Kuldip Singh Ghai, Ludhiana V. CIT-III, Ludhiana

ITA 393/CHANDI/2011

• Counselvise Citation: 39321514 RSA 2011
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 18-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: S R CHHAWRA
• Keywords: Business income; Revised return
• Section: 143(3); 142(1); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO.393/CHD/2011 ASSESSMENT YEAR: 2006-07 SHRI KULDIP SINGH GHAI, V CIT-III, 45, AGGAR NAGAR EXTN., AAYKAR BHAWAN, LUDHIANA. RISHI NAGAR, LUDHIANA. PAN: ABIPG-5842P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.R.CHHAWRA RESPONDENT BY : SHRI S.K.MITTAL DATE OF HEARING : 23.01.2012 DATE OF PRONOUNCEMENT : 8.2.2012 ORDER PER MEHAR SINGH, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT-III PASSED U/S 263 OF THE INCOME-TAX ACT,1961 (IN SHORT 'THE ACT') DATED 04.03.2011 RELATING TO ASSESSMENT YEAR 2006-07. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT-III LUDHIANA HAS ERRED IN LAW AND ON THE FACTS OF THE CASE BY INVOKING HIS JURISDICTION U/S 263 AND THEREBY DIRECTING THE LD. AO TO TAX PROFIT ON SALE OF SHARES AS BUSINESS PROFIT INSTEAD OF AS SHORT TERM CAPITAL GAIN SHOWN BY THE ASSESSEE AND ACCORDINGLY ASSESSED BY THE LD. AO VIDE ORDER U/S 143(3) DATED 01.05.2008. 2. THAT THE ASSESSEE CRAVES LEAVE TO AMEND/ADD ANY GROUND OF APPEAL BEFORE THE SAME IS HEARD. 2 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, THE ASSESSEE REFERRED TO SHOW CAUSE NOTICE ISSUED BY THE ACIT DATED 09.01.2008 WHEREBY QUERY NO. 11 & 12 WER E RAISED IN RESPECT OF PURCHASE AND SALE OF SHARES. LD. 'AR' WAS OF THE VIEW THAT SPECIFIC QUERY WAS RAISED BY THE AO AND, HENCE, THE AO HAD TAKEN A LEGALLY PERMISSIBLE VIEW IN THE MATTER. HE ALSO REFERRED T O THE STATEMENT OF COMPUTATION OF INCOME WHEREBY SHORT TE RM CAPITAL GAIN ON PURCHASE AND SALE OF SHARES HAS BEE N DISCLOSED BY THE ASSESSEE FOR THE ASSESSMENT YEAR U NDER REFERENCE. LD. 'AR' PLACED RELIANCE ON THE DECISIO N IN THE CASE OF JANAK S.RANGWALLA V ACIT (2006) 11 SOT 627 (MUM), GOPAL PUROHIT V JCIT (2009) 20 DTR 99 (MUM), CIT V ROHIT ANAND (2010) 327 ITR 445 (DEL), CIT V DEEPAK MITTAL (2010) 324 ITR 411 (P&H), CIT V SAL UJA EXIM LTD. (2010) 329 ITR 603 (P&H) AND CIT V MUNJAL CASTINGS (2008) 303 ITR 23 (P&H). 4. LD. 'AR' CONTENDED THAT THE PROVISIONS OF SECTIO N 263 ARE NOT APPLICABLE AS THE AO TAKEN A LEGALLY PERMISSIBLE VIEW, WHICH CANNOT BE SUBSTITUTED BY AN Y VIEW CONCEIVED BY THE CIT. 5. LD. 'DR', ON THE OTHER HAND, CONTENDED THAT THE AO HAD NOT MADE PROPER ENQUIRIES AND NOT APPLIED HIS T O THE FACT-SITUATION OF THE PRESENT CASE. HE PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF M/S MALABAR INDUSTRIAL CO.LTD. 243 I TR 83 (S.C). LD. 'DR' WAS OF THE OPINION THAT THE ONL Y 3 VIEW, WHICH IS THE FIRST VIEW, HAS BEEN TAKEN BY TH E CIT AND AO HAS NOT TAKEN ANY VIEW. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS, FACTS OF THE CASE AND DECISIONS RELIED UPON BY THE PARTIES. IN THIS CONNECTION, IT IS PER TINENT TO REPRODUCE THE RELEVANT PART OF THE ASSESSMENT OR DER, PASSED BY THE AO ON 01.05.2008 U/S 143(3) OF THE AC T: AN ORIGINAL RETURN DECLARING AN ASSESSABLE INCOME OF RS.20,04,471/- WAS FILED ON 12.09.2005 AND A REVISED RETURN DECLARING AN INCOME OF RS.23,49,471/- WAS FILED ON 09.05.2006 WHICH INCLUDE AN AGRICULTURAL INCOME OF RS.65,000/- FOR THE ASSESSMENT YEAR 2005-06. THE ASSESSEE IS DERIVING A BUSINESS INCOME, RENTAL INCOME AND AN INTEREST INCOME. THE REVISED RETURN WAS PROCESSED U/S 143(1)(A). LATER ON, THE CASE WAS SELECTED UNDER COMPULSORY SCRUTINY. NOTICES U/S 143(2) AND 142(1) ALONGWITH QUESTIONNAIRE WAS SERVED UPON THE ASSESSEE ON 02.02.2007. IN RESPONSE TO NOTICES OF FIXATION SHRI AMARJIT KAMBOJ, CA, COUNSEL OF THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS AND HAS FILED REPLY AND EVIDENCE. THE BOOKS PRODUCED WERE TEST CHECKED. THE DOCUMENTS FURNISHED WERE TEST CHECKED. THE CASE IS ASSESSED AT RETURNED INCOME. 7. A BARE PERUSAL OF THE SAID QUESTIONNAIRE ISSUED BY AO REVEALS THAT THE AO HAD CONCEIVED THE ISSUE IN QUESTION. HE HAS ALSO DISCUSSED THE SAID ISSUE OF SHORT TERM CAPITAL GAIN IN PARA 2 OF THE ASSESSMENT ORDER AND WITHOUT PASSING THE DETAILED ORDER, HAS TAKEN A LEG ALLY 4 PERMISSIBLE VIEW, WHICH CANNOT BE SUBSTITUTED BY TH E VIEW TAKEN BY THE CIT U/S 263 OF THE ACT. THERE IS NO INCORRECT APPLICATION OF LAW OR INCORRECT ASSUMPTIO N OF FACTS IN THE PRESENT CASE, AS CONTEMPLATED IN THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F MALABAR INDUSTRIAL CO. LTD. (SUPRA). 8. AS THE AO HAS TAKEN A LEGALLY PERMISSIBLE VIEW, THE LD. CIT IS NOT COMPETENT TO SUBSTITUTE THE SAME WIT HIN THE PARAMETERS OF THE PROVISIONS OF SECTION 263 OF THE ACT. THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOW ED AND ORDER OF LD. CIT U/S 263 OF THE ACT IS CANCELLE D. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH FEB.,2012. SD/- SD/- (H.L.KARWA) (MEHA R SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 8 TH FEB.,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), CIT,DR ASSISTANT REGISTRAR ITAT, CHANDIGARH