THE AIR CARGO AGENTS ASSOCIATION OF INDIA, MUMBAI V. I.T.O.-3(1)(3), MUMBAI

ITA 2540/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71957 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 16-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Assessee Lawyers: B V JHAVERI
• Keywords: Capital asset; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI , BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM I.T.A. NO.2540/MUM/2012 ( ASSESSMENT YEAR: 2008-09) THE AIR CARGO AGENTS ASSOCIATION OF INDIA, 28, NARIMAN BHAVAN, NARIMAN POINT, MUMBAI 400 021 VS. I.T.O.-3(1)(4), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 ! ' ./PAN/GIR NO. AAACT 1460 B ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) & I.T.A. NOS.3043/MUM/2012 ( ASSESSMENT YEARS: 2008-09) I.T.O.-3(1)(4), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 VS. THE AIR CARGO AGENTS ASSOCIATION OF INDIA, 28 NARIMAN BHAVAN, NARIMAN POINT, MUMBAI - 400 021 ! ' ./PAN/GIR NO. AAACT 1460 B ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) &'()*+, / ASSESSEE BY : SHRI B.V. JHAVERI -+, / REVENUE BY : SHRI M. L. PERUMAL . -/+*0 DATE OF HEARING : 02.12.2013 123+*0 / DATE OF PRONOUNCEMENT : 13.12.2013 2 ITA NOD.2540 & 3043/MUM/2012 ( A.Y. 2008-09) THE AIR CARGO AGENTS ASSOCIATION 4 O R D E R PER SANJAY ARORA, A. M.: THESE ARE CROSS APPEALS, I.E., BY THE ASSESSEE AND THE REVENUE, ARISING OUT OF THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-5 , MUMBAI (CIT(A) FOR SHORT) DATED 15.02.2012, PARTLY ALLOWING THE ASSESSEES A PPEAL CONTESTING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT H EREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2008-09 VIDE ORDER DATED 28.12.2010. 2. WE SHALL TAKE UP THE ASSESSEES APPEAL, BEING SE NIOR, FIRST. THE ONLY ISSUE PER THE ASSESSEES APPEAL IS IN RESPECT OF NON-ALLOWANCE OF DEDUCTION FOR THE INDEXED COST OF ACQUISITION IN THE COMPUTATION OF LONG TERM CAPITAL GAINS, WHICH STANDS THUS DETERMINED BY THE ASSESSING OFFICER (A.O.) AT RS.931602/- AS A GAINST RS. 101656/- BY THE ASSESSEE PER ITS RETURN OF INCOME. WHILE THERE IS NO DISCUSS ION QUA THE SAME IN THE ASSESSMENT ORDER, THE LEARNED CIT(A), AFTER REPRODUCING THE AS SESSEES SUBMISSIONS AS WELL AS CONSIDERING THE REVISED COMPUTATION OF INCOME FOR T HE YEAR, PLACED BEFORE HIM BY THE ASSESSEE IN THE FORM OF A TABLE, DECIDED THE MATTER THUS: 4.2.I. FROM THE ABOVE, IT IS CRYSTAL CLEAR THAT TH E APPELLANT ITSELF HAS WORKED OUT CAPITAL GAIN OF 4.2.I. RS.9,31,602/- AFTER TAKING I NTO INDEXED COST, AND THEREFORE, THE AO HAS CORRECTLY TAKEN THE SAME AS LONG TERM CAPITAL G AIN. FURTHER, THE AO HAS TAKEN LONG TERM CAPITAL GAIN FOR RS.9,31,602/- AND AFTER SETTI NG OFF OF BROUGHT FORWARD LOSS OF RS.92,540/- FOR A.Y.2003-04, IT HAS BEEN FINALLY AR RIVED AT RS.8,39,062/- HENCE, THIS GROUND IS DISMISSED. 3. BEFORE US, THE ASSESSEES CASE WAS THAT THE INDE XED COST HAS NOT BEEN ALLOWED TO IT, AND WHICH IT IS ENTITLED TO IN VIEW OF THE FACT THA T THE CAPITAL ASSETS, GAINS ON TRANSFER OF WHICH IS BEING COMPUTED, ARE LONG TERM CAPITAL ASSE TS. PLACING ON RECORD A STATEMENT OF LONG TERM CAPITAL GAINS IN A TABULAR FORM (WHICH BE ARS THE SAME FIGURE AS REPRODUCED AT PARA 4.2 OF THE APPELLATE ORDER), IT WAS SUBMITTED BY HIM THAT THE LD. CIT(A) HAS WRONGLY HELD THAT THE AO HAD ALLOWED THE ASSESSEE DEDUCTION FOR THE INDEXED COST OF ACQUISITION, AS IS REQUIRED TO UNDER SECOND PROVISO TO SECTION 48 OF THE ACT. THE LD. DR WOULD, ON THE 3 ITA NOD.2540 & 3043/MUM/2012 ( A.Y. 2008-09) THE AIR CARGO AGENTS ASSOCIATION OTHER HAND, RELYING ON THE ORDERS OF THE AUTHORITIE S BELOW, SUBMIT THE LONG TERM CAPITAL GAINS TO HAVE BEEN CORRECTLY WORKED OUT IN THE INST ANT CASE. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE FACTS AND FIGURES ARE NOT IN DISPUTE; THE RELEVANT FIGURES, R EPRODUCED HEREIN-BELOW, HAVING BEEN IN FACT FURNISHED BY THE ASSESSEE PER ITS RETURN OF IN COME (PB 1, 2) AND REPRODUCED IN THE IMPUGNED ORDER ITSELF (VIDE PARA 4.2): STATEMENT OF LONG TERM CAPITAL GAINS SR. NO. PARTICULARS DATE OF PURCHASE DATE OF SALE COST INDEXED COST SALE PROCEEDS SALE LESS INDEXED COST GAIN (LOSS) 1 SUNDARAM MONTHLY INCOME PLAN 27.03.2006 29.06.2007 5,00,000 5,54,326 5,30,263 (24,063) 30,263 2 LIC MF-MIP 20.03.2006 29.06.2007 14,50,000 16,07,545 15,88,587 (18,958) 1,38,5 87 3 PRUDENTIAL ICICI MULTIPLIER 03.03.2006 27.08.2007 5,00,000 5,54,326 5,78,293 23,967 78,293 4 HDFC MIP 27.03.2006 30.08.2007 15,00,000 16,62,978 17,27,094 64,116 2,27,09 4 5 LIC FMP 17.10.2006 30.11.2007 65,00,000 1,04,50,000 69,00,771 1,12,79,946 69,57,365 1,13,81,602 56,594 1,01,656 4,57,365 9,31,602 IT IS APPARENT FROM THE TABLE REPRODUCED HEREINABOV E THAT THE ASSESSEE HAS NOT BEEN ALLOWED CREDIT FOR THE INDEXED COST OF ACQUISITION, BUT ONLY THE ACTUAL COST OF ACQUISITION. THE LD. CIT(A) HAS CLEARLY ERRED IN HOLDING OTHERWI SE, RECORDING A FINDING WITHOUT VERIFYING AND CASTING THE VARIOUS FIGURES. THE DATE S OF ACQUISITION AND TRANSFER AS WELL AS THEIR RESPECTIVE VALUES ARE ALSO NOT IN DISPUTE. 5. IN VIEW OF THE FORGOING, WE HAVE NO HESITATION I N ACCEPTING THE ASSESSEES CLAIM WITH REGARD TO IT HAVING NOT BEEN ALLOWED INDEXED C OST OF ACQUISITION. THE BROUGHT FORWARD LONG TERM CAPITAL LOSS FOR A.Y. 2003-04 STA NDS ALREADY ALLOWED BY THE AO (REFER PARA 10(II)/PAGE 4 OF THE ASSESSMENT ORDER), SO THA T THE ASSESSEES GROUND NO.3 BEFORE US HAS NO PARTICULAR SIGNIFICANCE. THE MATTER IS ACCOR DINGLY SET ASIDE TO THE FILE OF THE A.O. TO ALLOW THE ASSESSEE INDEX COST OF ACQUISITION IN COMPUTING THE LTCG. WE DECIDE ACCORDINGLY. 4 ITA NOD.2540 & 3043/MUM/2012 ( A.Y. 2008-09) THE AIR CARGO AGENTS ASSOCIATION 6. COMING TO THE REVENUES APPEAL, THE SAME RAISES A SINGLE ISSUE, I.E., THE MAINTAINABILITY IN LAW OF THE ADDITION IN THE SUM O F RS.56.83 LACS RECEIVED BY THE ASSESSEE AS CONTRIBUTION FROM MEMBERS OF THE ASSESSEE-ASSOCI ATION AND INVESTED IN MUTUAL FUNDS. IT WAS THE COMMON CONTENTION OF THE PARTIES BEFORE US THAT THE MATTER AT HAND IS SQUARELY COVERED BY THE DECISION BY THE TRIBUNAL IN THE ASSE SSEES OWN CASE FOR A.Y. 2007-08 (IN ITA NO. 1774/MUM/2012 DATED 21.3.2013 / PB PGS.75-7 9). 7. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE TRIBUNAL HAS IN THE ASSESSEES OWN CASE FOR AN EARLIER YEAR DISMISS ED THE REVENUES APPEAL RAISING THE SAME ISSUE AS BEFORE US (AS APPARENT FROM THE READI NG OF THE ONLY GROUND OF APPEAL, REPRODUCED AT PARA 2 OF THE SAID ORDER), FOLLOWING THE DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. COMMON EFFLUENT TREATMENT PLANT (THANE BELAPUR) ASSOCIATION [2010] 328 ITR 362 (BOM), HOLDING THUS: 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS AND PERUSED THE RECORD. AS CORRECTLY POINTED OUT BY THE LEARNED COU NSEL FOR THE ASSESSEE WE ARE CONCERNED HERE WITH THE CONTRIBUTIONS MADE BY T HE MEMBERS OF THE ASSOCIATION. IT IS NOT IN DISPUTE THAT THE AMOUNT C OLLECTED FROM THE MEMBERS WERE UTILISED FOR THE WELFARE OF THE MEMBERS. THE C ASE OF THE REVENUE IS THAT MAKING USE OF THE FUNDS FOR DEPOSITING THE SAM E IN THE BANKS VIOLATED THE PRINCIPLES OF MUTUALITY. AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE THE DECISION IN THE CASE OF BANGALORE CLUB (SUPRA) IS DISTINGUISHABLE ON FACTS. ON THE OTHER HAND, THERE IS A DIRECT DECISION OF THE HON'BLE BOMBAY HIGH COURT WHEREIN ON IDENTICAL CIRC UMSTANCES THE HON'BLE HIGH COURT OBSERVED THAT DEPOSITING EXCESS FUNDS WITH THE BANKS/FINANCIAL INSTITUTIONS WOULD NOT RENDER UTILI SATION OF THE FUNDS FOR PURPOSES OTHER THAN MUTUAL BENEFIT AND THE COURT OB SERVED THAT THE DOCTRINE OF MUTUALITY IS APPLICABLE IN SUCH CASES. SINCE THE VIEW TAKEN BY THE LEARNED CIT(A) IS IN CONFORMITY WITH THE VIEW TAKEN BY THE HON'BLE JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY MERIT IN THE CONTENT ION OF THE REVENUE AND THUS THE APPEAL FILED BY THE REVENUE IS DISMISSED. 8. IN VIEW OF THE FOREGOING; THE FACTS BEING THE SA ME AS FOR THE EARLIER YEAR, RESPECTFULLY FOLLOWING THE DECISION IN THE ASSESSEE S OWN CASE FOR A.Y. 2007-08 (SUPRA), WE CONFIRM THE IMPUGNED ORDER. WE DECIDE ACCORDINGL Y. 5 ITA NOD.2540 & 3043/MUM/2012 ( A.Y. 2008-09) THE AIR CARGO AGENTS ASSOCIATION 9. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED AND THE REVENUES APPEAL DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 13, 2013 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER . 5/ MUMBAI; 6 DATED : 13.12.2013 & . ./A.K.PATEL. PS ! ' #$%& '&$ / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. . 7* ( ) / THE CIT(A) 4. . 7* / CIT CONCERNED 5. 8-9: $&*&;' , 0 ;'3 , . 5/ / DR, ITAT, MUMBAI 6. :(