Kisan Discretionary Family Trust, Ahmedabad V. The ACIT.,Circle-10, Ahmedabad

ITA 2752/AHD/2011

• Counselvise Citation: 275220514 RSA 2011
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-03-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 08-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI A. MOHAN ALAN KAMONY, AM) ITA NO.2752/AHD/2011: A. Y.: 2002-03 KISHAN DISCRETIONARY FAMILY TRUST, NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD 380 009 PA NO. AAATK 2653 D VS THE A. C. I. T., CIRCLE-10, AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. SOPARKAR, AR RESPONDENT BY SHRI JAMES KURIAN, SR. DR DATE OF HEARING: 22-03-2012 DATE OF PRONOUNCEMENT: 30-03-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED CIT( A)-XVI, AHMEDABAD DATED 26-08-2011, FOR ASSESSMENT YEAR 2002-03 IN AP PEAL NO. CAT(A)/XVI/ACIT/CIR-10/449/2010-11. 2. THE ASSESSEE HAS RAISED 7 ELABORATE GROUNDS IN I T GROUNDS OF APPEAL. HOWEVER, THE LEARNED AR CONCEDED THAT THE L ONE SURVIVING GROUND IS GROUND NO.2 WHICH IS HEREBY REPRODUCED BE LOW FOR REFERENCE: 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E APPELLANTS CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS GROSSLY ERRED IN DISMISSING THE GROUND REGARDING NO T ADJUDICATING THE ISSUE BY LD. A. O. WHETHER THE GAIN ARISING OUT OF INTEREST COUPONS ARE TO BE TREATED AS LONG TERM CAPITAL GAIN OR SHORT TERM CAPITAL GAIN AS PER THE DIRECTION OF HONBLE TRIBUN AL. ITA NO.2752/AHD/2011 (AY 2002-03): KISHAN DISCRETIO NARY FAMILY TRUST VS ACIT, CIR-10, AHMEDABAD 2 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS A RESIDENT TRUST FILED HIS RETURN OF INCOME ON 09-08-2002. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 24-03-2005 DETER MINING TOTAL INCOME AT RS.49,89,89,431/-. A PORTION OF THE ADDITION MAD E THEREIN WAS ON ACCOUNT OF TREATMENT OF LONG TERM CAPITAL GAIN CLAI MED AT RS.4,51,34,165/- ON SALE OF INTEREST COUPON STRIPS OF TATA FINANCE LTD. TO BE INCOME FROM SHORT TERM CAPITAL GAIN AND ADDITION OF INTEREST ACCRUED UNDER SHORT TERM CAPITAL GAIN ON INTEREST COUPON ST RIPS. 4. INITIALLY WHEN THE MATTER REACHED BEFORE TRIBUNA L THE TRIBUNAL VIDE ITS ORDER DATED 22-01-2010 IN ITA NO.1261/AHD/2006 HAD RESTORED THE ISSUE OF TREATING THE SALE OF INTEREST COUPON STRIP S OF TATA FINANCE LTD. OF RS.99,14,236/- AS SHORT TERM CAPITAL GAIN INSTEAD O F LONG TERM CAPITAL GAIN CLAIMED BY THE ASSESSEE BACK TO THE FILE OF T HE LEARNED AO FOR FRESH ADJUDICATION WITH DIRECTION TO DECIDE THE ISSUE IN THE LIGHT OF THE DISCUSSIONS MADE BY THE ITAT IN ITS ORDER. HOWEVER, THE LEARNED AO DISMISSED THE APPEAL WITH OBSERVATION THAT THE ASSE SSEE HAS NOT FURNISHED ANY FRESH DETAILS IN THE PROCEEDINGS AND THE ISSUE UNDER CONSIDERATION BEING SUB-JUDICE BEFORE THE HONBLE H IGH COURT. IN VIEW OF THE SAME, THE TOTAL INCOME OF THE ASSESSEE WAS DETE RMINED AS PER ORDER DATED 20-12-2010 AT RS.1,19,96,950/-. WHEN THE ISSU E CROPPED UP BEFORE THE LEARNED CIT(A) IN SECOND ROUND, THE LEAR NED CIT(A) ALSO DISMISSED THE APPEAL BY HOLDING AS UNDER: 4.0 THE SECOND AND THIRD GROUNDS OF APPEAL ARE REG ARDING NOT ADJUDICATING THE ISSUE OF CAPITAL GAIN ARISING OUT OF SALE OF INTEREST COUPON STRIPS OF TATA FINANCE LTD. AND REGARDING AS SESSING THE INCOME OF RS.1,19,96,950/-. THE ASSESSEE HAD WRONGL Y TAKEN THESE GROUNDS OF APPEAL. THE ASSESSEE WAS REQUIRED TO FURNISH THE DETAILS OR DOCUMENTARY EVIDENCES INCLUDING THE EVID ENCE OF HOLDING PERIOD FOR COMPUTING THE CAPITAL GAINS. THE ASSESSEE, EVEN AFTER AFFORDING OPPORTUNITY OF BEING HEARD, HAD NOT FURNISHED ANY DETAILS. THE ASSESSEE HAD ALSO FAILED TO PRESENT IT S CASE BEFORE THE ITA NO.2752/AHD/2011 (AY 2002-03): KISHAN DISCRETIO NARY FAMILY TRUST VS ACIT, CIR-10, AHMEDABAD 3 FIRST APPELLATE AUTHORITY EVEN AFTER AFFORDING TWO OPPORTUNITIES OF BEING HEARD. I HAVE THUS NO MATERIAL TO INTERFERE W ITH THE STAND TAKEN BY THE ASSESSING OFFICER AND ASSESSING THE IN COME AT RS.1,19,96,950/-. I HAVE NO OPTION EXCEPT TO SUSTAI N THE FINDING OF THE ASSESSING OFFICER AND THE SAME IS SUSTAINED. TH E SECOND AND THIRD GROUNDS OF APPEAL ARE ACCORDINGLY DISMISSED. 5. BEFORE US, THE LEARNED AR SUBMITTED THAT THE ISS UE WITH RESPECT TO THE INTEREST COUPON STRIPS IS SQUARELY COVERED BY T HE DECISION RENDERED BY ITAT IN ITA NO.1042/AHD/2006 DATED 09-10-2009 IN THE CASE OF KARSANBHAI KHODIDAS PATEL, HUF VS ACIT. HE FURTHER REFERRED TO THE ASSESSMENT ORDER DATED 24-03-2005 IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2002-03 PASSED U/S 143(3) OF THE AC T IN ORDER TO ESTABLISH THAT THE DATE OF ALLOTMENT OF THE NON CON VERTIBLE DEBENTURES OF TATA FINANCE LTD. WAS ON 23-03-2000. IT WAS, THEREF ORE, PRAYED THAT THE ORDERS OF THE AUTHORITIES BELOW MAY BE DISMISSED AN D THE ASSESSEES CLAIM MAY BE UPHELD. THE LEARNED DR STOUTLY OPPOSED TO THE SUBMISSIONS OF THE LEARNED AR AND SUBMITTED THAT NO DETAILS WERE PRODUCED BEFORE THE AUTHORITIES BELOW, THEREFORE, O RDERS OF THE AUTHORITIES BELOW MAYBE SUSTAINED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD AND THE DECISION OF THE TRIBUNAL RENDERED IN ITA NO.1042/AHD/2006 FOR ASSESSMENT YEAR 2002-03 DATED 09-10-2009 ALONG WITH THE DECISION RENDERED IN THE ASSESSEES OWN CASE IN ITA NO.1261/AHD/2006 FOR ASSESSMENT YEAR 2002-03 DATED 22-01-2010. SINCE THE ALLEGATIONS OF THE LEARNED AO AND THE LEA RNED CIT(A) ARE THAT THE ASSESSEE HAS NOT PRODUCED SUFFICIENT MATERIALS BEFORE THEM TO ESTABLISH THE CLAIM OF THE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT ONE MORE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE S O THAT THE ASSESSEE MAY BE ENABLED TO PRODUCE ALL RELEVANT DOC UMENTS AND ITA NO.2752/AHD/2011 (AY 2002-03): KISHAN DISCRETIO NARY FAMILY TRUST VS ACIT, CIR-10, AHMEDABAD 4 MATERIALS REQUIRED FOR CONSIDERING ITS CLAIM. ACCOR DINGLY, WE HEREBY REMIT THE ISSUE BACK TO THE FILE OF THE AO WITH DIRECTION FOR DE NOVO CONSIDERATION. THE LEARNED AO IS ALSO DIRECTED TO PERUSE THE ORDERS OF THE TRIBUNAL CITED SUPRA AND EXAMINE THE APPLICABIL ITY OF THE TRIBUNALS ORDERS RENDERED ON THE FACT OF INVESTMENT IN DEEP D ISCOUNT BONDS ISSUED BY M/S. NIRMA LTD. AND ITS RELEVANCE IN THE ASSESSEES CASE FOR PURCHASE OF INTEREST COUPON STRIPS OF TATA FINANCE LTD TAKING INTO ACCOUNT OF THE TERMS AND CONDITIONS OF THE ALLOTMEN T LETTER AND NATURE OF BOTH THE SCRIPTS. NEEDLESS TO MENTION THAT, IN CASE THE LD.AO HAS THE BENEFIT OF THE HON. HIGH COURTS ORDER, THE SAME SH ALL PREVAIL, AND THE LEARNED AO SHALL PASS APPROPRIATE ORDER ACCORDI NGLY. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF MARCH, 2012 SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD