WEISSER TRADING COMPANY PVT. LTD., MUMBAI V. DCIT - 1(3)(2), MUMBAI

ITA 2782/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0316 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 15-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VIDYADHAR
• Keywords: Speculation loss; Revised return
• Section: 143(3); 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'G' BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 2782/MUM/2016 (ASSESSMENT YEAR: 2012-13) M/S. WEISSER TRADING CO. P. LTD. D-407, TURAKIA PARK, M.G. ROAD OPP. SWIMMING POOL KANDIVALI (W)MUMBAI 400067 VS. D C I T - 1(3)(2) 5TH FLOOR, AAYAKAR BHAVAN M.K. ROAD, MUMBAI 400020 PAN AAACW8358E APPELLANT RESPONDENT APPELLANT BY: SHRI DHARMESH SHAH RESPONDENT BY: SHRI V. VIDYADHAR DATE OF HEARING: 21.02.2018 DATE OF PRONOUNCEMENT: 22.02.2018 O R D E R PER C.N. PRASAD, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-3, MUMBAI DATED 21.12.2015 FOR A.Y. 2012-13. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: - 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE APPELLATE ORDER PASSED BY THE CIT(A) IS VOID AB INITIO AND BA D IN LAW AS THE SAME HAS BEEN PASSED EX-PARTE WITHOUT GRANTING A PR OPER OPPORTUNITY TO THE APPELLANT. 1.1) THE LEARNED CIT (A) OUGHT TO HAVE PASSED THE ORDER ON MERITS AND IN LAW. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN NOT ADM ITTING THE ADDITIONAL CLAIM OF THE APPELLANT CLAIMED BY WAY OF A BELATED REVISED RETURN FILED DURING THE ASSESSMENT PROCEEDI NGS WHICH IS CONTRARY TO THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF PRITHVI BROKERS & SHAREHOLDERS (23 TAXMANN. COM 23). 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO OF TREATIN G LOSS INCURRED ITA NO. 2782/MUM/2016 M/S. WEISSER TRADING CO. P. LTD. 2 ON TRADING IN FOREX DERIVATES ON A RECOGNIZED EXCHA NGE AS SPECULATIVE IN NATURE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT THE ISSUE IN THE APPEAL ON MERIT IS DECIDED IN FAVO UR OF THE ASSESSEE IN THE SUBSEQUENT ASSESSMENT YEAR, I.E. A.Y. 2013-14 BY TH E COORDINATE BENCH IN ITA NO. 4657/MUM/2017 VIDE ORDER DATED 18.01.2018. REFERRING TO THE SAID ORDER THE LEARNED COUNSEL SUBMITTED THAT THE T RIBUNAL HAS HELD THAT LOSS IN TRADING OF CURRENCY DERIVATIVES OF RECOGNIZ ED STOCK EXCHANGE IS NOT SPECULATIVE LOSS. THE LEARNED COUNSEL ALSO SUBMITTE D THAT WHILE COMING TO SUCH A CONCLUSION THE TRIBUNAL REFERRED TO THE DECI SION OF THE COORDINATE BENCH IN THE CASE OF IVF ADVISORS P. LTD. (39 ITR ( TRIB) 541 (MUM). THEREFORE, THE LEARNED COUNSEL SUBMITTED THAT IN VI EW OF THIS DECISION THE LOSS ON CURRENCY DERIVATIVES SHOULD BE TREATED AS S PECULATIVE LOSS AS DONE BY THE AO. 4. THE LEARNED D.R. SUBMITTED THAT IN THE ORIGINAL RE TURN OF INCOME THE ASSESSEE HAS CLAIMED LOSS ON CURRENCY DERIVATIVES A S SPECULATIVE LOSS. HOWEVER, A REVISED RETURN OF INCOME WAS FILED WHICH IS BEYOND THE TIME LIMIT AND IN THE REVISED RETURN THE ASSESSEE HAS CL AIMED SUCH LOSS AS BUSINESS LOSS AND NOT SPECULATIVE LOSS. THE LEARNED D.R. SUBMITTED THAT SINCE THE ASSESSEE HAS FILED THE RETURN BELATEDLY, THE LOSS CLAIMED BY THE ASSESSEE CANNOT BE ALLOWED TO BE SET OFF. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, REFERRING TO THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF RAMESH R. SHAH (143 TTJ (MUM) 166), SUBMITTED THAT EVEN IF THE ASSESSEE FIL ES REVISED RETURN BELATEDLY, SINCE THE ORIGINAL RETURN WAS FILED IN T IME UNDER SECTION 139(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) CLAIM OF THE ASSESSEE CANNOT BE DENIED. THE LEARNED COUNSEL SUBMITTED THA T IN THE CASE OF RAMESH R. SHAH (SUPRA) THERE WAS A POSITIVE INCOME WHEN THE RETURN WAS FILED UNDER SECTION 139(1) OF THE ACT AND A REVISED RETURN WAS FILED CLAIMING LOSS WITHIN THE TIME SPECIFIED UNDER SECTI ON 139(5) OF THE ACT AND THEREFORE IT WAS HELD THAT THERE WAS NO JUSTIFICATI ON TO DENY THE CARRY FORWARD OF LOSS. ITA NO. 2782/MUM/2016 M/S. WEISSER TRADING CO. P. LTD. 3 6. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORD ERS OF THE AUTHORITIES BELOW AND THE DECISIONS RELIED UPON. IN THIS CASE THE ASSESSEE HAS FILED ORIGINAL RETURN OF INCOME ON 27.09.2012 D ECLARING INCOME OF ` 61,70,784/-. IN THE ORIGINAL RETURN OF INCOME THE A SSESSEE HAS CLAIMED LOSS OF ` 6,27,41,471/- ON CURRENCY DERIVATION AS SPECULATIVE LOSS. HOWEVER, A REVISED RETURN WAS FILED ON 03.09.2014 DECLARING NIL INCOME AND CLAIMED BUSINESS LOSS AT ` 5,64,53,923/-. THE ASSESSMENT WAS COMPLETED ON 19.01.2015 UNDER SECTION 143(3) OF THE ACT DETERMIN ING THE SPECULATION LOSS AT ` 6,27,41,471/-. WHILE COMPUTING THE SPECULATION LOSS THE AO IGNORED THE REVISED RETURN FILED BY THE ASSESSEE WH ICH WAS FILED BEYOND THE TIME LIMIT ALLOWED FOR FILING REVISED RETURN AND TH EREFORE THE RETURN WAS TREATED AS INVALID RETURN. THE CLAIM OF THE ASSESSE E WAS NOT CONSIDERED. 7. ON APPEAL, THE CIT(A) PASSED EX-PARTE ORDER AS THE ASSESSEE DID NOT ATTEND BEFORE THE CIT(A) DESPITE SERVICE OF NOTICES . 8. IN THE GROUNDS OF APPEAL BEFORE US THE ASSESSEE SPE CIFICALLY RAISED GROUND STATING THAT THE ORDER PASSED BY THE CIT(A) IS BAD IN LAW AS IT HAS BEEN PASSED EX-PARTE WITHOUT GRANTING PROPER OPPORT UNITY TO THE ASSESSEE. IT IS THE CONTENTION OF THE LEARNED COUNSEL THAT TH E ISSUE IS COVERED IN ITS OWN CASE FOR SUBSEQUENT A.Y. ON MERITS AND THEREFOR E THE COUNSEL SUBMITTED THAT THE SAME MAY BE FOLLOWED. THE LEARNE D COUNSEL BEFORE US DID NOT WITHDRAW GROUND NO. 1 WHICH IS ON EX-PARTE ORDER PASSED BY THE LEARNED CIT(A). TAKING THE TOTALITY OF FACTS AND CI RCUMSTANCES INTO CONSIDERATION WE ARE OF THE CONSIDERED VIEW THAT TH IS MATTER HAS TO GO BACK TO THE FILE OF THE LEARNED CIT(A) FOR FRESH ADJUDIC ATION AND THE ASSESSEE HAS TO COOPERATE WITH THE PROCEEDINGS BEFORE THE CIT(A) FOR THE REASON THAT ON EARLIER OCCASION THE ASSESSEE DID NOT APPEAR BEFORE HIM. THE ASSESSEE IS AT LIBERTY TO RAISE ALL CONTENTIONS BEFORE THE CIT(A). THUS, WE RESTORE THIS APPEAL TO THE FILE OF THE CIT(A) WHO SHALL ADJUDICA TE THE ISSUE IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF HE ARING TO THE ASSESSEE AND THE ASSESSEE IS DIRECTED TO COOPERATE WITH THE PROCEEDINGS BEFORE THE LEARNED CIT(A) WITHOUT SEEKING UNNECESSARY ADJOURNM ENTS. ITA NO. 2782/MUM/2016 M/S. WEISSER TRADING CO. P. LTD. 4 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND FEBRUARY, 2018. SD/ - SD/ - (A.L. SAINI) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22 ND FEBRUARY, 2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -3, MUMBAI 4. THE PR. CIT - 1, MUMBAI 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.