SANJAY MOHANLAL MOTA HUF, MUMBAI V. ITO 12(2)(3), MUMBAI

ITA 2988/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101052 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 29-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MAHAPATRA
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Opportunity of being heard; Speculation loss

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI N.K . BILLAIYA, ACCOUNTANT MEMBER AND RAM L AL NEGI, JUDICIAL MEMBER / I .T.A. NO. 2988/MUM/2013 ( / ASSESSMENT YEAR : 2007 - 08 SHRI SANJAY MOHANLAL MOTA HUF, 35/37, 1 ST FLOOR, RATAN HOUSE, BAZARGATE STREET, FORT, MUMBAI - 400 001 / VS. THE ITO 12(2)(3), AAYAKAR BHAVAN, MUMBAI ./ ./ PAN/GIR NO. : AAAHS 9139L ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI JITENDRA SINGH / RESPONDENT BY: SHRI S.K. MAHAPATRA / DATE OF HEARING : 0 3 .0 9 .2015 / DATE OF PRONOUNCEMENT : 0 3 .0 9 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 10 , MUMBAI D ATED 3 1.1.201 3 PERTAINING TO ASSESSMENT YEAR 200 7 - 0 8 . 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF REBATE CLAIM U/S. 88E OF THE ACT AT RS. 1,14,546/ - . ITA. NO. 2988/M/2013 2 3. THE ASSESSEE IS TRADING IN SHARES AND STOCKS AND ALSO DERIVED INCOME FROM OTHER SO URCES UNDER THE HEAD DIVIDEND, INTEREST AND RENT. WHILE SCRUTINIZING THE RETURN OF INCOME, THE ASSESSING OFFICER NOTICED THE CLAIM OF REBATE U/S. 88E OF THE ACT. THE AO FURTHER NOTICED THAT IN CASE OF SPECULATIVE TRANSACTION THOUGH THE LOSS IS ASSESSED I T IS CARRIED FORWARD AND DOES NOT FORM PART OF TOTAL INCOME. THEREFORE, THE ASSESSEE WAS ASKED TO EXPLAIN WHY PROPORTIONATE STT OF RS. 1,79,722/ - SHOULD NOT BE TREATED AS STT RELATING TO SPECULATIVE TRANSACTIONS AND THEREFORE WHY THIS AMOUNT SHOULD NOT BE REDUCED FROM THE TOTAL STT PAID. 3.1. THE ASSESSEE FILED A DETAILED REPLY VIDE LETTER DATED 13.11.2009 STATING THAT IF REBATE U/S. 88E IS ALLOWED WHEN THERE IS A SPECULATION INCOME TAXED, THERE IS NO REASON WHY IT SHOULD NOT BE ALLOWED WHEN THERE IS A SPECULATION LOSS. THE ASSESSEE FURTHER CLAIMED THAT THERE IS NO PROVISION FOR BIFURCATING STT PAID ON EACH TYPE OF TRANSACTION. THE AO CONSIDERED THE SUBMISSIONS OF THE ASSESSEE IN THE LIGHT OF THE PROVISIONS OF SEC. 88E AND CAME TO THE CONCLUSION THAT T HE CLAIM OF THE ASSESSEE DOES NOT SATISFY THE CONDITIONS LAID DOWN IN SEC. 88E OF THE ACT AND ACCORDINGLY DECLINED THE CLAIM OF REBATE U/S. 88E OF THE ACT. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. THE LD. COUNSEL ALSO RELIED ITA. NO. 2988/M/2013 3 UPON THE DECISION OF THE TRIBUNAL SMC BENCH IN ITA NO. 2989/M/2013. 6. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF TH E AUTHORITIES BELOW VIS - - VIS THE PROVISIONS OF SEC. 88E OF THE ACT. SECTION 88E READ AS UNDER: WHERE THE TOTAL INCOME OF AN ASSESSEE IN A PREVIOUS YEAR INCLUDES ANY INCOME, CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, ARISING FROM TAXABLE SECURITIES TRANSACTIONS, HE SHALL BE ENTITLED TO A DEDUCTION, FROM THE AMOUNT OF INCOME - TAX ON SUCH INCOME ARISING FROM SUCH TRANSACTIONS, COMPUTED IN THE MANNER PROVIDED IN SUB - SECTION (2), OF AN AMOUNT EQUAL TO THE SECURITIES TRANSAC TION TAX PAID BY HIM IN RESPECT OF THE TAXABLE SECURITIES TRANSACTIONS ENTERED INTO IN THE COURSE OF HIS BUSINESS DURING THAT PREVIOUS YEAR : 6. A PERUSAL OF THE AFOREMENTIONED SECTION CLEARLY SHOW THAT THE TOTAL INCOME OF THE ASSESSEE SHOULD INCLUDE INC OME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION WHICH ARISES FROM TAXABLE SECURITIES TRANSACTIONS. IF THIS CONDITION IS FULFILLED, THEN THE ASSESSEE IS ENTITLED TO A DEDUCTION FROM THE AMOUNT OF INCOME TAX ON SUCH INCOME OF AN AMOUNT EQUAL TO STT PAID BY HIM. SINCE THE SPECULATION LOSS IS SET OFF AGAINST THE SPECULATION GAIN AND THEREAFTER IF ANY POSITIVE INCOME REMAINS THAT POSITIVE INCOME IS TAKEN IN THE COMPUTATION OF THE TOTAL INCOME. IN OUR UNDERSTANDING OF THE LAW, EVEN THE STT PAID ON SPECULATION LOSS HAS TO BE CONSIDERED WHILE GIVING EFFECT TO IT. WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO EXAMINE WHETHER THERE IS ANY POSITIVE INCOME REMAINS AFTER GIVING SET OFF TO THE SPECULATION LOS S. THE AO IS DIRECTED TO ALLOW THE CLAIM IF POSITIVE INCOME IS FOUND UNDER THIS HEAD AFTER ITA. NO. 2988/M/2013 4 GIVING REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOS E. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 3 RD SEPTEMBER , 2015 SD/ - SD/ - ( RAM L AL NEGI ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 3 RD SEPTEMBER , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI