Jamnalal Sons Private Limited, Wardha V. Dy.Comm.of Income-Tax-(Assessment) Range, Nagpur

ITA 5/NAG/1993

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1911 (ITAT-NAGPUR)
• Duration Of Justice: 20 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-12-2012
• Assessment Year: misc
• Appeal Filed On: 01-01-1993
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D P T IWARI
• Assessee Lawyers: M A GOHEL
• Keywords: Capital asset
• Section: 143(3); 6

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M ITA NO. 05 / N AG / 1993 ( ASSESSMENT YEAR : 1982 - 83 ) M/S JAMNALAL SONS PRIVATE LIMITED, BACCHRAJ BHAWAN, GANDHI CHOWK, WARDHA VS. DCIT(ASSESSMENT), RANGE - NAGPUR (MS) PAN/GIR NO. : 41 - 003 - CQ - 6632 ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. M.A.GOHEL /REVENUE BY : MR. D.P.TIWARI DATE OF HEARING : 2 8 TH JAN ., 201 3 DATE OF PRONOUNCEMENT : 1 ST FEB ,201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH E ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST THE ORDER OF LEANED CIT (A) , NAGPUR (MAHARASHTRA) RELATING TO THE ASSESSMENT YEAR 1982 - 83 , WHICH HAS BEEN HEARD THROUGH E - COURT, MUMBAI . 2 . THE ASSESSEE IS OBJECTING FOR REJECTION OF CLAIM FOR CONVERSION OF CAPITAL ASSET INTO STOCK - IN - TRADE. ITA NO . 5 / 1993 2 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A LIMITED COMPANY. THE ORIGINAL ASSESSMENT WAS COMPLETED ON 14 - 11 - 1985, WHICH WAS REOPENED UNDER SECTION 147(A) OF THE ACT FOR CONSIDERING CERTAIN EXCESS CLAIM ALLOWED IN THE SAME. THE AO WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 CHARGED INTEREST UNDER SECTION 139A AND ALSO ASSESSED AN AMOUNT OF R S. 29,43,710/ - ON ACCOUNT OF CAPITAL GAIN. THE ISSUE IN RESPECT OF CAPITAL GAIN WAS DISCUSSED IN ORIGINAL ORDER ALSO. IN FACT, THE ASSESSEE HAD CAPITAL ASSET IN SHAPE OF SHARES OF M/S BAJAJ AUTO LIMITED AND M/S BAJAJ TEMPO LIMITED AND THE SAME WERE CONVERTE D INTO STOCK - IN - TRADE AT THE PREVAILING MARKET PRICE AND TRANSFERRING THE SAME AS CONTRIBUTION OF CAPITAL TO THE FIRMS, M/S BAJAJ TRADING COMPANY, M/S ANAND TRADING COMPANY AND M/S KUSHAGRE TRADING COMPANY ETC. WHILE HOLDING CAPITAL ASSET INSTEAD OF STOCK - IN - TRADE, THE AO BESIDES ANALYZING THE SURROUNDING FACTS AND CIRCUMSTANCES IN DETAIL, RELIED ON THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE CIT(A) IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1980 - 81. 4. THE ASSESSEE PREFERRED APPEAL BEFORE TH E LEARNED CIT(A) CHALLENGING THE INTEREST CHARGED UNDER SECTION 139(A) AND ASSESSING CAPITAL GAIN AT RS. 29,43,710/ - . DETAIL SUBMISSIONS WERE FILED BEFORE THE CIT(A) . RELIANCE WAS ALSO PLACED ON VARIOUS CASE LAWS. IT WAS SUBMITTED THAT THOUGH THE ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE BY THE TRIBUNAL FOR THE ASSESSMENT YEAR 1980 - 81 , HOWEVER, THE ORDER OF THE TRIBUNAL WAS NOT JUSTIFIED AS THE TRIBUNAL WAS ITA NO . 5 / 1993 3 INFLUENCED BY THE FACT THAT THE ASSESSEE COMPANY HAD CONVERTED CERTAIN FIXED ASSETS THAT IS LAND AN D PROPERTY STANDING THEREON INTO STOCK - IN - TRADE. IT WAS SUBMITTED THAT DURING THE ACCOUNTING YEAR, NOW UNDER THE DISPUTE, THERE WAS NO SUCH CONVERSION OR TRANSFER OF FIXED ASSETS AND HENCE THE TRIBUNALS DECISION IN THE EARLIER YEAR WOULD NOT APPLY TO THE FACTS OF THE YEAR UNDER REVIEW. AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, L EARNED CIT(A) FOUND THAT THE CASE IS ONE OF THE GROUP BELONGING TO BAJAJ FAMILY HOLDING CONTROLLING INTEREST IN THE TWO PROFIT MAKING COMPANIES I.E. M/S BAJAJ AUTO LIMITED AND M/S BAJAJ TEMPO LIMITED . THE MARKET VALUE OF THE SHARES OF THOSE COMPANIES WAS SHOWING SUBSTANTIAL APPRECIATION AT THE RELEVANT TIME. THE BOMBAY BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1980 - 81, REPORTED IN 29 ITD 45 , HAS DISCUSSED IN DETAIL THE SURROUNDING CIRCUMSTANCES IN WHICH THE ASSESSEE COMPANY WAS FORMED AND WENT ABOUT CONVERTING CAPITAL ASSETS INCLUDING SHARES IN DIFFERENT COMPANIES INTO STOCK - IN - TRADE AND SUBSEQUENTLY TRANSFERRING THE SAME BY WAY OF CAPITAL CONTRIBUTION TO VARIOUS FIRMS AS A DEVICE TO AVOID TAX ON CAPITAL GAINS. 4.1 LEARNED CIT(A) FURTHER FOUND THAT THE ARGUMENTS ADVANCED BY THE LEARNED AR THAT FACTS ARE DISTINGUISHABLE, WAS NOT FOUND CORRECT. LEARNED CIT(A) FURTHER FOUND THAT IN ANOTHER CASE BELONGING TO THE SAME GROUP OF COMPANIES, THE SPECIAL BENCH OF THE TRIBUNAL IN CASE OF ITO VS. RAMAKRISHNA BAJAJ, REPORTED IN 41 ITD 161 , HAS DECIDED THE SIMILAR ISSUE AGAINST THE ASSESSEE. THEREAFTER THE LEARNED CIT(A) ITA NO . 5 / 1993 4 INCORPORATED THE FINDI NG OF THE TRIBUNAL IN HIS ORDER AT PAGE S 5 & 6 AND FOUND THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN CASE OF THE ASSESSEE ITSELF. ACCORDINGLY, THE APPEAL WAS DECIDED AGAINST THE ASSESSEE. 5 . AGGRIEVED THEREBY, THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 6 . LEARNED COUNSEL OF THE ASSESSEE FAIRLY STATED THAT THE ISSUE IS AGAINST THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN EARLIER YEAR, HOWEVER, HE REITERATED THE ARGUMENTS ADVANCED BEFORE THE LEARNED CIT(A) . ON THE OTHE R HAND, LEARNED DR PLACED RELIANCE ON THE ORDER OF THE LEARNED CIT(A) . 7 . AFTER CONSIDERING THE ORDER OF THE AO AND CIT(A) , WE FOUND NO INFIRMITY IN THE FINDING OF THE LEARNED CIT(A) , WHO HAS DISMISSED THE APPEAL OF THE ASSESSEE FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF FOR ASSESSMENT YEAR 1980 - 81 , WHICH IS REPORTED IN 29 ITD 45 . IT IS FURTHER SEEN THAT IN ANOTHER CASE OF THE SAME GROUP, THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF RAMAKRISHNA BAJAJ (SUPRA) HAS ALSO DECIDED THE SIMILAR ISSUE AGAINST THE ASSESSEE. THEREFORE, WE SEE NO REASON TO INTERFERE IN THE FINDING OF THE LEARNED CIT(A) . ACCORDINGLY, WE CONFIRM THE ORDER OF THE LEARNED CIT(A) ON THE ISSUE INVOLVED. 5 . IN THE RESULT , APPEAL OF THE ASSESSEE IS DISMISSED . ITA NO . 5 / 1993 5 ORDER PRONOUNCED IN THE E - COURT ON THIS 1 ST DAY OF FEB , 201 3 . - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R .K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 0 1 / 0 2 / 201 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI