HAMSONS LABORATORIES P.LTD, MUMBAI V. DCIT(OSD) RG 8(2), MUMBAI

ITA 2558/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5095 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 10-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Share purchase agreement; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & SANDEEP GOSAIN (JM) I.T.A. NO. 2558 /MUM/20 1 7 (ASSESSMENT YEAR 20 11 - 12 ) HAMSONS LABORATORIES PVT. LTD. 12, HORNBY VIEW BUILDING GUNBOW STREET, FORT MUMBAI - 40001. PAN NO. AAACH1550P VS. ACIT 10(1)(1) (ERSTWHILE DCIT - 8(2) AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI DHARMESH SHAH DEPARTMENT BY SHRI RAJORE SATISHCHANDRA R. DATE OF HEARING 16 . 10 . 201 8 DATE OF PRO NOUNCEMENT 16 . 10 . 201 8 O R D E R PER B.R. BASKARAN (AM) : - THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 21 - 03 - 2016 PASSED BY LD CIT(A) - 17, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2011 - 12. THE ASSESSEE IS AGGRIEVED BY THE DE CISION OF LD CIT(A) IN CONFIRMING DISALLOWANCE OF SHORT TERM CAPITAL LOSS OF RS.37.70 LAKHS ARISING ON SALE OF SHARES OF M/S FOUR M PROPACK P LTD. 2. THE LD A.R SUBMITTED THAT THE ASSESSEE, ALONG WITH OTHER PERSONS, SOLD THEIR SHAREHOLDING HELD IN M/S FOUR M PROPACK P LTD TO M/S GOLDEN CROSS PHARMA P LTD, A SUBSIDIARY OF M/S CIPLA LTD. ALL THE PERSONS SOLD THE SHARES AT LOWER PRICE RESULTING IN CAPITAL LOSS. IT WAS NOTICED THAT THE ASSESSEE HAD MADE CAPITAL GAIN ON SALE OF OTHER SHARES AND HENCE THE AO TOOK THE VIEW THE LOSS HAS BEEN GENERATED ONLY TO SET IT OFF AGAINST THE CAPITAL GAIN. ACCORDINGLY HE DISALLOWED THE LOSS AND THE SAME WAS ALSO CONFIRMED BY LD CIT(A). 3. THE LD A.R SUBMITTED THAT THE AO HAD MADE IDENTICAL DISALLOWANCES IN OTHER CONCE RNS ALSO ON IDENTICAL REASONING. THE TRIBUNAL HAS CONSIDERED THE IDENTICAL ISSUE IN THE CASE OF SAGA CHEMICALS P LTD & OTHERS (ITA HAMSONS LABORATORIES PVT. LTD. 2 NO.104/MUM/2015 & OTHERS) HAS RESTORED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER. ACCORDINGLY THE LD A.R PRAYED THAT THE ISSUE CONTESTED HEREIN MAY ALSO BE RESTORED TO THE FILE OF THE AO WITH SIMILAR DIRECTIONS. 4. WE HEARD LD D.R AND PERUSED THE RECORD. WE NOTICE THAT THE CO - ORDINATE BENCH HAS CONSIDERED AN IDENTICAL ISSUE IN THE CASE OF SAGA CHEMICALS P LTD & OTHERS (SUPRA) AND IT HAS RESTORED THE MATTER TO THE FILE OF THE AO WITH THE FOLLOWING OBSERVATIONS: - 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. WE FIND THAT THE LD. AR OF THE ASSESSEE HAS FILED BEFORE THE TRIBUNA L A PAPER BOOK (P/B) CONTAINING INTER ALIA (I) CONFIRMATION FROM CIPLA LTD. FOR ACQUISITION OF SHARES OF GOLDEN CROSS PHARMA PVT. LTD. DATED 11.06.2014, (II) CONFIRMATION FROM GOLDEN CROSS PHARMA PVT. LTD. FOR ACQUISITION OF SHARES OF FOUR M PROPACK PVT. L TD. DATED 18.06.2014 AND (III) COPY OF SHARE PURCHASE AGREEMENT DATED 10.05.2010 EXECUTED BETWEEN GOLDEN CROSS PHARMA PVT. LTD. AND CIPLA LTD. IT IS STATED BY THE LD. COUNSEL THAT THE ABOVE DOCUMENTS WERE AVAILABLE BEFORE THE AO AND THE LD. CIT(A). AT THIS JUNCTURE, WE REFER TO PAGE 9 OF THE ORDER DATED 11.12.2014 PASSED BY THE LD. CIT(A) AND FIND THAT THE ASSESSEE HAD SUBMITTED, DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE HIM THE FOLLOWING : 'THE OBSERVATIONS IN PARA 4(VIII) HAVE BEEN MADE BY THE ASS ESSING OFFICER MERELY OUT OF HIS BELIEF WITHOUT AGAIN TAKING INTO ACCOUNT THE CONFIRMATION OF CIPLA LTD. WHICH EXPLAINS THE CIRCUMSTANCES UNDER WHICH THE SAID SHARES WERE ACQUIRED BY THE APPELLANT. IT IS THEREFORE SUBMITTED THAT THE CONCLUSION DRAWN BY THE ASSESSING OFFICER IN THE ENTIRE REMAND REPORT IS WITHOUT CONSIDERING THE EVIDENCES FILED BY THE APPELLANT. IF THE ASSESSING OFFICER WAS NOT CONVINCED, HE COULD HAVE ENQUIRED WITH CIPLA LTD. AND GOLDEN CROSS PHARMA PVT. LTD. TO CONFIRM THE FACTS. WITHOUT A NY EVIDENCE ON RECORD, HE COULD NOT HAVE DOUBTED THE TRANSACTION AS NOT GENUINE.' 6.1 WE ARE OF THE CONSIDERED VIEW THAT THE CONTENTIOUS ISSUES IN THE INSTANT CASE COULD BE RESOLVED BY EXAMINING CIPLA LTD. AND GOLDEN CROSS PHARMA PVT. LTD. A PROPER HEARING MUST ALWAYS INCLUDE AN OPPORTUNITY TO THOSE WHO ARE PARTIES IN THE CONTROVERSY FOR CORRECTING OR CONTRADICTING ANYTHING PREJUDICIAL TO THEIR VIEW. HAMSONS LABORATORIES PVT. LTD. 3 THE HON'BLE SUPREME COURT IN STATE OF KERALA VS. K.T. S HADULI GROCERY DEALER AIR 1977 SC 1627, RECOGNISED THE IMPORTANCE OF ORAL EVIDENCE BY HOLDING THAT THE OPPORTUNITY TO PROVE THE CORRECTNESS OR COMPLETENESS OF THE RETURN NECESSARILY CARRY WITH IT THE RIGHT TO EXAMINE WITNESSES AND THAT INCLUDES EQUALLY TH E RIGHT TO CROSS - EXAMINE WITNESSES. THE SAME HAS BEEN REITERATED IN ITO VS. M. PIRAI CHOODI (2012) 20 TAXMANN.COM 733 (SC). WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO T HE FILE OF THE AO TO MAKE AN ASSESSMENT DE NOVO BY SAGA CHEMICALS, SHREE RIDDHI CHEMICALS & RAJKUMAR GARMENTS 8 ITA NO. 104, 534/MUM/2015 & 6899/MUM/2014 EXAMINING THE ABOVE CONCERNS AND GIVING AN OPPORTUNITY TO THE ASSESSEE TO CROSS - EXAMINE THEM. WE DIREC T THE ASSESSEE TO FILE THE RELEVANT DOCUMENTS/EVIDENCE BEFORE THE AO. NEEDLESS TO SAY THE AO WOULD GIVE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE FINALIZING THE ASSESSMENT ORDER. AS WE HAVE SET ASIDE THE CASE, WE ARE NOT ADVERTING TO THE CASE LAWS RELIED ON BY THE LD. COUNSELS. 7. FACTS BEING SIMILAR, OUR DECISION IN THE CASE OF M/S SAGA CHEMICALS PVT. LTD. APPLIES MUTATIS MUTANDIS TO THE CASE OF SHREE RIDDHI CHEMICALS AND M.N. RAJKUMAR GARMENTS PVT. LTD. SINCE THE FACTS AND CIRCUMSTAN CES SURROUNDING THE ISSUE CONTESTED BEFORE US ARE IDENTICAL IN NATURE, CONSISTENT WITH THE VIEW TAKEN BY THE CO - ORDINATE BENCH, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH SIMILAR DIRECTIONS. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE E N PRONOUNCED IN THE COURT ON 16 . 10 .201 8 . SD/ - SD/ - (SANDEEP GOSAIN ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUN TANT MEMBER MUMBAI ; DATED : 16 / 10 / 20 1 8 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT HAMSONS LABORATORIES PVT. LTD. 4 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( SENIOR PRIVATE SECRETARY ) PS ITAT, MUMBAI