VISARIA SECURITIES P.LTD, MUMBAI V. ASST CIT 4(2), MUMBAI

ITA 4958/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3166 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: F
• Next Hearing Date: 02-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 28-06-2013
• Court: TRIBUNAL
• Keywords: Speculation loss
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.4958/MUM/2013 ASSESSMENT YEAR: 2009-10 VISARIA SECURITIES P. LTD., 301-A COMMERCE HOUSE, 140 N.M. RD. FOUNTAIN MUMBAI-400001 / VS. ASST. CIT 4(2) AAYAKAR BHAVAN. MUMBAI-400020 (ASSESSEE) (REVENUE) P.A. NO.AAACV7721L / ASSESSEE BY SHRI VIJAY MEHTA (AR) / REVENUE BY SHRI ARVIND KUMAR (DR) ! ' # $ / DATE OF HEARING : 2/09/2015 ! # $ / DATE OF ORDER: 30/09/2015 ! / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-8, MUMBAI DATED 15.03.2013 FOR THE ASSESSMENT YEAR 200 9-10, VISARIA SECURITIES P. LTD 2 DECIDED AGAINST THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT. 2 . WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES AS WELL AS MATERIAL PLACED BEFORE US. 3 . THE BRIEF FACTS, AS CULLED OUT FROM THE MATERIAL AVAILABLE ON THE RECORD, ARE THAT DURING THE YEAR, THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF SHARE BROKING & INVE STMENT. THE ASSESSEE HAD FILED ITS RETURN OF INCOME DECLARI NG TOTAL LOSS OF RS.5,32,94,407/- UNDER THE HEAD INCOME FROM BUSI NESS. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER (HEREIN AFTER CALLED AS AO) HELD THAT THE LOSS SHOWN BY THE ASSESSEE I N ITS RETURN, IS A SPECULATION LOSS, IN VIEW OF EXPLANATION OF SECTION 73 OF THE INCOME TAX ACT 1961. 4. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE LD COMMISSIONER OF INCOME TAX (APPEALS)[(HEREINAFTER C ALLED AS CIT(A)}, WHEREIN THE CLAIM OF THE ASSESSEE WAS REJE CTED AND ORDER OF THE AO IN TREATING THE LOSS CLAIMED BY THE ASSESSEE, AS SPECULATION LOSS, WAS CONFIRMED. 5. BEING AGGRIEVED AGAIN, THE ASSESSEE FILED AN APPEA L BEFORE THE TRIBUNAL. IN THE APPEAL MEMO, THE ASSESSEE HAD TAKEN ONLY ONE GROUND, FOR CHALLENGING THE ACTION OF LD C IT(A) IN TREATING THE LOSS SHOWN BY THE ASSESSEE AS SPECULA TION LOSS. HOWEVER, DURING THE COURSE OF HEARING, BEFORE US, T HE ASSESSEE HAS FILED TWO MORE GROUNDS AS ADDITIONAL GROUNDS, N UMBERED VISARIA SECURITIES P. LTD 3 AS GROUND NO 2 & 3. AFTER HEARING BOTH THE SIDES, O N ALL THE GROUNDS, INCLUDING ADMISSIBILITY OF THE ADDITIONAL GROUNDS, THE APPEAL IS DISPOSED GROUND-WISE AS UNDER: 6. GROUND NO.1 : IN THIS GROUND, AS STATED ABOVE, THE ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN TREATING THE LOSS SHOWN BY THE ASSESSEE AS SPECULATION LOSS. 6.1. DURING THE COURSE OF HEARING, LD. COUNSEL OF THE A SSESSEE STATED, FAIRLY, THAT THIS GROUND WAS COVERED AGAINS T THE ASSESSEE ON THE BASIS OF JUDGMENTS AVAILABLE AS ON DATE AND THEREFORE, ASSESSEE WAS NOT WILLING TO PRESS THIS G ROUND. IN VIEW OF THE ABOVE, THE GROUND NO.1 IS DISMISSED AS NOT PRESSED. 7 . GROUNDS NO. 2 AND 3 (ADDITIONAL GROUNDS): ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCED AS UN DER: WITHOUT PREJUDICE TO ANY OTHER GROUND, ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, TH E LD AO ERRED IN NOT ALLOCATING INCOME FROM KEYMAN INSURANCE TO THE SPECULATION ACTIVITY. THE APPELLAN T PRAY THAT AO MAY BE DIRECTED TO ALLOCATE INCOME FROM KEYMAN INSURANCE TO THE NORMAL BUSINESS ACTIVITY AND SPECULATION ACTIVITY. 3. WITHOUT PREJUDICE TO ANY OTHER, GROUND, ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, IN VIEW OF THE HONBLE HIGH COURT DECISION IN CASE OF DLF COMMERCIAL DEVELOPERS LIMITED (ITA 94 OF 2013), THE VISARIA SECURITIES P. LTD 4 INCOME FROM TRADING IN FUTURES AND OPTIONS SHOULD B E TREATED AS SPECULATION INCOME. THE APPELLANT PRAYS THAT AO MAY BE DIRECTED TO TREAT INCOME FROM FUTURE AND OPTIONS AS INCOME FROM SPECULATIVE ACTIVITY. 7.1. DURING THE COURSE OF HEARING, IT WAS SUBMITTED BY THE LD. COUNSEL OF THE ASSESSEE, THAT THESE GROUNDS WERE OM ITTED TO BE TAKEN BEFORE THE LD. CIT(A) AS WELL AS BEFORE TH E TRIBUNAL ALONG WITH THE APPEAL MEMO. IT WAS FURTHER SUBMITTE D BY THE LD. COUNSEL THAT THESE GROUND ARE LEGAL GROUNDS AND CAN BE DECIDED ON THE BASIS OF FACTUAL MATERIAL HELD ON RE CORDS. HE PLACED RELIANCE IN SUPPORT OF HIS REQUEST, FOR ADMI SSION OF THESE ADDITIONAL GROUNDS, UPON THE JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF JUTE CORPORATION OF IN DIA VS CIT AND THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN T HE CASE OF NEW INDIA INDUSTRIES LTD. VS. CIT 207 ITR 1010. 7.2. ON THE OTHER HAND, LD. DR PLACED RELIANCE ON THE O RDER OF THE LOWER AUTHORITIES. NO OBJECTION WAS RAISED BY T HE LD. DR WITH REGARD TO ADMISSION OF THE ADDITIONAL GROUNDS, IN VIEW OF THE JUDGMENTS RELIED BY THE LD. COUNSEL. 7.3. WE HAVE GONE THROUGH THE SUBMISSIONS OF BOTH THE S IDES. IT IS NOTED BY US THAT BOTH THESE GROUNDS I.E. GROU NDS NO. 2 AND 3, ARE LEGAL GROUNDS AND THEREFORE, TO MEET THE ENDS OF JUSTICE, THESE ARE ADMITTED. 7.4. ON MERITS OF THESE GROUNDS, IT HAS BEEN SUBMITTED BY THE LD COUNSEL, WITH RESPECT TO GROUND NO 2, THAT WHEN AO VISARIA SECURITIES P. LTD 5 TREATED THE LOSS CLAIMED BY THE ASSESSEE AS SPECULA TION LOSS, THE FAIRNESS DEMANDED THAT AO OUGHT TO HAVE ALLOCAT ED INCOME FROM KEYMAN INSURANCE TO THE SPECULATION ACTIVITY. IT WAS REQUESTED THAT AO SHOULD BE DIRECTED TO ALLOCATE TH E INCOME FROM KEYMAN INSURANCE BETWEEN THE NORMAL BASIS ACTI VITY AND SPECULATION ACTIVITY. WITH RESPECT TO GROUND NO 3, THE ASSESSEE HAS CONTENDED THAT IN VIEW OF JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF DLF COMMERCIAL DEVE LOPERS LIMITED (ITA NO.94 OF 2013), THE INCOME FROM TRADIN G OF FUTURES AND OPTIONS SHOULD BE TREATED AS SPECULATIO N INCOME. IT WAS REQUESTED BY THE LD COUNSEL THAT AS PER CORR ECT POSITION OF LAW, THE AO SHOULD BE DIRECTED TO TREAT INCOME F ROM FUTURE AND OPTIONS AS INCOME FROM SPECULATIVE ACTIVITY. 7.5. IT IS NOTED THAT SINCE THESE GROUNDS WERE NOT RA ISED BEFORE THE LOWER AUTHORITIES, THEREFORE, APPLICATIO N OF MIND HAS NOT BEEN DONE UPON THEIR ADJUDICATION, EITHER BY AO OR BY LD. CIT(A). THEREFORE, FOR THE PURPOSE OF PROPER EXAMIN ATION OF THESE GROUNDS, BOTH ON FACTS AND LEGAL CLAIMS MADE BY THE ASSESSEE, WE FIND IT APPROPRIATE TO SEND BOTH OF TH ESE GROUNDS BACK TO THE FILE OF THE AO FOR ADJUDICATION OF THE SAME AFTER GIVING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSES SEE. THEREFORE, GROUNDS NO.2 AND 3 ARE ALLOWED FOR STATI STICAL PURPOSES. VISARIA SECURITIES P. LTD 6 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER 2015. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ' # / JUDICIAL MEMBER $ # / ACCOUNTANT MEMBER ! %' MUMBAI; & DATED : 30/09/2015 CTX? P.S/. .. ! %'&'( )(*& / COPY OF THE ORDER FORWARDED TO : 1. ()* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. - - ! . ( ( ) / THE CIT, MUMBAI. 4. - - ! . / CIT(A)- , MUMBAI 5. 12 +3 , - ($ 3 4 , ! %' / DR, ITAT, MUMBAI 6. 5 ' / GUARD FILE. ! / BY ORDER, ,1( + //TRUE COPY// +/, - (DY./ASSTT. REGISTRAR) , ! %' / ITAT, MUMBAI