HIND COMMERCE LTD, MUMBAI V. ACIT CIR 6(3), MUMBAI

ITA 4302/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59933 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2007-2008
• Appeal Filed On: 26-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Assessee Lawyers: R C JAIN
• Keywords: Revised return

Judgement Text

ITA NO 4302 OF 2011 HIND COMMERCE LTD MUMBAI -H BENCH PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL 'H' BENCH, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI V.D. RAO, JUDICIAL MEMBER ITA NO. 4302/MUM/2011 (ASSESSMENT YEAR: 2007-08) HINDI COMMERCE LTD VS ACIT, CIR 6(3) 307 ARUN CHAMBERS AAYKAR BHAVAN TARDEO RD. TARDEO M.K. ROAD MUMBAI 400034 MUMBAI 400020 PAN AAACH 9377 A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R.C.JAIN & AJAY DAGA RESPONDENT BY: SHRI V.V. SHASTRI, SR.DR DATE OF HEARING: 28/3/2012 DATE OF PRONOUNCEMENT: 30/3/2012 O R D E R PER B. RAMAKOTAIAH, A.M. THIS IS AN ASSESSEES APPEAL AGAINST THE ORDERS OF THE CIT (A)-12 MUMBAI DATED 25.02.2011. THE ISSUE IS WITH REFERENC E TO NON ALLOWANCE OF A CLAIM BY ASSESSEE WHILE COMPUTING TH E ASSESSMENT BY THE ASSESSING OFFICER. 2. BRIEFLY STATED, ASSESSEE FILED RETURN OF INCOME DE CLARING TOTAL INCOME OF ` .45,73,680/-. IN THE COMPUTATION OF INCOME, THE ASSESSEE UNDER THE HEAD CAPITAL GAINS ADDED BACK AN AMOUNT OF ` .4,95,263/- STATED TO BE DISALLOWANCE OF LOSS ON AC COUNT OF PROVISIONS OF SECTION 94(7). IN THE COURSE OF SCRUT INY, THE ASSESSEE HAVING NOTICED THAT THE LOSS ON REDEMPTION OF INVES TMENT IN UNITS OF BIRLA FRONTLINE EQUITY FUND WAS WRONGLY ADDED, CLAI MED LOSS ON THE REASON THAT THE AMOUNT WAS INVESTED PRIOR TO 3 MONT HS OF THE RECORD DATE. ASSESSING OFFICER, HOWEVER, REJECTED T HE CLAIM STATING THAT THE ASSESSEE HAS NOT FILED REVISED RETURN, REL YING ON THE CASE OF HON'BLE SUPREME COURT IN THE CASE OF M/S GOETZ INDI A LTD, 284 ITR 232. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT (A), WHO UPHELD THE CONTENTIONS OF THE ASSESSING OFFICER AND DISMIS SED THE ITA NO 4302 OF 2011 HIND COMMERCE LTD MUMBAI -H BENCH PAGE 2 OF 3 ASSESSEES CLAIM. ASSESSEE IS CLAIMING RELIEF ON TH E ABOVE ISSUE. ALL THE GROUNDS RAISED ARE ON ONE ISSUE ONLY. 3. WE HAVE HEARD THE LEARNED COUNSEL AND THE LEARNED DEPARTMENTAL REPRESENTATIVE. THERE IS NO DISPUTE WI TH REFERENCE TO THE FACT THAT THE ASSESSEE INVESTED IN UNITS OF BIR LA SUN LIFE MUTUAL FUND AN AMOUNT OF ` .20 LAKHS ON 18/5/2006 AND REDEEMED IT ON 29/8/2006 THEREBY INCURRING THE ABOVE LOSS. THERE I S ALSO NO DISPUTE WITH THE FACT THAT ON 28/8/2006, THE SAID M UTUAL FUND DECLARED DIVIDEND PAY OUT AT ` .6/- PER UNIT TOTALING TO ` .5,16,795/- WHICH WAS RECEIVED BY THE ASSESSEE, AS CAN BE SEEN FROM THE STATEMENT. THE ASSESSEE CLAIMED THE LOSS ON REDEMPT ION OF UNITS AT ` .4,96,263/- VIDE THE ABOVE REFERRED LETTER DATED 4. 9.2009. THE ASSESSEES CLAIM WAS NOT EXAMINED ON ITS MERITS AND THE ASSESSING OFFICER REJECTED ON THE REASON THAT THE ASSESSEE HA S NOT FILED THE REVISED RETURN. THE LEARNED CIT (A) ALSO WITHOUT GO ING INTO THE MERITS OF THE CLAIM CONFIRMED THE ASSESSING OFFICER S ORDER, EVEN THOUGH THE CIT (A) HAS CO-TERMINUS POWER TO EXAMINE AND CONSIDER THE CLAIM. THERE IS NO DISPUTE THAT THE ITAT CAN EN TERTAIN SUCH LEGAL CLAIMS. THEREFORE, WE ARE OF THE VIEW THAT THE REAS ONS STATED BY THE ASSESSING OFFICER AND THE CIT (A) FOR REJECTING THE ASSESSEES CLAIM WITHOUT EXAMINING THE CLAIM ON MERIT IS NOT CORRECT . 4. PROVISIONS OF SECTION 94(7) ARE AS UNDER: SECTION.94(7): [(7) WHERE (A) ANY PERSON BUYS OR ACQUIRES ANY SECURITIES OR UNIT WITHIN A PERIOD OF THREE MONTHS PRIOR TO THE RECORD DATE; (B) SUCH PERSON SELLS OR TRANSFERS (I) SUCH SECURITIES WITHIN A PERIOD OF THREE MONTH S AFTER SUCH DATE; OR (II) SUCH UNIT WITHIN A PERIOD OF NINE MONTHS AFTE R SUCH DATE;] (C) THE DIVIDEND OR INCOME ON SUCH SECURITIES OR U NIT RECEIVED OR RECEIVABLE BY SUCH PERSON IS EXEMPT, TH EN, THE LOSS, IF ANY, ARISING TO HIM ON ACCOUNT OF SUCH PURCHASE AND SALE OF SECURITIES OR UNIT, TO THE EXT ENT SUCH LOSS DOES NOT EXCEED THE AMOUNT OF DIVIDEND OR INCOME RECEIVED OR RECEIVABLE ON SUCH SECURITIES OR ITA NO 4302 OF 2011 HIND COMMERCE LTD MUMBAI -H BENCH PAGE 3 OF 3 UNIT, SHALL BE IGNORED FOR THE PURPOSES OF COMPUTIN G HIS INCOME CHARGEABLE TO TAX. 5. AS CAN BE SEEN, THERE ARE THREE CONDITIONS TO SATIS FY TO ALLOW THE LOSS INCURRED IN THESE TRANSACTIONS, GENERALLY KNOWN AS DIVIDEND STRIPPING. WHETHER THE CLAIM CAN BE ENTERTAINED UND ER SECTION 94(7) IS TO BE EXAMINED WITH REFERENCE TO THE PROVISIONS AS WELL AS LAW ON THE ISSUE. THEREFORE, WE ARE OF THE OPINION THAT TH E ASSESSING OFFICER SHOULD HAVE EXAMINED THE ISSUE ON MERITS BEFORE ALL OWING OR NOT ALLOWING THE CLAIM. IN VIEW OF THIS, WE RESTORE THE MATTER TO THE FILE OF ASSESSING OFFICER WHO IS DIRECTED TO EXAMINE THE CL AIM ON MERITS AS PER THE PROVISIONS OF THE ACT AND ALLOW OR DISALLOW THE ASSESSEES CLAIM AFTER GIVING DUE OPPORTUNITY TO ASSESSEE. WIT H THESE DIRECTIONS, THE ASSESSEES GROUNDS ARE ALLOWED STAT ISTICALLY. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH, 2012. SD/- SD/- (V.D. RAO) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 30 TH MARCH, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, H BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI