ACIT, New Delhi V. M/s Nalini Jewellers, New Delhi

ITA 2395/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2830 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 29-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Assessee Lawyers: NIKHIL JAIN PARTNER
• Keywords: Proportionate interest; Notional interest; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.2395/DEL/2016 ASSESSMENT YEAR: 2012-13 ACIT, CIRCLE-51(1), NEW DELHI. VS NALINI JEWELLERS, 16/2646-49, BANK STREET, KAROL BAGH, NEW DELHI. PAN: AAEFN2292D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NIKHIL JAIN, PARTNER REVENUE BY : MS ASHIMA NEB, SR. DR DATE OF HEARING : 22.08.2019 DATE OF PRONOUNCEMENT : 02.09.2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 24 TH FEBRUARY, 2016 OF THE CIT(A)-17, NEW DELHI RELATING TO ASSESSMENT YEAR 2012-13. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TRADING AND MANUFACTURING OF GOLD A ND DIAMOND JEWELLERY. IT FILED ITS RETURN OF INCOME ON 19 TH JULY, 2012 DECLARING TOTAL INCOME OF RS.1,34,82,20 2/- THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143( 3) ON 5 TH MARCH, 2015 DETERMINING THE TOTAL INCOME AT RS.2,92,31,520/- WH EREIN HE MADE THE FOLLOWING ADDITIONS:- ITA NO.2395/DEL/2016 2 I) RS.1,54,29,231/- ON ACCOUNT OF GAIN ON ACCOUNT O F FORWARD CONTRACTS IN RESPECT OF FOREIGN CURRENCY BEING SPECULATIVE PROFI TS; II) RS.1,72,524/- BEING PROPORTIONATE INTEREST ON A CCOUNT OF INTEREST FREE ADVANCES GIVEN; III) RS.80,205/- ON ACCOUNT OF DISALLOWANCE OF VARI OUS EXPENSES; AND IV) RS.67,364/- ON ACCOUNT OF DISALLOWANCE OF DEPRE CIATION. 3. IN APPEAL, THE LD.CIT(A) HELD THAT THE GAIN OF R S.1,54,29,231/- DERIVED ON ACCOUNT OF FORWARD CONTRACTS IN RESPECT OF FOREIGN CURRENCY BEING SPECULATIVE PROFIT CAN BE SET OFF AGAINST THE LOSS OF RS.62,94,000/- D EBITED IN GOLD DESK ACCOUNT. HE ALSO DELETED THE ADDITION OF RS.1,72,524/- MADE BY THE A SSESSING OFFICER ON ACCOUNT OF NOTIONAL INTEREST. HE, HOWEVER, SUSTAINED THE TWO O THER ADDITIONS MADE BY THE ASSESSING OFFICER. AGGRIEVED WITH SUCH PART RELIEF GRANTED BY THE CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL CHALLENGIN G THE DELETION OF RS.1,72,524/- AND HOLDING THAT THE GAIN OF RS.1,54,29,231/- DERIVED O N ACCOUNT OF FORWARD CONTRACTS IN RESPECT OF FOREIGN CURRENCY BEING SPECULATIVE PROFI T CAN BE SET OFF AGAINST THE LOSS OF RS.62,94,000/- DEBITED IN GOLD DESK ACCOUNT. 4. SHRI NIKHIL JAIN, PARTNER OF THE ASSESSEE FIRM A PPEARED IN PERSON AND SUBMITTED THAT THE APPEAL FILED BY THE ASSESSEE AGAINST THE O RDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2010-11 HAVE BEEN SET ASIDE BY THE HON'BLE HIG H COURT TO THE FILE OF THE ASSESSING OFFICER. SIMILARLY, THE APPEAL OF THE AS SESSEE FOR THE IMPUGNED ASSESSMENT YEAR HAS BEEN RESTORED BY THE TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER WITH CERTAIN ITA NO.2395/DEL/2016 3 DIRECTIONS. HE ACCORDINGLY SUBMITTED THAT HE HAS N O OBJECTION IF THE APPEAL FILED BY THE REVENUE IS ALSO RESTORED TO THE FILE OF THE ASSESSI NG OFFICER FOR FRESH ADJUDICATION IN THE LIGHT OF THE DECISION OF THE HON'BLE HIGH COURT FOR ASSESSMENT YEAR 2010-11. 5. THE LD. DR HAS NO OBJECTION FOR RESTORING THE IS SUES TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE LIGHT OF THE DIRECTION OF THE TRIBUNAL. 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD. IN VIEW OF THE CONSENT BY BOTH THE SIDES THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF THE ASSESSING OFFICER IN THE LIGHT OF THE DECISION OF THE HON'BLE HIGH COURT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010-11, WE RESTORE BOTH THE IS SUES RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL TO THE FILE OF THE ASSESSING OFFI CER FOR FRESH ADJUDICATION. NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL GIVE DUE OPPORT UNITY OF BEING HEARD TO THE ASSESSEE AND DECIDE THE ISSUE AS PER FACT AND LAW. WE HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY ALLOWED FOR S TATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE REV ENUE IS ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 0 2.09.2019. SD/- SD/- (SUCHITRA KAMBLE) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 02 ND SEPTEMBER, 2019 DK ITA NO.2395/DEL/2016 4 COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI