HIRAVANTI V. SHAH, MUMBAI V. DCIT CIR 22(2), NAVI MUMBAI

ITA 2509/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79183 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 02-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBER DAS
• Assessee Lawyers: SHAILESH N DOSHI
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.2509/MUM/2013, A.Y. 2008-09. SMT. HIRAVANTI V. SHAH, C/O.S.NARENDRAKUMAR & CO., 5 TH FLOOR, KRUSHAL COMMERCIAL COMPLEX, G.M.ROAD, CHEMBUR (W), MUMBAI 400089 PAN: AAMPS 9120K (APPELLANT ) VS. DY. COMMISSIONER OF INCOME TAX- CIRCLE 22(2), VASHI RLY. STATION COMPLEX, TOWER NO.6, 4 TH FLOOR, VASHI, NAVI MUMBAI 400 703. (RESPONDENT) APPELLANT BY : SHRI SHAILESH N. DOSHI RESPONDENT BY : SHRI PI TAMBER DAS DATE OF HEARING : 03/07/20 14 DATE OF PRONOUNCEMENT : 03/07/2014 ORDER PER I.P.BANSAL, J.M, THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST ORDER PASSED BY LD. CIT(A)-33, MUMBAI DATED 28/01/2013 FOR ASSES SMENT YEAR 2008-09. 2. AT THE OUTSET IT WAS POINTED OUT BY LD.AR THAT IMPUGNED ASSESSMENT IS AN ORDER DATED 14/9/2011 PASSED UNDER SECTION 143(3) R .W.S. 263 OF THE INCOME TAX ACT, 1961(THE ACT). HE FURTHER POINTED OUT THAT OR DER PASSED UNDER SECTION 263 OF THE ACT BY THE COMMISSIONER OF INCOME TAX ON THE BA SIS OF WHICH AFOREMENTIONED IMPUGNED ASSESSMENT ORDER HAS BEEN PASSED IS QUASH ED BY THE TRIBUNAL VIDE ITS DECISION DATED 20/11/2013 IN ITA NO.625/MUM/2011. LD. AR HAS SUBMITTED A COPY OF THE SAID DECISION BEFORE US. IN THE SAID DECISION THE ORDER PASSED UNDER SECTION 263 WAS SET ASIDE WITH THE FOLLOWING OBSER VATIONS: ITA NO.2509/MUM/2013, A.Y. 2008-09 . 2 8. IT IS CLEAR FROM THE SHOW-CAUSE NOTICE THAT THE REASON FOR INITIATION OF PROCEEDINGS U/S 263 WAS TREATING THE CAPITAL GAIN AS INCOME FRO M OTHER SOURCES. WHILE CONCLUDING THE FINDINGS THE COMMISSIONER HAS RECORD ED THE REASONS AND CONCLUSION IN PARA 5 OF THE IMPUGNED ORDER AS UNDER: 5. THE WHOLE EXERCISE OF THE ASSESSEE IS TO BOOK THE FLATS AT THE CONSTRUCTION STAGE AND WITHOUT ACTUALLY BUYING THE WHOLE FLAT BU T SELLING THIS BOOKING AT A SUBSEQUENT DATE WITHOUT GETTING THE POSSESSION OF T HE FLAT. THE WHOLE EXERCISE IS SPECULATIVE IN NATURE WITH AN EYE TO MA KE QUICK PROFITS. IT CANNOT BE SAID TO BE LONG TERM CAPITAL GAIN TRANSACTIONS W HEN THE ASSESSEE FIRST BOOKS THE FLATS AND THEN WITHOUT MAKING THE FULL PA YMENTS OF THE FLATS AND SUBSEQUENTLY SELLS THE ALLOTMENT OF THE FLAT. SUCH A GAIN WOULD NOT BE LONG TERM CAPITAL GAIN WHERE AS IN THE INSTANT CASE THE ASSESSEE ENTERS INTO A SPECULATIVE TRANSACTION INVESTMENT FOR MAKING A QUI CK PROFIT. IT IS MORE IN THE NATURE OF ADVENTURE AND TRADE AND WOULD BE A BUSINE SS PROFIT. 9. IT IS MANIFEST FROM THE SHOW-CAUSE NOTICE AND PA RTICULARLY THE UNDERLINE PORTION THAT AT THE TIME OF ISSUING THE SHOW-CAUSE NOTICE THE COMMISSIONER FOUND THE CAPITAL GAIN OFFERED BY THE ASSESSEE HAS TO BE ASSE SSED AS INCOME FROM OTHER SOURCES WHEREAS THE CONCLUSION DRAWN WHILE PASSING THE ORDER, THE COMMISSIONER HAS HELD THAT THE CAPITAL GAIN IS ARISING OUT OF SP ECULATIVE TRANSACTION AND, THEREFORE, TO BE ASSESSED AS BUSINESS PROFIT. THIS IS A CLEAR DEPARTURE OF CONCLUSION FROM THE REASON FOR INITIATING THE REVISION PROCEEDINGS THER EFORE, IN VIEW OF THE DECISION OF CO- ORDINATE BENCH IN CASE OF SYNERGY ENTREPRENEUR SOLU TIONS (P) LTD. VS DCIT (SUPRA) AS WELL AS GEOMETRIC SOFTWARE SOLUTIONS CO. LTD. VS ACIT (SUPRA) THE IMPUGNED ORDER IS NOT SUSTAINABLE AND LIABLE TO BE SET ASIDE . ACCORDINGLY WE SET ASIDE THE REVISION ORDER OF THE COMMISSIONER. REFERRING TO AFOREMENTIONED DECISION IT WAS PLEAD ED BY LD. AR THAT SINCE THE VERY BASIS OF PASSING THE IMPUGNED ASSESSMENT ORDER DOES NOT EXIST, THE IMPUGNED ASSESSMENT ORDER DOES NOT SURVIVE AND THE APPEAL FILED BY THE ASSESSEE SHOULD BE ALLOWED ON THIS GROUND ONLY. 3. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS PASSED BY A.O AND LD. CIT(A). 4. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. SINCE THE VERY BASIS OF THE IMPUGNED A SSESSMENT ORDER I.E. ORDER PASSED UNDER SECTION 263 HAS BEEN SET ASIDE, THE IM PUGNED ASSESSMENT ORDER DOES NOT REMAIN VALID. THEREFORE, FOR THIS REASON THE APPEAL FILED BY THE ASSESSEE ITA NO.2509/MUM/2013, A.Y. 2008-09 . 3 IS ALLOWED AND IMPUGNED ASSESSMENT ORDER AS WELL AS ORDER PASSED BY LD. CIT(A) ARE SET ASIDE AND CANCELLED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 03/07/2014 ! ' #$ % &'( 03/07/2014 ' ) SD/- SD/- ( /SANJAY ARORA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; &' DATED 03/07/2014 ! ! ! ! ' '' ' *+, *+, *+, *+, -,$+ -,$+ -,$+ -,$+ / COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. *0./ / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 5. ,2) *+' , , / DR, ITAT, MUMBAI 6. )3 4 / GUARD FILE. !' !' !' !' / BY ORDER, 0,+ *+ //TRUE COPY// 5 55 5 / 6 6 6 6 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . ./ VM , SR. PS ITA NO.2509/MUM/2013, A.Y. 2008-09 . 4 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 03/07/2014 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 03/07/2014 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER