ACI 5 (2), MUMBAI V. MAINI SHIPPING AGENCIES P. LTD, MUMBAI

ITA 6201/MUM/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7949 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 13-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Assessee Lawyers: SANJIV M SHAH
• Keywords: Depreciation; Speculation loss; Revised return; Unabsorbed depreciation

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - B BENCH. . . , , BEFORE S/SH.I.P.BANSAL, JUDICIAL MEMBE R & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 6201/MUM/2010, ! ! ! ! / ASSESSMENT YEAR-2005-06 DCIT-5(2), R. NO. 571, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. MAINI SHIPPING AGENCIES PVT. LTD. C/O GAUTAM MANI, 2/B, CELENDALE APT. NO.3, BENSON CROSS, BENSON TOWER, BANGALORE-560046 PAN: AAACM3713F ( '# / APPELLANT) ( $%'# / RESPONDENT) & ' / REVENUE BY : SHRI VIVEK BATRA () () () () ' ' ' ' / ASSESSEE BY : SHRI SANJIV M. SHAH & && & )* )* )* )* / DATE OF HEARING : 13-08-2014 +,! & )* / DATE OF PRONOUNCEMENT : 13-08-2014 , 1961 & && & 254 )1( )-) )-) )-) )-) . . . . ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM : CHALLENGING THE ORDER DT.07.06.2010 OF THE CIT(A)-9 ,MUMBAI, ASSESSING OFFICER (AO) /ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE SET OFF OF BROUGHT FORWARD BUSINESS LOSS AND UN ABSORBED DEPRECIATION WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT MADE ANY CLAIM F OR SET OFF OF BROUGHT FORWARD BUSINESS LOSS AND UNABSORBED DEPRECIATION IN THE RETURN OF INCOME FIL ED INCLUDING REVISED RETURN. 2.THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT (A) BE SET ASIDE AND THE ORDER OF THE A.O. BE RESTORED 3.THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD ANY OTHER GROUNDS WHICH MAY BE NECESSARY. 2. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF FINANCE AND SHARE,FILED ITS RETURN OF INCOME ON 10.10.2005DECLARING INCOME OF RS.38,08,360/-.ASSESS ING OFFICER(AO)FINALISED THE ASSESSMENT U/S.143(3) OF THE ACT,ON 26.11.2007, DETERMINING TH E TOTAL INCOME AT RS. 74,42,528/-. 2.1. EFFECTIVE GROUND OF APPEAL IS ABOUT SET OFF OF BROU GHT FORWARD BUSINESS LOSS AND UNABSORBED DEPRECIATION OF EARLIER YEARS.THE RELEVANT FACTS AR E THAT IN THE ASSESSMENT YEAR 2004-05 THE ASSESSEE HAD CLAIMED THAT IT HAD SUFFERED SHORT TE RM CAPITAL LOSS OF RS. 5,68,247/- AND LONG TERM CAPITAL LOSS OF RS.1,80,480/-ON SALE OF SHARES.THE ASSESSEE CLAIMED THAT IT WAS ENTITLED TO CARRY FORWARD THOSE LOSSES.THE AO DID NOT ALLOW THE APPEL LANT TO SET OFF THOSE LOSSES. 2.2. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE ASSESSMENT ORDER, THE IT A/6201/2010 MAINI SHIPPING AGENCIES P. LTD. 2 FAA HELD THAT IN THE APPEAL ORDER DATED 22.02.2007, FOR THE AY-2004-05,THE THEN FAA HAD HELD THAT CAPITAL LOSSES OF THE ASSESSEE WERE SPECULATIV E IN NATURE, THAT THOSE LOSSES COULD BE ADJUSTED AGAINST THE SPECULATIVE PROFITS ONLY,THAT DURING TH E YEAR UNDER CONSIDERATION THE ASSESSEE HAD NOT EARNED ANY SPECULATIVE PROFITS, THAT THOSE LOSSES C OULD NOT BE ADJUSTED AGAINST THE INCOME OF THE YEAR UNDER APPEAL. HE FURTHER HELD THAT ASSESSEE WA S ENTITLED TO CARRY FORWARD THOSE SPECULATIVE LOSSES AS A PROVISIONS OF SECTION 73 OF THE ACT. 2.3. BEFORE US,DEPARTMENTAL REPRESENTATIVE(DR) SUPPORTED THE ORDER OF THE AO.AUTHORISED REPRESENTATIVE(AR) STATED THAT SIMILAR DISALLOWANCE WAS MADE IN THE AY 2004-05,THAT AS A PROTECTIVE MEASURE ISSUE WAS RAISED BEFORE THE FAA. HE REFERRED TO PAGE NO. 190 OF THE PAPER BOOK AND RELIED UPON THE ORDER OF THE 'I' BENCH OF MUMBAI TRIBUNAL (ITA NOS. 2687/MUM/2008, 2716/MUM/2007 AND 3531/MUM/2007-AYS- 2001-02, 2004- 05 AND 2004-05 DT. 21.01.2011). 2.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US, WE FIND THAT SIMILAR ISSUE HAD ARISEN IN THE AY 2004-05 IN ITA NO. 3531 (SUPRA),THE AO HAD RAISED FOLLOWING GROUND IN THIS REGARD: 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW SET OFF OF UNABSORBED DEPRECIATION OF A.YS. 1984-85 TO 1993-94 AMOUNTING TO RS.1,54,02,747/- AGAINST THE C URRENT YEAR'S INCOME.' TRIBUNAL HAD DECIDED THE ISSUE AS UNDER: ' COMING TO GROUND NO.3 ON THE ISSUE OF SET OFF OF UNABSORBED LOSSES WE HAVE HOLD THE DIRECTION OF THE CIT ON THIS ISSUE AS IT IS IN LYING IN THE D ECISION OF THE SPECIAL BENCH 'E' OF THE TRIBUNAL IN THE CASE OF DCIT VS. TIMES GUARANTEE LTD. (2010 41 DTR(MUM) (TRIB.) 139. THUS, WE DISMISSED THIS GROUND.' WE FIND THAT THE MAIN OBJECTION OF THE AO IS THAT F AA HAD ALLOWED THE SET OFF OF BROUGHT FORWARD BUSINESS LOSSES AND UNABSORBED DEPRECIATION , THOUGH NO CLAIM WAS MADE IN THE RETURN OF INCOME INCLUDING THE REVISED RETURN FILED BY THE AS SESSEE.WE ARE OF THE OPINION THAT AFTER THE JUDGMENT DELIVERED BY THE HON'BLE JURISDICTIONAL HI GH COURT IN THE CASE OF PRITHIVI BROKERS & SHAREHOLDERS LTD.(349 ITR 336), THE POSITION IS VE RY CLEAR.THE HON'BLE COURT HAD CONSIDERED THE JUDGMENT OF THE HON'BLE APEX COURT DELIVERED IN THE CASE OF GOETZ INDIA LTD.,WHILE DELIVERING THE JUDGMENT OF PRITHIVI BROKERS & SHARE HOLDERS LTD.(SUPRA).WE WOULD LIKE TO REPRODUCE THE RELEVANT PORTION OF THE JUDGMENT OF T HE HON'BLE BOMBAY HIGH COURT,WHICH READS AS UNDER: AN ASSESSEE IS ENTITLED TO RAISE NOT MERELY ADDITI ONAL LEGAL SUBMISSIONS BEFORE THE APPELLATE AUTHORITIES BUT IS ALSO ENTITLED TO RAISE ADDITIONA L CLAIMS BEFORE THEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETION TO PERMIT SUCH ADDITIONAL CLAIM S TO BE RAISED. THE APPELLATE AUTHORITIES HAVE JURISDICTION TO DEAL NOT MERELY WITH ADDITIONAL GRO UNDS, WHICH BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW, BUT WITH ADDITIONAL GROUNDS WHICH WERE AVAILABLE WHEN THE RETURN WAS FILED. THE WORDS 'COULD NOT HAVE BEEN RA ISED' MUST BE CONSTRUED LIBERALLY AND NOT STRICTLY. THERE MAY BE SEVERAL FACTORS JUSTIFYING T HE RAISING OF A NEW PLEA IN AN APPEAL AND EACH CASE MUST BE CONSIDERED ON ITS OWN FACTS. ' RESPECTFULLY,FOLLOWING THE ABOVE,WE ARE OF THE OPIN ION THAT FAA IS ENTITLED TO ALLOW THE ASSESSEE THE RELIEF EVEN IF THE SAME IS RAISED BEFORE HIM FO R THE FIRST TIME.THEREFORE, CONFIRMING HIS ORDER WE DECIDE EFFECTIVE GROUND OF APPEAL AGAINST THE AO . IT A/6201/2010 MAINI SHIPPING AGENCIES P. LTD. 3 AS A RESULT, APPEAL FILED BY THE AO STANDS DISMISSED. /)0 () * & 2 & ) 34 . ORDER PRONOUNCED IN THE OPEN COURT ON 13TH AUGUST 2 014 . . & +,! 5 6 13 -) , 201 4 , & - 7 SD/- SD/- . . / I.P. BANSAL) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 6 /DATE: 13.08 . 2014. SK . . . . & && & $)8 $)8 $)8 $)8 98!) 98!) 98!) 98!) / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / '# 2. RESPONDENT / $%'# 3. THE CONCERNED CIT(A)/ : ; , 4. THE CONCERNED CIT / : ; 5. DR B BENCH, ITAT, MUMBAI / 8<- $) CH , . . . 6. GUARD FILE/ - / %8) %8) %8) %8) $) $)$) $) //TRUE COPY// . / BY ORDER, = / 3 DY./ASST. REGISTRAR , /ITAT, MUMBAI