D.C.I.T. 3(2), MUMBAI V. OAK HOLDINGS PVT. LTD., MUMBAI

ITA 5968/MUM/2012

• Counselvise Citation: 596819914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 01-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV JAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI . . , ! ' #'' '$ , % ! & BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : 5968 / / 2012 A.Y. 2008-2009 ITA NO. : 5968/MUM/2012 (ASSESSMENT YEAR: 2008-2009) DCIT - 3(2), R. NO. 674, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI -400 020 VS M/S OAK HOLDINGS PVT. LTD., 14 TH FLOOR, EXPRESS-TOWER, NARIMAN POINT, MUMBAI -400 021 PAN: AAACO 9052 F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJEEV JAIN RESPONDENT BY : NONE /DATE OF HEARING : 28-11-2013 / DATE OF PRONOUNCEMENT : 06-12-2013 THE APPEAL IS FILED BY THE DEPARTMENT AGAINST THE O RDER OF CIT(A) 4, MUMBAI, DATED 03.07.2012, WHEREIN THE FOLLOWING GRO UNDS HAVE BEEN RAISED: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF MARKET TO MARKET OF RS. 29,08,000/- IN TRADING OF DERIVATIVE S. 2. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. THE SOLITARY ISSUE INVOLVED IS IN RESPECT OF RE CEIVING THE DISALLOWANCE OF RS. 29,08,000/- MADE BY THE AO ON MARK TO MARKET TR ADING ON DERIVATIVES. 3. WHEN THE CASE WAS CALLED FOR HEARING, NONE APPE ARED ON BEHALF OF THE ASSESSEE NEITHER THERE WAS ANY PRAYER FOR ADJOURNME NT. BUT THE DR POINTED OUT THAT THE ISSUE INVOLVED HAS BEEN HELD TO BE AGAINST THE DEPARTMENT AND HAS BEEN EXHAUSTIVELY DEALT WITH BY THE CIT(A), WHEREIN HE HAS RELIED ON THE DECISIONS OF: EDEIWEIRS CAPITAL LTD. VS ITO IN ITA NO. 5324/MUM/2007 M/S OAK HOLDINGS PVT. LTD. ITA NO. 5968/MUM/2012 2 MASHRAQ BANK VS DCIT, REPORTED I N 18 SOT 233 (MUM) CIT VS WOODWORD GOVERNOR (INDIA) PVT. LTD., REPORTED IN 312 ITR 254 (SC) 4. HE FURTHER POINTED OUT THAT VERY RECENTLY COORD INATE BENCH AT MUMBAI IN THE CASE OF DCIT VS. KOTAK MAHINDRA INVESTMENT LTD. ITA NO. 1502/MUM/2012, WHEREIN IT HAS BEEN HELD (HEAD NOTES) SECTION 28(I), OF THE INCOME-TAX ACT, 1961 BUSIN ESS LOSS ALLOWABLE AS [SHARE TRANSACTIONS] ASSESSMENT YEAR 2008-09 ASSESSEE COMPANY WAS ENGAGED IN BUSINESS OF TRADING IN DERIVATIVE SEGMENT BY ENTERI NG INTO FUTURE AND OPTION CONTRACTS SOME FUTURE CONTRACTS COULD NOT BE SQUA RED UP AT END OF FINANCIAL YEAR AND ASSESSEE BOOKED EXPECTED LOSS IN SUCH CONTRACTS ON MARK TO MARKET BASIS ANY LIKELY PROFIT WAS IGNORED WHETHER WHERE DERIV ATIVES ARE HELD AS STOCK-IN- TRADE, WHATEVER RULES APPLY TO STOCK-IN-TRADE, WOUL D BE APPLIED TO THEIR VALUATION ALSO HELD, YES WHETHER ASSESSEE HAD RIGHTLY CLA IMED MARK TO MARKET LOSS ON SUCH DERIVATIVES HELD, YES [PARA 3] [IN FAVOUR OF ASSESSEE] 5. ON HEARING THE DR WHO HAD VERY FAIRLY ACCEPTED THAT THE ISSUE RAISED, IS AGAINST THE DEPARTMENT, WE DECIDED TO PROCEED WITH THE CASE EX PARTE IN ABSENCE OF THE ASSESSEE OR ITS REPRESENTATIVE. 6. SINCE THE DR HAS ACCEPTED THE ISSUE TO BE AGAIN ST THE DEPARTMENT. RESPECTFULLY FOLLOWING THE CASE REFERRED TO BY THE CIT(A) & ON GOING THROUGH THE EXHAUSTIVE ORDER OF THE CIT(A) ON THE IMPUGNED ISSU E, WE DO NOT FIND ANY REASON TO DEVIATE FROM THE ORDER OF THE CIT(A). 7. THE APPEAL FILED BY THE DEPARTMENT IS THEREFORE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH DECEMBER, 2013. SD/- SD/- ( . . ) ( #'' '$ ) ! ! (P.M. JAGTAP) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 6 TH DECEMBER, 2013 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) ! !' ( ) - 4 MUMBAI / THE CIT (A)-4, MUMBAI. M/S OAK HOLDINGS PVT. LTD. ITA NO. 5968/MUM/2012 3 4) ! !' 3, MUMBAI / THE CIT-3, MUMBAI, 5) $%& ' , ! ' , ()* / THE D.R. C BENCH, MUMBAI. 6) &+ , COPY TO GUARD FILE. !-./ / BY ORDER / / TRUE COPY / / [ 0 / 1 )2 ! ' , ()* DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *451 . . * CHAVAN, SR. PS