BAYER MATERIAL SCIENCE P.LTD ( FORMELRY BAYER INDUSTRIES P.LTD, MUMBAI V. ACIT RG 10(3), MUMBAI

ITA 5554/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71177 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-03-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 27-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: MAYUR KISANADWALA
• Keywords: Capital asset
• Section: 143(3); 154

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B B ENCH, MUMBAI . . , !'#$ , % &' BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI N.K. BILLAIYA, AM ./ I.T.A. NO.5554/MUM/2011 ( ( ( ( ( / ASSESSMENT YEAR : 2003-04 M/S. BAYER MATERIAL SCIENCE PVT. LTD., (FORMERLY BAYER INDUSTRIES PVT. LTD.) BAYER HOUSE, CENTRAL AVENUE, HIRANANDANI GARDENS, POWAI, MUMBAI-400 076 THE ACIT, RANGE 10(3), AAYAKAR BHAVAN, MUMBAI-400 020 ') % ./ *+ ./PAN/GIR NO. : AAACB 2419H ( ), /APPELLANT ) .. ( -.), / RESPONDENT ) ), / / APPELLANT BY : ` SHRI MAYUR KISANADWALA -.), 0 / /RESPONDENT BY : SHRI SURENDRA KUMAR 0 12% / DATE OF HEARING : 18.09.2013 34( 0 12% / DATE OF PRONOUNCEMENT : 18.09.2013 &5 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST T HE ORDER OF THE LD. CIT(A)-22, MUMBAI DT.16.8.2010 PERTAINING TO A. Y. 2003-04. 2. THE APPEAL IS LATE BY 243 DAYS. THE ASSESSEE HA S FILED AN AFFIDAVIT JUSTIFYING THE DELAY IN FILING THE APPEAL. A PERUS AL OF THE AFFIDAVIT FILED BY THE ASSESSEE SHOWS THAT THE ASSESSEE ENTRUSTED THE INCOME TAX MATTERS TO ONE OF ITS EMPLOYEES SHRI DILIP KANOJIA. THE SAID EMPLOYEE OF THE ITA NO.5554/M/2011 2 ASSESSEE RESIGNED FROM THE EMPLOYMENT OF THE COMPAN Y AND LEFT THE SERVICES OF THE COMPANY WITHOUT PROPER NOTICE. IT IS STATED THAT THE COMPANY DID NOT EVEN ISSUE RELIEVING LETTER TO THE SAID EMPLOYEE. THE FIRST APPELLATE ORDER WAS IN POSSESSION OF THE SAID EMPLOYEE. IT IS FURTHER STATED THAT WHILE REVIEWING THE TAX STATUS OF THE V ARIOUS YEAR OF THE COMPANY ON 20 TH JULY, 2011, THE SENIOR MANAGER, TAXATION NOTICED T HAT APPEAL AGAINST THE APPELLATE ORDER DT. 16 TH AUGUST, 2010 REMAINED TO BE FILED. THE ASSESSEE IMMEDIATELY TOOK STEPS TO FILE THE APPEAL BEFORE THE TRIBUNAL. IT IS THE SAY OF THE LD. COUNSEL THAT TH E ASSESSEE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE FOR NOT FILING T HE APPEAL ON TIME. 3. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. COUNSEL AND THE CONTENTS OF THE AFFIDAVIT. IN OUR CONSIDER ATE VIEW, THE ASSESSEE DESERVES A CHANCE TO DEFEND ITS CASE, THEREFORE DEL AY IS CONDONED AND THE APPEAL IS ADMITTED. 4. A PERUSAL OF THE ORDER OF THE LD. CIT(A) SHOWS T HAT IN THIS CASE ORDER U/S. 143(3) R.W.S. 147 OF THE ACT WAS PASSED ON 31.10.2008 IN WHICH IT WAS HELD THAT THE TRANSACTION WAS NOT SLUMP SAL E BUT CONSIDER IT U/S. 2(47) OF THE ACT AND THE CAPITAL GAIN OF RS. 3,28, 81,141/- HAS BEEN COMPUTED AND AO TAXED THE SAME AT THE RATE OF 20% I NSTEAD OF 35%. THE AO RECTIFIED ORIGINAL ASSESSMENT ORDER PASSED U/S. 154 OF THE ACT ON 25.10.2010. HOWEVER, IT IS SEEN FROM THE RECORD TH AT THE ORDER U/S. 143(3) TRAVELLED UPTO TRIBUNAL IN ITA NO. 6666 & 6667/M/09 IN WHICH THE TRIBUNAL HAS GIVEN A FINDING AT PARA-38 OF ITS ORDE R ON PAGE-33 AS UNDER: NOW THE QUESTION ARISES AS TO WHETHER ANY PROFIT O R LOSS FROM THE TRANSFER OF STOCK IN TRADE CAN BE CONSIDER ED UNDER THE HEAD `CAPITAL GAINS. THERE IS HARDLY ANY NEED TO W ANDER HERE AND THERE IN SEARCH OF REPLY TO THIS QUESTION. THE ANSW ER IS SELF EVIDENT. SECTION 45, THE SUBSTANTIVE PROVISION OF THE INCOME UNDER THE HEAD `CAPITAL GAINS, UNEQUIVOCALLY PROVIDES THROUGH SUB -SECTION (1) ITA NO.5554/M/2011 3 THAT : ANY PROFITS OR GAINS ARISING FROM THE TRANS FER OF A CAPITAL ASSET EFFECTED IN THE PREVIOUS YEAR SHALL, SAVE AS OTHERWISE PROVIDED IN SECTIONS , BE CHARGEABLE TO INCOME-TA X UNDER THE HEAD `CAPITAL GAINS, AND SHALL BE DEEMED TO BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. TH US IT IS MANIFEST THAT PROFIT OR GAIN CHARGEABLE UNDER THE CHAPTER IV -E CAN ARISE ONLY ON THE TRANSFER OF CAPITAL ASSET. SECTION 2(14 ) DEFINES `CAPITAL ASSET TO MEAN : PROPERTY OF ANY KIND HELD BY AN A SSESSEE, WHETHER OR NOT CONNECTED WITH HIS BUSINESS OR PROFESSION, B UT DOES NOT INCLUDE (I) ANY STOCK-IN-TRADE, CONSUMABLE STORES OR RAW MATERIALS HELD FOR THE PURPOSES OF HIS BUSINESS OR PROFESSION ... WHEN WE CONSIDER THE PROVISIONS OF SECTION 45 IN JU XTAPOSITION TO SECTION 2(14), IT BECOMES ABUNDANTLY CLEAR THAT STO CK IN TRADE IS NOT A `CAPITAL ASSET. RESULTANTLY, NO PROFIT OR GAIN F ROM THE TRANSFER OF STOCK CAN BE CHARGED TO TAX UNDER THE HEAD `CAPITAL GAINS. THE VIEW CANVASSED BY THE LOWER AUTHORITIES ON THIS ISS UE, IS THEREFORE, SET ASIDE. WE SUM UP OUR CONCLUSION THAT THE LOSS FROM THE TRA NSFER OF STOCK AMOUNTING TO RS.2.10 CRORE IS DEDUCTIBLE UNDER THE HEAD `PROFITS AND GAINS OF BUSINESS OR PROFESSION IN RELATION TO THE A.Y. 2003- 04. 5. AS THE ISSUE IS NOW DECIDED BY THE TRIBUNAL VID E ITA NOS. 6666 & 6667/M/09, APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) PURSUANT TO THE ORDER U/S. 154 BECOMES OTIOS E AND ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/9/2013 . &5 0 4( % 6 7&81 8.9.2013 4 0 : SD/- SD/- (H.L. KARWA ) (N.K . BILLAIYA ) /PRESIDENT % &' / ACCOUNTANT MEMBER MUMBAI; 7& DATED 18/09/2013 . . ./ RJ , SR. PS ITA NO.5554/M/2011 4 &5 0 -1! &5 0 -1! &5 0 -1! &5 0 -1! ;!(1 ;!(1 ;!(1 ;!(1 / COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. < ( ) / THE CIT(A)- 4. < / CIT 5. !=: -1 , , / DR, ITAT, MUMBAI 6. :> ? / GUARD FILE. &5 &5 &5 &5 / BY ORDER, .!1 -1 //TRUE COPY// @ @@ @ / A * A * A * A * (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI