ACIT, Chandigarh V. M/s Punjab State Indl. Dev. Corporation Ltd., Chandigarh

ITA 619/CHANDI/2014

• Counselvise Citation: 61921514 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 11-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ MISHRA
• Assessee Lawyers: ATUL GOYAL
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NOS.618 & 619/CHD/2014 ( ASSESSMENT YEARS : 2007-08 & 2008-09) THE A.C.I.T., VS. M/S PUNJAB STATE INDL. CIRCLE 2(1), DEV. CORPORATION LTD., CHANDIGARH. UDYOG BHAWAN, SECTOR 17, CHANDIGARH. PAN: AABCP1599F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANOJ MISHRA, DR RESPONDENT BY : SHRI ATUL GOYAL DATE OF HEARING : 03.11.2015 DATE OF PRONOUNCEMENT : 17.11.2015 O R D E R PER RANO JAIN, A.M . : THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGARH EA CH DATED 31.3.2014. ITA NO.618/CHD/2014 2. THE ONLY ISSUE TO BE DECIDED IN THIS CASE IS WH ETHER THE LEARNED CIT (APPEALS) WAS RIGHT IN HOLDING THA T THE INVESTMENT IN SHARES OF COMPANIES JOINTLY PROMOTED BY THE ASSESSEE CORPORATION ALONGWITH OTHER INDUSTRIAL UND ERTAKINGS 2 IS IN THE NATURE OF INVESTMENT AND NOT STOCK IN TRA DE AND PROFIT REALIZED ON DISINVESTMENT IN THESE SHARES IS NOT BUSINESS INCOME BUT A CAPITAL GAIN. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT AS PER THE AUDITED ACCOUNTS, THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN OF RS.59,15,897/- ON ACCOUNT OF PROFITS ATTRIB UTING TO ASSESSEE FROM SALE OF VARIOUS SHARES INVESTMENTS. THESE RECEIPTS WERE IN THE FORM OF SALE OF INVESTMENT OF THE ASSESSEE IN VARIOUS SHARES AND EQUITIES. THE ASSE SSING OFFICER WAS OF THE VIEW THAT SINCE THE ASSESSEES M AIN BUSINESS IS TO PROVIDE FINANCIAL SUPPORT TO VARIOUS INDUSTRIES AND BUSINESS CONCERNS THROUGH INVESTMENTS IN EQUITY OR LOAN, THEREFORE, ANY PROFIT ACCRUING FROM SALE OF SUCH IN VESTMENT IS TO BE TREATED AS INCOME FROM BUSINESS. 4. BEFORE THE ASSESSING OFFICER, THE ASSESSEE SUBM ITTED THAT THIS ISSUE HAS ALSO ARISEN IN EARLIER YEARS. HOWEVER, REJECTING THE CONTENTION OF THE ASSESSEE THE ASSESS ING OFFICER OBSERVED THAT SINCE THE DEPARTMENT HAS TO TAKE A CO NSISTENT STAND AND TREATED THE AMOUNT OF RS.59,15,897/- AS B USINESS INCOME OF THE ASSESSEE. 5. BEFORE THE LEARNED CIT (APPEALS) ALSO, IT WAS SUBMITTED THAT SIMILAR ISSUE HAS ARISEN IN EARLIER YEARS, WHICH WAS DECIDED BY THE HON'BLE PUNJAB & HARYANA HIGH CO URT IN ASSESSMENT YEAR 1996-97 VIDE ORDER DATED 20.7.2010 IN ITA NO.565/CHD/2006. FOLLOWING THE JUDGMENT OF HON'BL E PUNJAB 3 & HARYANA HIGH COURT, THE ADDITION WAS DELETED BY T HE LEARNED CIT (APPEALS). 6. THE DEPARTMENT HAS NOW COME UP IN APPEAL AGAINS T THE SAID ACTION OF THE LEARNED CIT (APPEALS) BEFORE US. THE LEARNED D.R. RELIED UPON THE ORDER OF THE ASSESSING OFFICER, WHILE THE LEARNED COUNSEL FOR THE ASSESSEE FILED BE FORE US A COPY OF THE ORDER OF THE HON'BLE PUNJAB & HARYANA H IGH COURT IN ITR NO.20 OF 2000 DATED 30.9.2010 IN ASSESSEES OWN CASE, WHERE SIMILAR ISSUE HAS BEEN DECIDED BY THE HON'BLE HIGH COURT IN FAVOUR OF THE ASSESSEE. FURTHER, IT WAS SUBMITTED [THAT THE SLP FILED BY THE DEPARTMENT AGAINST THE S AID ORDER OF THE HON'BLE HIGH COURT BEFORE THE HON'BLE SUPREME C OURT HAS ALSO BEEN DISMISSED. 7. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIE S BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. ON P ERUSAL OF THE ORDER OF THE LEARNED CIT (APPEALS), WE DO NOT F IND ANY INFIRMITY IN THE SAID ORDER AS THE RELIEF HAS BEEN GIVEN TO THE ASSESSEE ON THE BASIS OF THE ORDER OF THE HON'BLE H IGH COURT IN ASSESSEES OWN CASE ON SIMILAR ISSUE. ON PERUS AL OF THE ORDER OF THE HON'BLE HIGH COURT, WE SEE THAT THE SA ID ISSUE HAS BEEN DECIDED BY THE HON'BLE HIGH COURT AT PAGE 14, PARA 14 IN FOLLOWING TERMS : 14. A CAPITAL INVESTMENT AND RESALE, DO NOT LOSE THEIR CAPITAL NATURE MERELY BECAUSE THE RESALE WAS FORESEEN AND CONTEMPLATED WHEN THE INVESTMENT WAS MADE AND THE POSSIBILITY 4 OF ENHANCED VALUES MOTIVATED THE INVESTMENT (SEE LEEMING V. JONES (1930) 15 TAX CASES 333 AND ALSO THE DECISIONS OF THIS COURT IN SAROJ KUMAR MAZUMDAR V. CIT, (1959) 37 ITR 242 (250-251) = AIR 1959 SC 1252, 1258- 1259 AND JANKI RAM BAHADUR RAM V. CIT (1965) 57 ITR 21 = AIR 1965 SC 1898). 8. FROM THE PERUSAL OF THE ORDER OF THE HON'BLE SUPREME COURT ALSO, IT IS CONFIRMED THAT THE SLP FI LED BY THE DEPARTMENT AGAINST THE SAID ORDER OF THE HON'BLE HI GH COURT HAS ALSO BEEN DISMISSED. SINCE THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE, RESPECTFULLY F OLLOWING THE ORDER OF THE HON'BLE HIGH COURT WE ALSO DISMISS THE APPEAL OF THE REVENUE. ITA NO.619/CHD/2014 9. IT IS RELEVANT TO OBSERVE HERE THAT THE FACTS A ND CIRCUMSTANCES OF THIS CASE ARE SIMILAR TO THAT IN I TA NO.618/CHD/2014 AND THE FINDINGS GIVEN IN ITA NO.618/CHD/2014 SHALL APPLY TO THIS CASE ALSO WITH EQUAL FORCE. 10. IN THE RESULT, THE APPEALS OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF NOVEMBER, 2015. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACOUNTANT MEMBER DATED : 17 TH NOVEMBER, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 5