The ACIT, Circle-4(1), Visakhapatnam V. M/s Sandhya Marines Ltd., Visakhapatnam

ITA 427/VIZ/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 2762 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-10-2010
• Assessment Year: 2007-2008
• Appeal Filed On: 04-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T L PETER
• Keywords: Speculation loss; Speculative transactions

Judgement Text

ITANO.427 OF 2010 SANDHYA MARINES LTD VISAKHAPATNAM PAGE 1 OF 2 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.427/VIZAG/2010 ASSESSMENT YEAR: 2007 - 08 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-4(1) VISAKHAPATNAM VS. SANDHYA MARINES LTD., VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO.AADCS 1423 K APPELLANT BY: SHRI T.L. PETER, DR RESPONDENT BY: SHRI G.V.N. HARI, CA ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 07.05.2010 PASSED BY LEARNED CIT(A), VISAKHAPATNAM AND IT RELATES TO THE ASSESSMENT YEAR 2007-08. THE REVENUE IS CHALLENGIN G THE DECISION OF THE LEARNED CIT (A) IN HOLDING THAT THE FORWARD CONTRAC T LOSS OF RS.38,49,114/- IS NOT SPECULATION LOSS, BUT ONLY A TRADING LOSS. 2. IT WAS BROUGHT TO OUR NOTICE BY LEARNED AUTHORISE D REPRESENTATIVE THAT IDENTICAL ISSUES HAVE BEEN ADJUDICATED BY THIS BENCH IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE, VIDE ITS ORDER DATED 24-3-2010, IN ITA NO.380/VIZAG/2008 AND ITA NO.349/VIZAG/2009 RELATIN G TO THE ASSESSMENT YEARS 2005-06 AND 2006-07. WE HAVE GONE THROUGH THE SAID ORDER AND EXTRACT BELOW THE OPERATIVE PORTION OF THE SAID ORD ER, FOR THE SAKE OF CONVENIENCE: WE HAVE HEARD THE RIVAL SUBMISSION AND CAREFULLY P ERUSED THE ORDERS OF THE AUTHORITIES BELOW AND ORDERS OF T HE TRIBUNAL REFERRED TO AND FROM ITS PERUSAL WE FIND F ORCE IN THE CONTENTIONS OF THE ASSESSEE. THIS BENCH OF THE TRIB UNAL HAS TAKEN A CONSISTENT VIEW IN THE CASE OF COASTAL CORP ORATION LTD.,(ITA NO.149/VIZAG/2002) AND LAVANYA ENTERPRISE S (ITA NO.505/VIZAG/2004) THAT IF THERE IS A SETTLEMENT ON CONTRACT BETWEEN TWO PARTIES OTHERWISE THAN BY DELIVERY, IT CAN BE ITANO.427 OF 2010 SANDHYA MARINES LTD VISAKHAPATNAM PAGE 2 OF 2 TERMED AS SPECULATIVE TRANSACTIONS. BUT THERE IS NO SETTLEMENT AND THE SETTLEMENT IS INTERMEDIARY I.E. WITH BANK AND WHAT IS ACTUALLY PAID TO THE BANK BY THE ASSESS EE IS CANCELLATION CHARGES FOR CANCELING THE FORMAL CONTR ACT AND HENCE IT CAN ONLY BE HELD TO THE BUSINESS LOSS. SIN CE THE FACTS OF THE IMPUGNED CASE ARE SIMILAR TO THE AFORE SAID CASES, WE FIND NO REASON TO TAKE A CONTRARY VIEW. F OLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF COASTAL CO RPORATION LTD., AND LAVANYA ENTERPRISES (SUPRA), WE DECIDE TH IS ISSUE IN FAVOUR OF THE ASSESSEE. SINCE NO INFIRMITIES IS POINTED OUT IN THE ORDER OF THE CIT (A) WE CONFIRM HIS ORDER. 3. WE NOTICE FROM THE ORDER OF LEARNED CIT(A) T HAT THE FIRST APPELLATE AUTHORITY HAS FOLLOWED THE DECISION OF THIS BENCH C ITED ABOVE TO DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. HENCE, THE LEARNE D CIT(A) HAS FOLLOWED THE DECISION OF THIS BENCH, WE DO NOT FIND ANY REAS ON TO INTERFERE WITH HIS DECISION. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED. PRONOUNCED IN THE OPEN COURT ON 8 TH OCTOBER, 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:08-10-2010 COPY TO 1 THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-4(1) VISAKHAPATNAM 2 M/S SANDHYA MARINES LTD., 32, PANDURANGAPURAM, VI SAKHAPATNAM 3 4. THE CIT 2, VISAKHAPATNAM THE CIT(A), VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM