JCIT(OSD), Circle-4, Kolkata, Kolkata V. M/S Khazana Trade link Ltd., Kolkata

ITA 526/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83037 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Speculation loss

Judgement Text

I.T.A. NO. 526/KOL./2012 & C.O. NO. 90/KOL/2013(IN ITA 526/KOL/2012) ASSESSMENT YEAR: 2002-2003 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 526/KOL. / 2012 ASSESSMENT YEAR : 2002-2003 JOINT COMMISSIONER OF INCOME TAX (OSD),...... ....APPELLANT CIRCLE-4, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 -VS.- M/S. KHAZANA TRADE LINK LTD.....................,.. ................RESPONDENT 18, BRITISH INDIA STREET, 3 RD FLOOR, ROOM NO. 302, KOLKATA-700 069 [PAN : AABCK 2127 L] & C.O. NO. 90/KOL./2013 (ARISING OUT OF I.T.A. NO. 526/KOL/2012) ASSESSMENT YEAR : 2002-2003 M/S. KHAZANA TRADE LINK LTD.,........................... ...................CROSS OBJECTOR 18, BRITISH INDIA STREET, 3 RD FLOOR, ROOM NO. 302, KOLKATA-700 069 -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,....... ...APPELLANT CIRCLE-4, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI DAVID Z. CHAWNGTHU, ADDL. CIT, SR. D.R., FOR T HE DEPARTMENT SHRI S.M. SURANA, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : AUGUST 08, 2014 DATE OF PRONOUNCING THE ORDER : AUGUST 12, 2014 O R D E R PER GEORGE MATHAN: ITA 526/KOL/2012 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-I V, KOLKATA IN APPEAL I.T.A. NO. 526/KOL./2012 & C.O. NO. 90/KOL/2013(IN ITA 526/KOL/2012) ASSESSMENT YEAR: 2002-2003 PAGE 2 OF 4 NO. 125/CIT(A)-IV/08-09 DATED 28.12.2011 FOR THE AS SESSMENT YEAR 2002- 03. 2. C.O. 90/KOL./2013 IS A CROSS OBJECTION FILED BY THE ASSESSEE IN REVENUES APPEAL IN ITA NO. 526/KOL/2012. 3. SHRI DAVID Z. CHAWNGTHU, ADDL. CIT, SR. D.R., RE PRESENTED ON BEHALF OF THE REVENUE AND SHRI S.M. SURANA, ADVOCATE, REPR ESENTED ON BEHALF OF THE ASSESSEE. 4. AT THE TIME OF HEARING, LD. A.R. ON BEHALF OF TH E ASSESSEE SUBMITTED THAT HE DID NOT WISH TO PRESS THE CROSS OBJECTION F ILED BY THE ASSESSEE. CONSEQUENTLY THE CROSS OBJECTION FILED BY THE ASSES SEE STANDS DISMISSED AS WITHDRAWN. 5. IN CONNECTION WITH THE REVENUES APPEAL, LD. ADD L. CIT, SR. D.R. SUBMITTED THAT THE ISSUE WAS AGAINST THE ACTION OF THE LD. CIT(APPEALS) IN DIRECTING THE ASSESSING OFFICER TO TREAT THE SHARES SPECULATION LOSS AS BUSINESS LOSS. IT WAS THE SUBMISSION THAT THE LD. C IT(APPEALS) HAD HELD THAT THE ASSESSEE WAS HELD BY THE LD. CIT(APPEALS) TO BE A NBFC HAVING ITS PRINCIPAL BUSINESS CONSISTING OF GRANTING LOANS AND ADVANCES. IT WAS THE SUBMISSION THAT CONSEQUENTLY THE LD. CIT(APPEALS) H AD HELD THAT THE ASSESSEES CASE FALLS UNDER THE EXCEPTION 2 PROVIDE D UNDER THE EXPLANATION TO SECTION 73. LD. SR. D.R. SUPPORTED T HE ORDER OF THE ASSESSING OFFICER. 6. IN REPLY, IT WAS THE SUBMISSION BY THE LD. A.R. ON BEHALF OF THE ASSESSEE THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 2278/KOL/2010 FOR THE ASSESSMENT YEAR 2004-05 VIDE ORDER DATED 29.06.2012, WHEREIN THE COORDINATE BENCH OF THIS TR IBUNAL HAS HELD THAT THE ASSESSEE IS A COMPANY REGISTERED AS NBFC AND IS ENGAGED IN THE I.T.A. NO. 526/KOL./2012 & C.O. NO. 90/KOL/2013(IN ITA 526/KOL/2012) ASSESSMENT YEAR: 2002-2003 PAGE 3 OF 4 BUSINESS OF LOANS AND ADVANCES ALONGWITH TRADING OF SHARES. IT WAS THE SUBMISSION THAT THE PRINCIPAL BUSINESS OF THE ASSES SEE BEING GRANTING OF LOANS AND ADVANCES AS HAS BEEN HELD BY THE COORDINA TE BENCH OF THIS TRIBUNAL WHICH IT WAS SUBMITTED HAD BECOME FINAL AN D ALSO ON ACCOUNT OF THE FACT THAT THE REVENUE HAS NOT RAISED ANY GROUND AGAINST THE ACTION OF THE LD. CIT(APPEALS) IN HOLDING THAT THE ASSESSEES PRINCIPAL BUSINESS CONSISTED OF GRANTING LOANS AND ADVANCES, THE EXCEP TION 2 PROVIDED UNDER EXPLANATION APPLIED TO THE ASSESSEES CASE AND THE EXPLANATION TO SECTION 73 OF THE ACT HAD BEEN RIGHTLY HELD TO BE NOT APPLI CABLE TO THE ASSESSEE. HE VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(AP PEALS). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ORDER OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESS EES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 REFERRED TO SUPRA SHOWS THA T THE COORDINATE BENCH OF THIS TRIBUNAL HAS CATEGORICALLY HELD THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MAKING LOANS AND ADVANCES AND IS A COMPANY REGISTERED AS A NBFC. A PERUSAL OF THE ORDER OF LD. CIT(APPEALS) CLEARLY SHOWS THAT THE LD. CIT(APPEALS) HAS CATEGORICALLY H ELD THAT THE PRINCIPAL BUSINESS OF THE ASSESSEE CONSISTED OF GRANTING LOAN S AND ADVANCES. IT WAS ALSO NOTICED THAT THE LD. CIT(APPEALS) HAS CONSIDER ED THE DEPLOYMENT OF THE MAJOR PORTION OF THE ASSESSEES FUNDS IN ITS VA RIOUS ACTIVITIES OF LOANS AND ADVANCES AND HAS CONSEQUENTLY HELD THAT EXCEPTI ON 2 IN THE EXPLANATION TO SECTION 73 CAME INTO PLAY AND CONSEQ UENTLY THE EXPLANATION TO SECTION 73 IS NOT APPLICABLE TO THE ASSESSEES CASE. A PERUSAL OF THE GROUNDS OF APPEAL AS RAISED BY THE R EVENUE SHOWS THAT THE REVENUE HAS NOT CHALLENGED THE FINDING GIVEN BY THE LD. CIT(APPEALS) THAT THE PRINCIPAL BUSINESS CONSISTS IN GRANTING LOANS A ND ADVANCES AND THE DEPLOYMENT OF THE MAJOR PORTION OF THE ASSESSEES F UNDS IN ITS ACTIVITIES OF LOANS AND ADVANCES. AS THESE FINDINGS OF THE LD. CI T(APPEALS) STAND UN- REBUTTED, ADMITTEDLY THE EXCEPTION 2 LAID DOWN IN E XPLANATION TO SECTION 73 COMES INTO PLAY AND THE EXPLANATION TO SECTION 7 3 WOULD NOT BE I.T.A. NO. 526/KOL./2012 & C.O. NO. 90/KOL/2013(IN ITA 526/KOL/2012) ASSESSMENT YEAR: 2002-2003 PAGE 4 OF 4 APPLICABLE TO THE ASSESSEES CASE AS HAS BEEN RIGHT LY HELD BY THE LD. CIT(APPEALS). 8. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE AND CRO SS OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH AUGUST, 2014. SD/- SD/- SHAMIM YAHYA GEORGE MATHAN (ACCOUNTANT MEMBER) (JU DICIAL MEMBER) KOLKATA, THE 12 TH DAY OF AUGUST, 2014 COPIES TO : (1) JOINT/ASSISTANT COMMISSIONER OF INCOME TAX (OSD), CIRCLE-4, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (2) M/S. KHAZANA TRADE LINK LTD. 18, BRITISH INDIA STREET, 3 RD FLOOR, ROOM NO. 302, KOLKATA-700 069 (3) COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.