Acee Enterprises, New Delhi V. DCIT, New Delhi

ITA 2567/DEL/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7351 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 11-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 28-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K JAIN SENIOR
• Keywords: Business income; Opportunity of being heard; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO S SS S . .. . 1820/DEL/2010 & 2567/DEL/2012 1820/DEL/2010 & 2567/DEL/2012 1820/DEL/2010 & 2567/DEL/2012 1820/DEL/2010 & 2567/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR S SS S : : : : 2007 2007 2007 2007 - -- - 08 & 2008 08 & 2008 08 & 2008 08 & 2008 - -- - 09 0909 09 M/S ACEE ENTERPRISES, M/S ACEE ENTERPRISES, M/S ACEE ENTERPRISES, M/S ACEE ENTERPRISES, 4 44 4 TH THTH TH FLOOR, PUNJABI BHAWAN, FLOOR, PUNJABI BHAWAN, FLOOR, PUNJABI BHAWAN, FLOOR, PUNJABI BHAWAN, 10, ROUSE AVENUE, 10, ROUSE AVENUE, 10, ROUSE AVENUE, 10, ROUSE AVENUE, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : AAACA0857G. PAN : AAACA0857G. PAN : AAACA0857G. PAN : AAACA0857G. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -1(1), 1(1), 1(1), 1(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.P. RASTOGI, ADVOCATE. RESPONDENT BY : SHRI S.K. JAIN, SE NIOR DR. DATE OF HEARING : 11.08.2016 11.08.2016 11.08.2016 11.08.2016 DATE OF PRONOUNCEMENT : 19.08.2016 19.08.2016 19.08.2016 19.08.2016 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: :- -- - THESE APPEALS BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-0 8 & 2008-09 ARE DIRECTED AGAINST SEPARATE ORDERS OF LEAR NED CIT(A)-IV, NEW DELHI DATED 11 TH FEBRUARY, 2010 AND 26 TH MARCH, 2012. 2. THE ONLY COMMON ISSUE RAISED IN THESE TWO APPEALS BE FORE THE TRIBUNAL IS WHETHER THE PROFIT FROM SALE OF SHARES IS ASS ESSABLE AS BUSINESS INCOME OR CAPITAL GAINS. THE ASSESSEE HAD CLAIMED THE SAME TO BE CAPITAL GAINS WHILE THE ASSESSING OFFICER HAS TREAT ED THE SAME AS INCOME FROM BUSINESS. LEARNED CIT(A) HAS SUSTAINED THE ORDER OF THE ASSESSING OFFICER. HENCE, THESE TWO APPEALS BY THE ASSESSEE. 3. THE FACTS OF THE CASE ARE THAT THE ITAT HAD DISPOSED OF THE ASSESSEES APPEALS FOR FOUR YEARS I.E., FOR ASSESSMENT YEAR 2 005-06, ITA-1820/DEL/2010 & 2567/DEL/2012 2 2006-07, 2007-08 & 2008-09 BY COMMON ORDER DATED 26 TH APRIL, 2013. IN THE SAID ORDER, THE ITAT UPHELD THE FINDING OF TH E ASSESSING OFFICER AND HAD DISMISSED THE APPEAL OF THE ASSESSEE. THE ASSESSEE HAD FILED THE APPEALS TO HON'BLE JURISDICTIONAL HIGH COURT. HO N'BLE JURISDICTIONAL HIGH COURT, VIDE ORDER DATED 28 TH JULY, 2014, DISMISSED THE ASSESSEES APPEALS FOR ASSESSMENT YEAR 2005-06 & 2006-07. HOWEVER , SO FAR AS THE APPEALS FOR ASSESSMENT YEAR 2007-08 & 2008-09 ARE C ONCERNED, HON'BLE JURISDICTIONAL HIGH COURT, VIDE ORDER DATED 24 TH SEPTEMBER, 2014, REMANDED THE MATTER TO THE TRIBUNAL WITH THE FOLLOWING FINDING:- 5. BY ORDER DATED 28 TH JULY, 2014, AFTER REFERRING TO THE FACTUAL MATRIX OF THE ASSESSMENT YEARS 2005-06 AND 2006 - 07, WE HAD DISMISSED ITA NOS.301/2014 AND 302/2014, B UT NOTICE WAS ISSUED IN THE PRESENT ITAS, WHICH RELATE TO ASSESSMENT YEARS 2007-08 AND 2008-09. IN THESE YEARS, WE NOTICE THAT THE ASSESSING OFFICER DID NOT DEAL WITH THE FACTS, BUT SIMPLY FOLLOWED HIS PREDECESSORS ORDER FOR TH E ASSESSMENT YEARS 2005-06 AND 2006-07 TO HOLD THAT THE TRANSACTIONS RELATING TO SHARES TREATED BY THE APPELLAN T- ASSESSEE AS SHORT TERM CAPITAL GAINS SHOULD BE TAXED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. 6. THE COMMISSIONER OF INCOME TAX (APPEALS) ALSO DID NOT GO IN DEPTH AND DETAIL AND PREFERRED TO RELY UP ON THE EARLIER ORDERS. IN THE FIRST APPELLATE ORDER RELATIN G TO ASSESSMENT YEAR 2007-08, REFERENCE WAS MADE TO TRANSACTIONS IN SHARE OF 8 COMPANIES, WHICH WERE HELD F OR A PERIOD RANGING FROM 6 DAYS TO 97 DAYS, BUT LEARNED CO UNSEL FOR THE APPELLANT-ASSESSEE STATES THAT THERE WERE OTHER SHARES TOO, WHICH WERE HELD FOR LONGER PERIOD. FOR T HE ASSESSMENT YEAR 2008-09, THERE IS NO DISCUSSION AND ELUCIDATION. 7. IT IS CLEARLY NOTICEABLE THAT THE IMPUGNED ORDER PASSED BY THE TRIBUNAL DOES NOT REFER TO THE FACTUAL M ATRIX RELATING TO THE ASSESSMENT YEARS 2007-08 AND 2008-09, EXCEPT FOR RECORDING AS UNDER :- IN OTHER ASSESSMENT YEARS ALSO, THE FREQUENCY OF TRANSACTIONS WERE QUITE LARGE. LEARNED CIT(APPEALS) H AS REPRODUCED THE DETAILS OF TRANSACTIONS AND OBSERVED TH AT ITA-1820/DEL/2010 & 2567/DEL/2012 3 SOME OF THE SHARES WERE KEPT ONLY FOR ONE, TWO OR THRE E DAYS. AS FAR AS OTHER YEARS ARE CONCERNED, WE DO NOT FIND ANY MERIT IN THE APPEALS OF ASSESSEE ON THIS ISSUE. THE ASSESSEE HAS TO BE TREATED AS A TRADER IN SHARES IN ALL THE ASSESSMENT YEARS. 8. WE NOTICE THAT THE APPELLANT-ASSESSEE HAD DECLARED LONG-TERM CAPITAL GAINS AND, THEREFORE, THE STAND OF THE APPELLANT-ASSESSEE IS THAT HE WAS AN INVESTOR AS WELL AS TRADER IN SHARES. 9. IN VIEW OF THE AFORESAID FACTUAL POSITION, WE HAVE TO HOLD THAT THE TRIBUNAL HAS NOT DEALT WITH THE CONTEN TIONS RAISED AFTER EXAMINING AND ASCERTAINING THE FACTS IN D ETAIL. ANSWER OR CONCLUSION HAS BEEN RECORDED WITHOUT REFEREN CE TO FACTS OF THE PARTICULAR YEAR. THE FACTUAL POSITIO N CAN VARY AND CAN BE MATERIALLY DIFFERENT. THE QUESTION OF LAW, THEREFORE, HAS TO BE ANSWERED IN FAVOUR OF THE APPELL ANT- ASSESSEE, BUT WITH AN ORDER OF REMAND. WE CLARIFY THAT WE HAVE NOT EXAMINED THE CONTENTIONS OF THE APPELLANT- ASSESSEE OR THE RESPONDENT-REVENUE ON MERITS. THE APPEALS ARE DISPOSED OF. 10. TO CUT SHORT DELAY, PARTIES ARE DIRECTED TO APPEA R BEFORE THE TRIBUNAL ON 3 RD NOVEMBER, 2014, WHEN A DATE OF HEARING WILL BE FIXED. 4. AT THE TIME OF HEARING BEFORE US, BOTH THE PARTIE S FAIRLY AGREED THAT THE ASSESSING OFFICER HAS NOT RECORDED THE FACTS OF THESE TWO YEARS IN THE ASSESSMENT ORDER. HE HAS SIMPLY FOLLOWED T HE ORDER OF HIS PREDECESSOR IN THE EARLIER YEAR. SINCE HONBLE HIGH COURT HAS HELD THAT THE FACTS OF EACH YEAR ARE TO BE CONSIDERED BEFORE AR RIVING AT THE CONCLUSION WHETHER THE PROFIT FROM SALE OF SHARES IS BUSI NESS INCOME OR NOT, IT WOULD BE ESSENTIAL TO HAVE THE RELEVANT FACT S AND DETAILS WITH REGARD TO SALE AND PURCHASE OF SHARES BY THE ASSESSEE DURIN G EACH OF THE ASSESSMENT YEARS UNDER APPEAL. SINCE SUCH DETAILS ARE NOT AVAILABLE ON RECORD, BOTH THE PARTIES FAIRLY ADMITTE D THAT THE MATTER MAY BE REMANDED TO THE FILE OF THE ASSESSING OFFICER. IN VIEW OF THE ABOVE ADMISSION OF BOTH THE PARTIES, WE DEEM IT PROPER TO SET ASIDE ITA-1820/DEL/2010 & 2567/DEL/2012 4 THE ORDERS OF AUTHORITIES BELOW ON THIS POINT AND REST ORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER. WE DIRECT HIM TO D ISCUSS THE FACTS OF EACH YEAR IN DETAIL IN THE ASSESSMENT ORDER AND THEREAF TER READJUDICATE THE ISSUE IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT HE WILL ALLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE WHILE GIVING EFFECT TO THIS ORDER. 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DE EMED TO BE ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 19.08.2016. SD/- SD/- (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S ACEE ENTERPRISES, M/S ACEE ENTERPRISES, M/S ACEE ENTERPRISES, M/S ACEE ENTERPRISES, 4 44 4 TH THTH TH FLOOR, PUNJABI BHAWAN, FLOOR, PUNJABI BHAWAN, FLOOR, PUNJABI BHAWAN, FLOOR, PUNJABI BHAWAN, 10, ROUSE AVENUE, NEW DELHI. 10, ROUSE AVENUE, NEW DELHI. 10, ROUSE AVENUE, NEW DELHI. 10, ROUSE AVENUE, NEW DELHI. 2. RESPONDENT : DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -1(1), NEW DELH 1(1), NEW DELH 1(1), NEW DELH 1(1), NEW DELHI. I.I. I. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR