE IN THIS CASE HAS ENTERED INTO BOTH FUTURE AND OPTION TRANSACTIONS AS WELL AS JOBBING T RANSACTIONS. IN FUTURE AND OPTIONS THE ASSESSEE HAS EARNED A PROFIT OF RS. 486/-. IN THE JOBBING TRANSACTIONS THE ASSESSEE HAS INCURRED A NET LOSS O F RS.17,95,527/-. THE ASSESSEE MAINLY DEALT IN 4 SCRIPT I.E. WHIRL POOL, VIJAYA BANK, TINPLATE AND LANCO INDUSTRIES. IN FACT EVEN IN THE DELIVERY BASED TRANSACTIONS, THE ASSESSEE MAINLY CONCENTRATED ON THESE 4 SCRIPTS. TH E LOSS IN QUESTION PERTAINS TO JOBBING TRANSACTIONS. THE FIRST APPELLA TE AUTHORITY HAS, IN OUR CONSIDERED OPINION, RIGHTLY ARRIVED AT A CONCLUSION , BASED ON THE MATERIAL BEFORE HIM, THAT THE TRANSACTIONS IN QUESTION ARE J OBBING TRANSACTIONS, AS FAR AS THE LOSS OF RS.17,59,527/- IS CONCERNED AND FALL U/S 43(5)(C) OF THE ACT AND HENCE NOT SPECULATION TRANSACTION. AT PARA 3.6 PAGE 8, THE FIRST APPELLATE AUTHORITY HELD AS FOLLOWS : 3.6 IT IS SEEN THAT THE APPELLANT HAS BEEN TRADIN G EXTENSIVELY IN THE 4 SCRIPTS OF WHIRL POOL, VIJAYA BANK, TINPLATE AND LANCO INDUSTRIES AND PROFIT FOR THE PERIOD 2002-03 TO 200 7-08 IS AT RS.2.87 CRORES AND LOSS IN TRADING IS RS.55.14 LAKH S AND THE LOSS OF JOBBING IN THE 4 SCRIPTS IS AT RS.83.57 LAK HS. THROUGH DETAILED SUBMISSION AND ANALYSIS, THE APPELLANT HAS DEMONSTRATED THAT THE JOBBING ACTIVITY WAS CARRIED OUT TO GUARD AGAINST THE LOSS WHICH MAY ARISE IN THE ORDINARY CO URSE OF BUSINESS. THUS, THE JOBBING ACTIVITY OF THE APPELLA NT FALLS WITHIN SECTION 43(5)(C) AND THE LOSS OF RS.17,59,268/- IS, THEREFORE, NOT A SPECULATION LOSS. THE A.O. IS DIRECTED TO TREAT T HE LOSS OF RS.17,59,268/- AS BUSINESS LOSS. GROUND NO. 3 IS AL LOWED.. WE AGREE WITH HIS FINDING AND DISMISS GROUND NO. 2 OF THE REVENUE. 5. IN ASSESSMENT YEAR 2007-08, THE COORDINATE BENCH O F ITAT, MUMBAI, FOLLOWING THE DECISION TAKEN IN ASSESSMENT YEAR 2006 -07, WHEREIN, THE COORDINATE BENCH, REPRODUCED THE RELEVANT P ORTION OF THE ORDER IN ASSESSMENT YEAR 2006-07. THE AR ALSO POINTED O UT THAT THE JOBBING WAS BEING DONE EXTENSIVELY WITH RESPECT OF FOUR- RECEIPTS, AS MENTIONED IN THE ORDERS OF THE ITAT, AS RELIED UPON. THE A R, THEREFORE, SUBMITTED THAT ON IDENTICAL FACTS, THE ISSUE IS IN FAVOUR OF THE ASSESSEE, SHRI RAJEN C. SHET H ITA NO. 2328/MUM/2012 3 IN THE PRECEDING YEARS, THE SAME SHOULD BE FOLLOWED IN THE CURRENT Y EAR AS WELL. 6. THE DR PLACED RELIANCE ON THE DECISION OF THE AO. 7. AFTER GOING THROUGH THE ORDERS OF THE COORDINATE BEN CH, WHICH HAS BEEN FOLLOWED BY THE CIT(A), WE DO NO FIND ANY REASONS TO DEVIATE FROM THE CONSISTENT STAND ALREADY TAKEN. 8. WE, THEREFORE, REJECT THE GROUND OF APPEAL. 9. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH AUGUST, 2013. SD/- SD/- ( . . ) ( ! ) (R.S. SYAL) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 7 TH AUGUST, 2013 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) ' '( ( ) - 8 MUMBAI / THE CIT (A)-8, MUMBAI. 4) ' '( MC--4 , MUMBAI / THE CIT4, MUMBAI, 5) *+, - , ' ! - , ./ / THE D.R. D BENCH, MUMBAI. 6) , 0 COPY TO GUARD FILE. '12 / BY ORDER / / TRUE COPY / / [ 3 / 4 5 ' ! - , ./ DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *784 . . * CHAVAN, SR. PS