ACIT CIR 1, THANE V. MAMTA M VARSHNEY, THANE

ITA 2718/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8506 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 07-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Business income; Tax effect

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . , BEFORE SHRI D. MANMOHAN, VICE PRESIDENT / AND !'# , !$ %& SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO. 2718/MUM/2011 ' ' ' ' / ASSESSMENT YEAR 2006-07 DY. COMMISSIONER OF INCOME TAX, CIRCLE -1, THANE. VS. MS. MAMTA VARSHNEY PROP. M/S. 2 MUCH 902,TIRUPATI APARTMENTS, OPP. OSWAL PARK, POKHRAN ROAD 2, THANE. PAN:ADNPV 7736 L ( () / APPELLANT ) ( *+() / RESPONDENT ) () - ! / APPELLANT BY : SHRI MOHIT JAIN *+() . - ! / RESPONDENT BY : SHRI SUBODH RATNA PARKHI . /$ / DATE OF HEARING : 17-09-2012 0' . /$ / DATE OF PRONOUNCEMENT : 03-10-2012 %!1 / O R D E R PER RAJENDRA, A.M. THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER DT . 15-12-2010 PASSED BY THE CIT(A)-II, THANE. FOLLOWING GROUNDS OF APPEAL HAVE BEEN RAISED BY THE ASSESSING OFFICER (AO): ON THE FACTS OF THE CASE AN DIN LAW, THE LD. CIT(A ) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF BUSINESS INCOME OF RS. 13,68,039 /- WRONGLY TREATED AS CAPITAL GAIN. THE LD. CIT(A) DID NOT APPRECIATE THE FACT T HAT THE FREQUENCY AND VOLUME OF TRANSACTION CLEARLY SHOW THAT THE NATURE OF TRANSAC TION WAS AS TRADER NOT AS INVESTOR. FURTHER THE BALANCE SHEET OF THE ASSESSEE SHOWS THA T ASSESSEE WAS NOT HAVING SUFFICIENT FUNDS TO ENTER INTO SUCH HUGE TRANSACTIO N. ITA NO. 2718/MUM/2011 MS. MAMTA VARSHNEY 2 THE ASSESSING OFFICER CRAVES LEAVE TO ADD, AMEND AL TER OR DELETE ANY GROUND OF APPEAL. 2. ASSESSEE, AN INDIVIDUAL, HAD FILED HER RETURN OF I NCOME ON 31.10.2006 DECLARING TOTAL INCOME OF RS.17,83,965/-. ASSESSME NT ORDER WAS PASSED BY THE AO U/S.143(3) OF THE INCOME-TAX ACT,1961 (ACT) ON 31.1 0.2008 DETERMINING THE TOTAL INCOME AT RS.18.93,960/-. DURING THE ASSESSMENT PR OCEEDINGS AO HELD THAT THE ASSESSEE WAS A TRADER IN SHARES, WHERE AS THE CLAIM OF THE ASSESSEE WAS THAT SHE WAS AN INVESTOR. AGAINST THE ORDER OF THE AO ASSESSEE PRE FERRED AN APPEAL BEFORE THE FIRST APPEAL AUTHORITY (FAA). AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER HE HELD THAT AO SHOULD ASSESS THE INCOME OF THE ASSESSEE UNDER THE HEAD CAPITAL GAINS AND NOT UNDER THE HEAD INCOME F ROM BUSINESS. ORDER OF THE FAA HAS BEEN CHALLENGED BY THE AO BEFORE US. 3. WHEN THE CASE WAS CALLED FOR HEARING, AUTHORISED RE PRESENTATIVE (AR) SUBMITTED THAT TAX EFFECT IN THE CASE UNDER CONSIDE RATION WAS LESS THAN RS.3 LAKHS, THAT AS PER THE CIRCULAR ISSUED BY THE CBDT (INSTRUCTION NO.3 OF 2011, DT. 9 TH FEB., 2011) SECOND APPEALS SHOULD NOT HAVE BEEN FILED WHERE TAX EFFECT WAS LESS THAN RS.3 LAKHS. WE HAVE PERUSED THE MATERIAL AVAILABLE ON FILE. FR OM THE DETAILS IT IS CLEAR THAT IN THE CASE UNDER CONSIDERATION, TAX EFFECT WAS LESS THAN RS. 3 LAKHS. WE ARE AWARE THAT PARA NO.8 OF THE INSTRUCTION NO.3 OF THE CBDT CARVES OUT SOME EXCEPTIONS WHERE SECOND APPEALS HAVING TAX EFFECT LESS THAN RS. 3 LAKHS CAN BE FILED. BUT, IN THE CASE UNDER CONSIDERATION, WE DO NOT FIND ANY SUCH EXCEPTION CI TED BY THE AO OR THE FAA. APPEAL FILED BY THE AO STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD OCTOBER, 2012. SD/- SD/- ( . / D. MANMOHAN) ( !'# / RAJENDRA) / VICE PRESIDENT !$ %& / ACCOUNTANT MEMBER MUMBAI, 2% DATE: 3 RD OCTOBER, 2012 TNMM ITA NO. 2718/MUM/2011 MS. MAMTA VARSHNEY 3 %!1 %!1 %!1 %!1 . .. . */3 */3 */3 */3 4!3'/ 4!3'/ 4!3'/ 4!3'/ / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR B BENCH, ITAT, MUMBAI 6. GUARD FILE +3/ */ //TRUE COPY// %!1 %!1 %!1 %!1 / BY ORDER, / DY./ASSTT. REGISTRAR , / ITAT, MUMBAI