The ACIT, Circle-2, JAMNAGAR V. Senor Metal Pvt. Ltd., JAMNAGAR

ITA 424/RJT/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9524 (ITAT-RAJKOT)
• Duration Of Justice: 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 02-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: P M MAHARSHI C A
• Keywords: Speculation loss; Tax effect

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBULAL, RAJKOT BENCH: RAJKOT .., ! ' #, $ % BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER &./ I.T.A. NO.424/RJT/2014 ( / ASSESSMENT YEAR : 2010-11) ASSTT.CIT CIRCLE-2 JAMNAGAR / VS. SENOR METAL PVT.LTD. PLOT NO.353, GIDC, PHASE-II DARED JAMNAGAR ( & ./ ) & ./ PAN/GIR NO. : AACCS 9863 J ( (* / APPELLANT ) .. ( +,(* / RESPONDENT ) (* - / APPELLANT BY : SHRI AVINASH KUMAR, SR.DR +,(* . - / RESPONDENT BY : SHRI P.M. MAHARSHI, C.A. ! / 0 . # / DATE OF HEARING 17/02/2015 12 . # / DATE OF PRONOUNCEMENT 18/02/2015 3 / O R D E R PER BENCH : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-JAMNAGAR (CIT(A) IN SHORT) DATED 16/04/2014 PERTAINING TO ASSESSMENT YEAR (AY) 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS IN CONSIDERING THAT THE TRANSACTIONS CARRIED OUT BY THE ASSESSEE SQUARELY FALLS WITHIN THE FOUR CORNERS OF HEDGING TRANSACTION AND NOT SPECULATION AS PER CIRCULAR NO.23D AND PROVISION (A) TO SECTION 43 OF THE IT ACT. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE DISALLOWANCE OF LUMP-SUM AMOUNT OF 20% OF EXPENSES OF RS.4,00,000/-. ITA NO.424/RJT/2014 ACIT VS. SENOR METAL PVT.LTD. ASST.YEAR - 2010-11 - 2 - 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD.CIT(A) BE SET AS IDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THAT THE REVENUE CRAVES LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ANY GROUNDS OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 28/03/2013, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE DISALLOWANCE OUT OF SPECULATIVE LOSS OF RS.4,09,909 /-, DISALLOWANCE OUT EXPENSES OF RS.4 LACS, DISALLOWANCE OF INTEREST ON LATE PAYMENT OF TDS OF RS.12,800/- AND DISALLOWANCE U/S.14A OF THE ACT OF RS.2,702/-. HENCE, THE TOTAL DISALLOWANCE MADE BY THE AO WAS RS.8,25,4 11/- AGAINST THE DECLARED INCOME OF RS.2,93,19,930/-. THE AO ASSES SED INCOME AT RS.3,01,45,341/-. AGAINST THIS, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A). AGAINST THE DISALLOWANCE OF RS.4,09,909 /- AND RS.4 LACS AS LUMP SUM AMOUNT OF 20% OF EXPENSES. THE LD.CIT(A) AFTER CONSIDERING THE SUBMISSIONS ALLOWED THE APPEAL OF THE ASSESSEE. 3. AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE IN VIEW OF THE CBDT CIRCULAR NO.3 OF 2011 [F.NO.279/MISC.142/2007-ITJ], DATED 9-2-2011. HOWEVER, THE LD.SR.DR SUBMITTED THAT IN THE OTHER Y EAR, THE ADDITION MADE BY THE AO IS MORE THAN THE MONETARY LIMIT. HE SUBMITTED THAT THE PRESENT APPEAL IS MAINTAINABLE. ITA NO.424/RJT/2014 ACIT VS. SENOR METAL PVT.LTD. ASST.YEAR - 2010-11 - 3 - 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS NOT DISPUTED THAT IN THE PRESENT APPEAL THE T AX EFFECT IS BELOW THE MONETARY LIMIT PRESCRIBED IN THE CBDT CIRCULAR NO.0 3 OF 2011 (SUPRA). THE LD.SR.DR HAS NOT POINTED OUT AS TO HOW THE PRES ENT APPEAL IS MAINTAINABLE DESPITE THE LOWER TAX EFFECT MONETARY LIMIT AS PRESCRIBED IN THE CBDT CIRCULAR NO.03 OF 2011(SUPRA). THEREFORE, WE DECLINE TO ENTERTAIN THE PRESENT APPEAL, SAME IS HEREBY DISMIS SED AS NOT MAINTAINABLE IN VIEW OF THE CBDT CIRCULAR NO.3 OF 2 011(SUPRA). IT IS FURTHER CLARIFIED THAT WE HAVE NOT EXPRESSED OUR OP INION ON THE MERIT OF THE CASE, HOWEVER, IF IN ANY OTHER CASE, THE REVE NUE WOULD BE AT LIBERTY TO APPROACH THIS TRIBUNAL IN CASE THE MONETARY LIMI T IS ABOVE THE PRESCRIBED LIMIT AS PRESCRIBED BY THE CBDT CIRCULA R NO.03 OF 2011(SUPRA). 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AS NOT MAINTAINABLE. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, THE 18 TH DAY OF FEBRUARY, 2015 AT RAJKOT. SD/- SD/- ( .. ) ( ! ' #) $ ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT; DATED 18 / 02 /2015 .. , /.$../ T.C. NAIR, SR. PS ITA NO.424/RJT/2014 ACIT VS. SENOR METAL PVT.LTD. ASST.YEAR - 2010-11 - 4 - / COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. +,(* / THE RESPONDENT. 3. &6& # ! 7# / CONCERNED CIT 4. ! 7# ( ) / THE CIT(A)-JAMNAGAR 5. 9/' : +$#$ , , /DR,ITAT, RAJKOT 6. : EF G 0 / GUARD FILE. / BY ORDER, , 9# +$# //TRUE COPY// !/ '# $% ( DY./ASSTT.REGISTRAR) # %&# ' , / ITAT, RAJKOT 1. DATE OF DICTATION .. 17.2.15 (DICTATION-PAD 5- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17.2.15 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BAC K TO THE SR.P.S./P.S.18.2.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 18.2.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK.. . 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER