ITO 17(2)(3), MUMBAI V. MITTAL INVESTMENTS, MUMBAI

ITA 4774/MUM/2012

• Counselvise Citation: 477419914 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: DINESH R SHAH
• Keywords: Speculation loss
• Section: 154

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI .. , ! ' , # !, $ BEFORE SHRI R.S.SYAL, AM AND SHRI VIVEK VARMA, JM ITA NO.4774/MUM/2012 : ASST.YEAR 2009-2010 THE INCOME TAX OFFICER WARD 17(2)(3) MUMBAI. M/S.MITTAL INVESTMENTS 404, HIND RAJASTHAN BUILDING 95 DADASAHEB PHALKE ROAD MUMBAI 400 014. PAN : AAOFM2689R. ( %& / // / APPELLANT) ( ( ( ( / VS. ( )*%&/ RESPONDENT) %& + ++ + , , , , / APPELLANT BY : SHRI SURENDRA KUMAR )*%& + , + , + , + , / RESPONDENT BY : SHRI DINESH R.SHAH ( + - / / / / DATE OF HEARING : 29.08.2013 ./0 + - / DATE OF PRONOUNCEMENT : 30.08.2013 !1 !1 !1 !1 / / / / O R D E R PER R.S.SYAL (AM) : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 30.04.2012 IN RELATION TO THE ASSESSMENT YEAR 2009-2010. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE DIRECTION OF THE LEARNED CIT(A) TO ASSESS LOSS OF ` 17,48,648. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE RETURNED NET LOSS OF ` 17,48,648 AFTER ADJUSTING SPECULATION INCOME OF ` 64,29,063 AGAINST REGULAR BUSINESS LOSS OF ` 81,77,711. HOWEVER THE ASSESSING OFFICER ADJUSTED ` 17.48 LAKH AGAINST THE INCOME OF ` 64.29 LAKH, THEREBY ASSESSING TOTAL INCOME AT ` 46,80,415 AGAINST THE RETURNED LOSS OF ` 17,48,648. THIS RESULTED DUE TO THE ORDER PASSED U/ S ITA NO.4774/MUM/2012 M/S.MITTAL INVESTMENTS. 2 143(1) READ WITH SECTION 154 OF THE ACT. IT WAS CON TENDED BEFORE THE LEARNED CIT(A) THAT THE RETURN WAS E-FILED SHOWING LOSS OF ` 17.48 LAKH. IT WAS DUE TO MISTAKE IN PROCESSING THE RETUR N BY THE BANGALORE PROCESSING OFFICE THAT THE CLAIM OF SET OFF OF BUSI NESS LOSS FOR THE CURRENT YEAR AGAINST THE SPECULATION BUSINESS PROFI T ALSO FOR THE CURRENT YEAR WAS NOT ALLOWED. AS AGAINST THAT, THE LOSS CLAIMED BY THE ASSESSEE AT ` 17.48 LAKH WAS ADJUSTED AGAINST INCOME FROM SPECULA TION BUSINESS AT ` 64.29 LAKH THEREBY WRONGLY DETERMINING ASSESSABLE INCOME AT ` 46.80 LAKH. THE LEARNED CIT(A), AFTER GOING THROUGH THE RELEVANT MATERIAL AND CONSIDERING THE RELEVANT PROV ISIONS, ACCEPTED THE ASSESSEES CLAIM, AGAINST WHICH THE REVENUE HAS COME UP IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE ON THE FACT THAT THE ASSESSEE EARNED INCOME FROM SPECULATION BUSINESS AT ` 64.29 LAKH. THERE WAS A REGULAR BUSINESS LOSS OF ` 81.77 LAKH. NOW THE QUESTION ARISES AS TO WHETHER SET OFF OF BUSINESS LOSS FOR THE CURRENT YE AR AGAINST THE SPECULATION INCOME ALSO FOR THE CURRENT YEAR IS PER MISSIBLE? SECTION 70(1) OF THE ACT PROVIDES THAT WHERE THE NET RESULT FOR ANY ASSESSMENT YEAR IN RESPECT OF ANY SOURCE FALLING UNDER ANY HEAD OF INCOME OTHER THAN CAPITAL GAINS, IS A LOSS, THE ASSESSEE SHALL BE ENTITLED TO HAVE THE AMOUNT OF SUCH LOSS SET OFF AGAINST HIS INCOME FROM ANY OTHER SOURCE UNDER THE SAME HEAD. THIS PROVISION IS SUBJECT TO OTHER PROVISIONS OF THE ACT. AT THIS JUNCTURE IT IS RELEV ANT TO CONSIDER SECTION 73(1) WHICH DEALS WITH LOSS IN SPECULATION BUSINESS. IT ITA NO.4774/MUM/2012 M/S.MITTAL INVESTMENTS. 3 PROVIDES THAT ANY LOSS COMPUTED IN RESPECT OF SPECU LATION BUSINESS CARRIED ON BY THE ASSESSEE SHALL NOT BE SET OFF EXC EPT AGAINST PROFITS AND GAINS, IF ANY, OF ANOTHER SPECULATION BUSINESS. WHEN WE CONSIDER SECTION 73(1) IN JUXTAPOSITION TO SECTION 70(1), TH E PICTURE WHICH EMERGES IS THAT LOSS FROM ONE SOURCE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION IS ELIGIBLE FOR SE T OFF AGAINST ANOTHER SOURCE UNDER THE SAME HEAD. AS BOTH SPECULATION BUS INESS AND REGULAR BUSINESS FALL UNDER THE HEAD CHAPTER IV-D, SUCH ADJ USTMENT IS PERMISSIBLE EXCEPT TO THE EXTENT CONTAINED IN SECTI ON 73(1). THE LATTER PROVISION, IN TURN, PROHIBITS THE SETTING OFF OF L OSS FROM SPECULATION BUSINESS AGAINST INCOME FROM NON-SPECULATION BUSINE SS. INSOFAR AS THE FACTS OF THE INSTANT CASE ARE CONCERNED, WE FIND TH AT THE ASSESSEE CLAIMED SET OFF OF SPECULATION INCOME (NOT SPECULAT ION LOSS) AGAINST THE LOSS FROM REGULAR BUSINESS. SUCH A COURSE OF SE T OFF IS FULLY PERMISSIBLE AS PER THE RELEVANT PROVISIONS. WE, THE REFORE, APPROVE THE VIEW TAKEN BY THE LEARNED CIT(A). 5. 2 -3 4 25 + 5- 67 IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF AUGUST, 2013. !1 + ./0 8!(3 / + 9 SD/- SD/- (VIVEK VARMA) (R.S.SYAL) # ! # ! # ! # ! / JUDICIAL MEMBER ! ! ! ! / ACCOUNTANT MEMBER MUMBAI ; 8!( DATED : 30 TH AUGUST, 2013. DEVDAS* ITA NO.4774/MUM/2012 M/S.MITTAL INVESTMENTS. 4 !1 + )#-:' ;'0- !1 + )#-:' ;'0- !1 + )#-:' ;'0- !1 + )#-:' ;'0-/ COPY OF THE ORDER FORWARDED TO : 1. %& / THE APPELLANT 2. )*%& / THE RESPONDENT. 3. < () / THE CIT, MUMBAI. 4. < / CIT(A)-29, MUMBAI. 5. '?9 )#-#( , , / DR, ITAT, MUMBAI 6. 9@ A / GUARD FILE. !1( !1( !1( !1( / BY ORDER, *'- )#- //TRUE COPY// B B B B/ // /6 5 6 5 6 5 6 5 ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI