DCIT 5(1), MUMBAI V. BLUE SHELL INVESTMENT P. LTD, MUMBAI

ITA 4299/MUM/2009

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9275 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 15-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S V JOSHI
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI , BEFORE SHRI D. MANMOHAN, V.P. AND SHRI SANJAY AROR A, AM ! I.T.A. NO. 4299/MUM/2009 ( / ASSESSMENT YEAR: 2006-07) ASST. CIT-5(1), ROOM NO. 525, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400 020 ! VS. BLUE SHELL INVESTMENT PVT. LTD. M/S. KEJRIWAL HOUSE, 7, N. GAMADIA ROAD, MUMABI-400 026 '! # ./PAN/GIR NO. AAACB 1831 B ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) '$'( / APPELLANT BY : SHRI V. K. BORA %&'$'( / RESPONDENT BY : SHRI S. V. JOSHI ) *+',- / DATE OF HEARING : 10.02.2015 ./0',- / DATE OF PRONOUNCEMENT : 11.03.2015 1! O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-V, MUMBAI (CIT(A) FOR SHO RT) DATED 04.05.2009, PARTLY ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSES SMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMEN T YEAR (A.Y.) 2006-07 VIDE ORDER DATED 08.12.2008. 2. THE APPEAL RAISES THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND AS PER LAW, THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSEE HAD PAID LEASE RENT OF RS.6,00,000/- TO THE PERSONS COVERED BY SEC TION 40A(2)(A) OF THE ACT WHEREAS LEASE RENT RECOVERED IS ONLY RS.4,80,000/-. 2 ITA NO. 4299/MUM/2009 (A.Y. 2006-07) ASST. CIT VS. BLUE SHELL INVESTMENT PVT. LTD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND AS PER LAW, THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT DISCU SSED IN DETAIL IN THE ASSESSMENT ORDER WHILE DIRECTING THE A.O. TO ASSESS THE PROFIT ON SALE OF SHARES AS CAPITAL GAINS INSTEAD OF BUSINESS. 3. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. AUTHO RIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, THAT THE APPEAL BY THE REVENUE RAISES THE SAME ISSUES AS BEFORE THE APPELLATE TRIBUNAL FOR A.Y. 2004-05 WHICH HAVE SINC E BEEN DISPOSED OF BY IT. ADVERTING TO THE COPIES OF THE SEPARATE ORDERS BY IT PLACED O N RECORD FOR THAT YEAR, I.E., PURSUANT TO THE APPEALS BY THE ASSESSEE AND THE REVENUE, HE WOU LD SUBMIT THAT GROUND NO. 1, BEING THE SUBJECT MATTER OF THE REVENUES APPEAL (IN ITA NO. 4469/MUM/2008 DATED 13.06.2012/PB PG. 14-16) HAD BEEN SET ASIDE BY THE TRIBUNAL IN-AS-MUCH AS THE SAME HAD A LOW TAX EFFECT, SO THAT IT WAS NOT MAINTAINABLE IN TERMS OF SECTION 268A OF THE ACT (REFER PARA 3 OF THE ORDER). AS REGARDS GROUND NO.2, THE ISSUE IS RECURRING AND STANDS RESTORED BY THE TRIBUNAL BACK TO THE FILE OF THE ASSESSING OFFICER (A.O.) FO R FRESH ADJUDICATION BY APPLYING THE PRINCIPLE AS ENSHRINED IN THE DECISION CITED TO THE FACTS OF THE CASE, AND AFTER AFFORDING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. THE MATTER WOULD HAVE TO BE DECIDED ACCORDINGLY (REFER PARA 7 IN ITA NO. 4468/MUM/2008 DATED 12.07.2013/PB PGS.17-25). THE LD. DEPARTMENTAL REPRESENTATIVE (DR) WOULD FAIR LY AGREE WITH THE CONTENTIONS RAISED BY THE LD. AR. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. CLEARLY, BOTH THE ISSUES BEING AGITATED BY THE REVE NUE IN THE INSTANT CASE ARE SUBSISTING ISSUES, ARISING YEAR AFTER YEAR. THE TRI BUNAL FOR A.Y. 2004-05, I.E., THE EARLIEST YEAR FOR WHICH THE ISSUE RAISED PER GROUND NO. 2 ST ANDS BROUGHT TO OUR NOTICE BY THE PARTIES, AFTER A DETAILED DISCUSSION, EXPLAINING AN D ELUCIDATING THE PRINCIPLE/CRITERIA GUIDING THE DECISION IN THE MATTER, SET ASIDE THE A SSESSMENT FOR FRESH DETERMINATION. THE MATTER, ACCORDINGLY, WOULD WARRANT BEING SIMILARLY RESTORED TO THE FILE OF THE A.O. WITH LIKE DIRECTIONS. 3 ITA NO. 4299/MUM/2009 (A.Y. 2006-07) ASST. CIT VS. BLUE SHELL INVESTMENT PVT. LTD. THE FIRST ISSUE, I.E., AS RAISED PER GROUND NO. 1, AGAIN RECURRING, HAS NOT RECEIVED CONSIDERATION AT THE END OF THE TRIBUNAL IN-AS-MUCH AS THE REVENUES APPEAL WAS NOT MAINTAINABLE. THE LD. CIT(A) FOR THE CURRENT YEAR O NLY FOLLOWED HIS PREDECESSOR FOR THE EARLIER YEARS, I.E., A.YS. 2004-05 AND 2005-06. A P ERUSAL OF THE ORDER BY THE FIRST APPELLATE AUTHORITY FOR A.Y. 2005-06, WHEREAT THE M ATTER, AS IT APPEARS, WAS DECIDED BY IT FOR THE FIRST TIME, HOWEVER, DOES NOT BRING OUT THE FULL FACTS OF THE CASE, TO ENABLE ITS PROPER DETERMINATION. THIS MATTER, ACCORDINGLY, IS RESTORED BACK TO THE FILE OF THE A.O. FOR THE PURPOSE, AND WHO SHALL ALLOW REASONABLE OPPORTU NITY OF HEARING TO THE ASSESSEE, ALSO ADDRESSING THE ASPECT AS TO WHY THIS ISSUE, I.E., T HE CLAIM OF LOSS AND, FURTHER, AT THE SAME AMOUNT OF RS.1.20 LACS, SHOULD ARISE FROM YEAR TO Y EAR. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. 20,3*'4' 5678* 9 ,',: ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 11, 201 5 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER ) + MUMBAI; ; DATED : 11.03.2015 * ? / THE CIT(A) 4. ) =, / CIT - CONCERNED 5. @*AB%<,