GSB FINANCE LTD, MUMBAI V. DCIT 2(1), MUMBAI

ITA 5894/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3506 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 10-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 23-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K SINHA
• Section: 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH, MUMBAI , BEFORE SHRI R.K.GUPTA, JM & SHRI N.K.BILLAIYA , AM ITA NO. 5894 / MUM/ 20 1 1 ( ASSESSMENT YEAR : 2008 - 09 ) M/S GSB FINANCE LTD., 815, 8 TH FLOOR, STOCK EXCHANGE TOWER, DALAL STREET, MUMBAI - 400 023 VS. DCIT RANGE - 2(1) , MUMBAI - 20 PAN/GIR NO. : A A CC G 0914 E ( APPEL LANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR.AJAY SINGH /REVENUE BY : MR. D.K.SINHA DATE OF HEARING : 1 2 TH JUNE, 201 3 DATE OF PRONOUNCEMENT : 19 TH JUNE, 2013 O R D E R PER SHRI R.K.GUPTA, JM : TH IS APPEAL HA S BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 1 - 6 - 2011 PASSED BY THE LEANED CIT(A) - 4 , MUMBAI RELATING TO THE ASSESSMENT YEAR 2008 - 09. 2 . IN G ROUNDS NO. 1 TO 3, THE ASSESSEE HAS CHALLENGED IN CONFIRMING T HE DISALLOWANCE OF RS. 17,30,175/ - MADE BY THE AO UNDER SECTION 14A READ WITH RULE 8D OF THE IT RULES . THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUND THAT LEARNED CIT(A) AND THE AO ERRED IN APPLYING THE FORMULA LAID DOWN IN RULE 8D TO THE SHARES HELD AS ST OCK IN TRADE WITHOUT APPRECIATING THAT THE FORMULA UNDER RULE 8D IS APPLICABLE TO INVESTMENTS AND NOT STOCK IN TRADE. ITA NO . 5894/2011 2 3 . LEARNED COUNSEL OF THE ASSESSEE STATED THAT IN PLACE OF GROUNDS NO. 1 TO 3, THE ADDITIONAL GROUND FILED BY THE ASSESSEE SHOULD BE TAKEN INTO CONSIDERATION. 4 . SINCE, THE ADDITIONAL GROUND IS A LEGAL GROUND, THEREFORE, THE ADDITIONAL GROUND IS TAKEN FOR CONSIDERATION. 5 . ON MERIT, IT WAS SUBMITTED THAT UNDISPUTEDLY THE ASSESSEE HAS HELD THE SHARES UNDER STOCK IN TRADE, THEREFORE, PROV ISION OF SECTION 14A IS NOT APPLICABLE AS HELD BY THE TRIBUNAL IN THE CASE OF M/S PRESCIENT SECURITIES PVT. LTD., DECIDED IN ITA NO. 5281/M/2011 FOR ASSESSMENT YEAR 2008 - 09 VIDE ORDER DATED 21 - 11 - 2012 , COPY OF THE SAME IS PLACED ON RECORD . 6 . ON THE OTHER HAND, LEARNED DR PLACED RELIANCE ON THE ORDER OF THE CIT(A). 7 . AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, WE FOUND THAT THE ASSESSEE DESERVE TO SUCCEED ON THE ISSUE INVOLVED. IT IS SETTLED POSITION IN LAW THAT WHERE THE SHARES ARE HELD IN STOCK - IN - TRADE THEN PROVISIONS OF SECTION 14A ARE NOT APPLICABLE AS HELD BY VARIOUS COURTS AND THE BENCHES OF THE TRIBUNAL. SIMILAR ISSUE CAME BEFORE THE TRIBUNAL IN CASE OF M/S PRESCIENT SECURITIES PVT. LTD (SUPRA) AND IT WAS HELD THAT IF THE SHARES ARE HELD IN STOCK - IN - TRADE, THEN PROVISION OF SECTION 14A ARE NOT APPLICABLE. WHILE HOLDING SO, THE DECISION OF VARIOUS COURTS AND BENCHES HAVE BEEN TAKEN INTO CONSIDERATION BY THE TRIBUNAL, WHICH ARE MENTIONED AT PAGES 3 TO 5 OF ITS ORDER. ITA NO . 5894/2011 3 8 . IN VI EW OF THE AFORESAID FACTS AND CIRCUMSTANCES, WE DIRECT THE AO NOT TO APPLY THE PROVISION OF SECTION 14A AFTER VERIFYING THAT SHARES ARE HELD AS STOCK - IN - TRADE. WE ORDER ACCORDINGLY. 9 . GROUNDS NO. 4 & 5 WERE NOT PRESSED, THEREFORE, THEY ARE DISMISSED AS NO T PRESSED. 10 . GROUND NO. 6 RELATES TO UPHOLDING THE ACTION OF THE AO IN MAKING ADDITION TO BOOK PROFIT UNDER SECTION 115JB OF THE ACT. 11 . IT WAS STATED THAT NORMAL COMPUTATION OF THE ASSESSEE WAS MORE THAN THE BOOK PROFIT COMPUTABLE UNDER SECTION 115JB OF THE ACT, THEREFORE, THIS GROUND IS INFRUCTUOUS IN NATURE. 1 2 . IT WAS FURTHER STATED THAT THIS GROUND WAS JUST TAKEN FOR ABANDONED PRECAUTION THAT THE AO SHOULD NOT LEVY THE PENALTY UND E R SECTION 271(1)(C), OTHERWISE THE GROUND IS INFRUCTUOUS IN NATURE. 1 3 . IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE GROUND OF THE ASSESSEE IS INFRUCTUSOUS IN NATURE AS ACCEPTED BY THE LEARNED AR. 1 4 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF JUN . 2013 . SD/ - ( ) ( N.K.BILLAIYA ) SD/ - ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 19/06 /2013 . /PKM , PS ITA NO . 5894/2011 4 COPY OF THE ORDER FORWARDED T O : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI