PAVAK SECURITIES P. LTD, MUMBAI V. ITO 4(2)(3), MUMBAI

ITA 593/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8369 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 09-02-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 25-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P N DEVDASAN
• Assessee Lawyers: SANJAY R PARIKH
• Keywords: Opportunity of being heard; Retrospective amendment; Speculation loss
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI. BEFORE SHRI R.V.EASWAR, PRESIDENT AND SHRI R.K.PANDA, ACCOUNTANT MEMBER I.T.A. NO.593/MUM/2010 (ASSESSMENT YEAR : 2006-07) M/S. PAVAK SECURITIES P.LTD. 202, STOCK EXCHANGE TOWERS, P.J.TOWER, DALAL STREET, MUMBAI-400 001. PAN:AABCP4399M VS. THE INCOME TAX OFFICER, 4(2)(3), 647, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. SANJAY R.PARIKH, AR RESPONDENT BY : MR. P.N.DEVDASAN, DR O R D E R PER R.V.EASWAR, PRESIDENT: THIS APPEAL BY THE ASSESSEE RELATES TO THE ASSESSMENT YEAR 2006-07 AND ARISES OUT OF TH E ASSESSMENT ORDER DATED 30.12.2008 PASSED UNDER SECT ION 143(3) OF THE INCOME TAX ACT. THE ASSESSEE IS A PRI VATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF STOCK BROKING. 2. THE FIRST GROUND IS THAT THE CIT(A) OUGH T NOT TO HAVE UPHELD THE DISALLOWANCE OF RS.1,85,995/- MADE UNDER SECTION 14A READ WITH RULE 8D OF THE INCOME TAX RULES IN RE SPECT OF DIVIDEND INCOME OF RS.1,24,388/-. THIS ISSUE NOW ST ANDS COVERED BY THE RECENT JUDGEMENT OF THE HONBLE BOMB AY HIGH COURT IN THE CASE OF GODREJ & BOYCE MANUFACTURING C O. LTD. VS. DCIT., (2010) 234 CTR 1. IN THIS JUDGEMENT IT HAS B EEN HELD THAT RULE 8D DOES NOT HAVE RETROSPECTIVE EFFECT AND APPLIES ONLY FROM THE ASSESSMENT YEAR 2008-09 AND THE PRESENT CA SE RELATING TO THE ASSESSMENT YEAR 2006-07 CANNOT BE GOVERNED B Y THE AFORESAID RULE. FURTHER THE HONBLE HIGH COURT HAS LAID DOWN SEVERAL GUIDELINES RELATING TO APPLICABILITY OF SEC TION 14A OF THE ACT. RESPECTFULLY FOLLOWING THE JUDGEMENT, WE SET A SIDE THE ORDERS OF THE INCOME TAX AUTHORITIES WITH REFERENCE TO THIS ITA NO.593/MUM/10 2 GROUND AND RESTORE THE MATTER TO THE FILE OF THE AS SESSING OFFICER WHO SHALL TAKE A FRESH DECISION AS TO THE APPLICABI LITY OF SECTION 14A DE HORSE THE RULE 8D AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD ACCORDINGLY AN D ALLOW THE ASSESSEES GROUND FOR STATISTICAL PURPOSES. 2. THE SECOND GROUND IS THAT THE CIT(A) ERRED I N NOT ACCEPTING THE SHORT TERM AND LONG TERM CAPITAL GAINS SHOWN UN DER THE HEAD SPECULATION INCOME AND ALSO ERRED IN NOT ALL OWING THE BROUGHT FORWARD SPECULATION LOSS OF RS.1,93,75,693/ - ARISING OUT OF THE EARLIER YEARS. AT THE TIME OF HEARING, T HIS GROUND WAS NOT PRESSED AND IS ACCORDINGLY DISMISSED AS SUCH. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF FEBRUARY, 2011. SD/- ( R.K. PANDA ) SD/- ( R.V.EASWAR ) ACCOUNTANT MEMBER PRESIDENT MUMBAI, DATED 18 TH FEBRUARY, 2011. SOMU COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-4, MUMBAI. 4. THE CIT(A)-8, MUMBAI 5. THE DR C BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR, I.T.A.T, MUMBAI