ACIT, Cirlce-2(2), Hyd, Hyderabad V. The Charminar Co-operative Urban Bank Ltd., Hyd, Hyderabad

ITA 407/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2674 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L R AMJI RAO
• Assessee Lawyers: M NEELIMA DEVI
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. AY. APPELLANT RESPONDENT 406/HYD/2016 2008-09 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-2(2), HYDERABAD M/S. THE CHARMINAR CO-OPERATIVE URBAN BANK LTD., HYDERABAD [PAN: AAACT7352H] 407/HYD/2016 2009-10 FOR REVENUE : SHRI L. RAMJI RAO, DR FOR ASSESSEE : SMT. M. NEELIMA DEVI, AR DATE OF HEARING : 23-08-2017 DATE OF PRONOUNCEMENT : 23-08-2017 O R D E R PER D. MANMOHAN, VICE-PRESIDENT: THESE TWO APPEALS ARE FILED AT THE INSTANCE OF THE REVE NUE AND THEY ARE DIRECTED AGAINST THE ORDERS PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEALS)-2, HYDERABAD. COMMON ISSUE IS INVOLVED IN BOTH THESE APPEALS AND THEREFOR E, THE FOLLOWING COMMON GROUND WAS URGED: WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE CIT(A) IS CORRECT IN HOLDING THAT THE LOSS ON SALE OF INVESTM ENT IS A BUSINESS LOSS BY FOLLOWING THE JURISDICTIONAL TRIBUNALS DECISION IN ASSESSEES OWN CASE IN ITA NO. 1196/HYD/2007 DATED 13.06.2008 FOR A.Y. 200 4-05. I.T.A. NOS. 406 & 407/HYD/2016 :- 2 - : 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE INCURRED LO SS ON SALE OF GOVERNMENT SECURITIES AND IT WAS CLAIMED AS DEDUC TION. THE ASSESSING OFFICER (AO) WAS OF THE VIEW THAT THE SAID L OSS IS CAPITAL IN NATURE. BEFORE THE LD.CIT(A), THE ASSESSEE CONTENDE D THAT THE EXCESS FUNDS AVAILABLE WITH THE BANK ARE NORMALLY INV ESTED IN FIXED DEPOSITS OR IN RBI APPROVED GOVERNMENT SECURITIE S ON WHICH THE ASSESSEE EARNED INTEREST/PROFIT IN THE NORMAL COURSE OF BANKING BUSINESS AND HENCE, IT HAS TO BE TREATED AS REVENUE I N NATURE. RELIANCE WAS ALSO PLACED UPON THE DECISION OF ITAT A BENCH, HYDERABAD (ITA NO. 1196/HYD/2007) DT. 13-06-2008 IN ASSESSEES OWN CASE, WHEREIN IT WAS HELD THAT PROFIT EARNED ON SAL E OF INVESTMENT IS A BUSINESS INCOME. IT WAS CONTENDED THAT TH ERE CANNOT BE ANY DIFFERENTIATION BETWEEN PROFIT OR LOSS. WHEN PROFIT IS TREATED AS BUSINESS INCOME, THE LOSS ON SALE OF GOVER NMENT SECURITIES SHOULD ALSO BE TREATED AS BUSINESS LOSS. 3. BY RESPECTFULLY FOLLOWING THE DECISION OF THE ITAT IN ASSESSEES OWN CASE FOR THE EARLIER YEAR, THE LD.CIT( A) ACCEPTED THE CONTENTION OF THE ASSESSEE. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. THOUGH THE LD.DR RELIED UPON THE ORDER P ASSED BY THE AO, IT WAS NOT DISPUTED THAT IDENTICAL ISSUE WAS DECIDED BY THE ITAT IN ASSESSEES OWN CASE FOR THE EARLIER YEAR. L D.DR WAS UNABLE TO PLACE ANY JUDGMENT OF SUPERIOR FORUM, WHEREIN A CO NTRARY VIEW WAS TAKEN ON THIS ASPECT. 4. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE AND ALSO UPON HEARING, THE LD. COUNSEL APPEARING FOR THE ASSESSEE, WE HOLD THAT THE ORDER PASSED BY THE LD.CIT(A) DO NOT CALL FOR ANY INTERFERENCE. I.T.A. NOS. 406 & 407/HYD/2016 :- 3 - : AS PRONOUNCED IN THE OPEN COURT, BOTH THE APPEALS FILE D BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2017 UPON CONCLUSION OF HEARING SD/- SD/- (S. RIFAUR RAHMAN) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD, DATED 23 RD AUGUST, 2017 TNMM COPY TO : 1. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-2(2 ), HYDERABAD. 2. M/S. THE CHARMINAR CO-OPERATIVE URBAN BANK LTD., 5-9-3, JVL TOWERS, OPP: ASSEMPLE, SAIFABAD, HYDERAB AD. 3. CIT (APPEALS)-2, HYDERABAD. 4. PR.CIT-2, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.