MAHAN INDUSTRIES LTD., GUJARAT V. DCIT -CC -2(2), MUMBAI

ITA 3320/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3841 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAYKUMAR G SUBRAMANYAN SR AR
• Assessee Lawyers: POOJAN MEHTALD
• Keywords: Speculation loss; Competent authority
• Section: 153A; 73; 153; 153C

Judgement Text

ITA NO.3320 & 3321/MUM/2018 MAHAN INDUSTRIES LTD. ASSESSMENT YEAR :2008-09 & 2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI SHAMIM YAHYA, AM AND HONBLE SHRI AMARJIT SINGH, JM ./ I.T.A. NO.3320 & 3321/MUM/2018 ( / ASSESSMENT YEAR: 2008-09 AND 2009-10) MAHAN INDUSTRIES LTD. 3 RD FLOOR, D.K. HOUSE MITHALKHALI UNDER BRIDGE AHMEDABAD GUJARAT-380 006. / VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2(2) PRATISHTHA BHAVAN, MK MARG MUMBAI-400 020. ./ ./PAN/GIR NO. AABCM 0370 P ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI POOJAN MEHTA-LD. AR REVENUE BY : SHRI VIJAYKUMAR G. SUBRAMANYAN SR. AR- CIT / DATE OF HEARING : 03/11/2020 / DATE OF PRONOUNCEMENT : 05/11/2020 / O R D E R PER SHAMIM YAHYA (ACCOUNTANT MEMBER) 1. THESE ARE APPEALS BY THE ASSESSEE DIRECTED AGAIN ST COMMON ORDER OF LEARNED CIT APPEAL DATED 12/03/2018 AND PERTAINS TO ASSESSMENT YEARS 2008-09 AND 2009-10. THE GROUNDS READ AS UNDE R :- ITA NO.3320 & 3321/MUM/2018 MAHAN INDUSTRIES LTD. ASSESSMENT YEAR :2008-09 & 2009-10 2 ITA NO.3320/MUM/2018 (A.Y.2008-09) :- THE FOLLOWING GROUNDS OF APPEAL ARE INDEPENDENT OF , AND WITHOUT PREJUDICE TO, ONE. ANOTHER: 1. THE COMMISSIONER OF INCOME-TAX (APPEALS) - 48, M UMBAI (HEREINAFTER REFERRED TO AS THE CIT(A)) ERRED IN NOT DISPOSING O F THE GROUNDS OF APPEAL RAISED BY THE APPELLANTS BEFORE HER. THE APPELLANTS CONTEND THAT THE CIT(A) OUGHT TO HAV E SPECIFICALLY DISPOSED OF THE GROUNDS OF APPEAL RAISED BY THEM. 2. THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE - 2(2), MUMBAI (HEREINAF TER REFERRED TO AS THE ASSESSING OFFICER) IN ISSUING NOTICE UNDER SECTION 153C OF THE ACT. THE APPELLANTS CONTEND THAT THE NOTICE ISSUED UNDER SECTION 153C IS VOID AB INITIO INASMUCH AS THE JURISDICTIONAL CONDITIONS FO R THE ISSUE OF THE SAID NOTICE HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY, THE A SSESSMENT FRAMED IS BAD IN LAW AND NEEDS TO BE QUASHED. THE APPELLANTS FURTHER, CONTEND THAT NO INCRIMINATI NG DOCUMENT RELATABLE TO THE APPELLANTS IS FOUND DURING THE COURSE OF SEARCH ON A PERSON REFERRED TO IN SECTION 153A AND THAT SATISFACTION REQUIRED BY THE PROVISIONS OF SECTION 153C IS NOT RECORDED BY THE ASSESSING OFFICER OF SUCH PE RSON REFERRED TO IN SECTION 1 53 A AND HENCE, THE IMPUGNED NOTICE ISSUED UNDER SECTION 153C IS AB INITIO VOID; CONSEQUENTLY, THE ASSESSMENT FRAMED IS BAD IN LAW AND NEEDS TO BE QUASHED. 3. THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN TREATING BUSINESS LOSS RS 79,93,300 COMPRISING OF SHARE TRADING LOSS RS 50,46,005 AND OTHER ADMINISTRATIVE EXPENSES RS 29, 47,295 AS SPECULATION LOSS BY INVOKING THE PROVISIONS OF EXPLANATION TO S ECTION 73 OF THE ACT. THE APPELLANTS CONTEND THAT THE IMPUGNED ADDITION I S NOT ARISING OUT OF ANY INCRIMINATING DOCUMENT RELATABLE TO THE APPELLANTS THAT IS FOUND DURING THE COURSE OF SEARCH ON A PERSON REFERRED TO IN SECTION 153A AND THAT SATISFACTION REQUIRED BY THE PROVISIONS OF SECTION 153C IS NOT R ECORDED BY THE ASSESSING OFFICER OF SUCH PERSON REFERRED TO IN SECTION 153 A AND HENCE, THE IMPUGNED ADDITION IS VITIATED IN LAW. WITHOUT PREJUDICE, THE APPELLANTS CONTEND THAT ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HA S FALLEN IN ERROR IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN TR EATING THE BUSINESS LOSS AS SPECULATION LOSS BY INVOKING THE PROVISIONS OF EXPL ANATION TO SECTION 73 OF THE ACT INASMUCH AS THE PROVISIONS OF THE EXPLANATION A RE NOT APPLICABLE TO THE FACTS OF THE APPELLANTS. ITA NO.3321/MUM/2018 (A.Y.2009-10) :- ITA NO.3320 & 3321/MUM/2018 MAHAN INDUSTRIES LTD. ASSESSMENT YEAR :2008-09 & 2009-10 3 THE FOLLOWING GROUNDS OF APPEAL ARE INDEPENDENT OF , AND WITHOUT PREJUDICE TO, ONE. ANOTHER: 1. THE COMMISSIONER OF INCOME-TAX (APPEALS) - 48, M UMBAI (HEREINAFTER REFERRED TO AS THE CIT(A)) ERRED IN NOT DISPOSING O F THE GROUNDS OF APPEAL RAISED BY THE APPELLANTS BEFORE HER. THE APPELLANTS CONTEND THAT THE CIT(A) OUGHT TO HAV E SPECIFICALLY DISPOSED OF THE GROUNDS OF APPEAL RAISED BY THEM. 2. THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE - 2(2), MUMBAI (HEREINAF TER REFERRED TO AS THE ASSESSING OFFICER) IN ISSUING NOTICE UNDER SECTION 153C OF THE ACT. THE APPELLANTS CONTEND THAT THE NOTICE ISSUED UNDER SECTION 153C IS VOID AB INITIO INASMUCH AS THE JURISDICTIONAL CONDITIONS FO R THE ISSUE OF THE SAID NOTICE HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY, THE A SSESSMENT FRAMED IS BAD IN LAW AND NEEDS TO BE QUASHED. THE APPELLANTS FURTHER, CONTEND THAT NO INCRIMINATI NG DOCUMENT RELATABLE TO THE APPELLANTS IS FOUND DURING THE COURSE OF SEARCH ON A PERSON REFERRED TO IN SECTION 153A AND THAT SATISFACTION REQUIRED BY THE PROVISIONS OF SECTION 153C IS NOT RECORDED BY THE ASSESSING OFFICER OF SUCH PE RSON REFERRED TO IN SECTION 1 53 A AND HENCE, THE IMPUGNED NOTICE ISSUED UNDER SECTION 153C IS AB INITIO VOID; CONSEQUENTLY, THE ASSESSMENT FRAMED IS BAD IN LAW AND NEEDS TO BE QUASHED. 3. THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN TREATING BUSINESS LOSS RS 83,41,160 COMPRISING OF S HARE TRADING LOSS RS 66,86,486 AND OTHER ADMINISTRATIVE EXPENSES RS 16,5 4,674 AS SPECULATION LOSS BY INVOKING THE PROVISIONS OF EXPLANATION TO S ECTION 73 OF THE ACT. THE APPELLANTS CONTEND THAT THE IMPUGNED ADDITION I S NOT ARISING OUT OF ANY INCRIMINATING DOCUMENT RELATABLE TO THE APPELLANTS THAT IS FOUND DURING THE COURSE OF SEARCH ON A PERSON REFERRED TO IN SECTION 153A AND THAT SATISFACTION REQUIRED BY THE PROVISIONS OF SECTION 153C IS NOT R ECORDED BY THE ASSESSING OFFICER OF SUCH PERSON REFERRED TO IN SECTION 153 A AND HENCE, THE IMPUGNED ADDITION IS VITIATED IN LAW. THE APPELLANTS FURTHER, CONTEND THAT ON THE FACTS A ND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS FALLEN IN ERROR IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE BUSINESS LOSS AS SPECULATION LOSS BY INVOKING THE PROVISIONS OF EXPLANATION TO SECTION 7 3 OF THE ACT INASMUCH AS THE PROVISIONS OF THE EXPLANATION ARE NOT APPLICABL E TO THE FACTS OF THE APPELLANTS. 2. GROUNDS ARE COMMON EXCEPT FOR CHANGE IN FIGURES AS APPLICABLE. ITA NO.3320 & 3321/MUM/2018 MAHAN INDUSTRIES LTD. ASSESSMENT YEAR :2008-09 & 2009-10 4 3. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE S TATED THAT HE IS REQUESTING THAT, ASSESSEE MAY BE PERMITTED TO WITHD RAW THE APPEAL. HE SUBMITTED THAT ASSESSEE HAS OPTED FOR RESOLUTION OF DISPUTED TAX UNDER DIRECT TAX VIVAD SE VISHWAS ACT 2020 (ACT 3 OF 2020).HE SUBMITTED THAT ASSESSEE HAS ACCORDINGLY FILED THE NECESSARY DECLAR ATION AND COMPETENT AUTHORITY HAS ISSUED FORM NO.3 IN THIS REGARD ALSO. IN THE VIEW OF THE MATTER HE SOUGHT TO WITHDRAW THE APPEAL. THE LD. D R DID NOT HAVE ANY OBJECTION. 4. ACCORDINGLY IN THE LIGHT OF THE ABOVE DECISION, WE PERMIT THE WITHDRAWAL OF ABOVE APPEAL ACCORDINGLY. HENCE THESE APPEALS ARE DISPOSED OFF BY TREATING THEM AS WITHDRAWN. ORDER PRONOUNCED UNDER RULE 34(4) OF ITAT RULES ON 05/11/2020 SD/- SD/- (AMARJIT SINGH) ( SHAMIM YAHYA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 05/11/2020 SR.PS, JAISY VARGHESE ITA NO.3320 & 3321/MUM/2018 MAHAN INDUSTRIES LTD. ASSESSMENT YEAR :2008-09 & 2009-10 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ) ( ) / THE CIT(A) 4. ) / CIT CONCERNED 5. '*+!, , , , / DR, ITAT, MUMBAI 6. +-./ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.