The ACIT, Circle-6, Ahmedabad V. Shri Vijay Prabhudas Lalwani, Ahmedabad

ITA 641/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9900 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-01-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 28-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Business income; Retrospective amendment; Tax effect

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA.NO.641/AHD/2011 /BLOCK ASSTT. YEAR: 2007-2008 ACIT, CIR.6 AHMEDABAD. VS SHRI VIJAY PRABHUDAS LALWANI B/2/201, GOYAL INTERCITY DRIVE-IN-ROAD, THALTEJ AHMEDABAD. PAN : AAUPL 2947 F %& / (APPELLANT) '( %& / (RESPONDENT) REVENUE BY : SMT. SONIA KUMAR, SR.DR ASSESSEE BY : NONE / DATE OF HEARING : 05/01/2016 / DATE OF PRONOUNCEMENT: 05/01/2016 )*/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF LD.COMMISSIONER INCOME-TAX (APPEALS)-XI, AHMEDABAD DATED 17.12.2010 PASSED FOR THE ASSTT.YEAR 2007-08. 2. GROUND NO.2 AND 3 ARE THE ONLY SUBSTANTIAL GROUN DS OF APPEAL WHICH PROJECT THE GRIEVANCE OF THE REVENUE AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO TREAT THE LTCG & STCG RETURNED AS SUCH AND DELET ING THE ADDITION OF RS.19,91,168/- MADE BY THE AO BY TREATING THE DE CLARED STCG & ITA NO.641/AHD/2011 2 LTCG AS BUSINESS INCOME EARNED FROM THE BUSINESS OF SHARE TRADING TRANSACTIONS. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS14,91,748/- MADE BY THE AO BY TREATIN G THE DECLARED DIVIDEND INCOME AS BUSINESS INCOME EARNED FROM TH E BUSINESS OF SHARE TRADING TRANSACTIONS. 3. IN RESPONSE TO THE NOTICE OF HEARING NONE ONE HA S COME PRESENT ON BEHALF OF THE ASSESSEE. WITH THE ASSISTANCE OF THE LD.DR, WE HAVE GONE THROUGH THE RECORD CAREFULLY. ON PERUSAL OF THE RE CORD, WE FIND THAT THE ASSESSEE HAS DISCLOSED LONG TERM CAPITAL GAIN AND S HORT TERM CAPITAL GAIN OF RS.19,91,168/-. THE AO HAS TREATED THIS AMOUNT AS BUSINESS INCOME EARNED FROM THE BUSINESS OF SHARE TRADING TRANSACTION. TH E LD.CIT(A) HAS REVERSED THE VIEW OF THE AO AND TREATED THIS AMOUNT AS LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL. THUS THE RELIEF GIVEN TO THE ASSESSE E IS THE DIFFERENCE BETWEEN THE RATE OF TAX APPLICABLE ON LONG TERM CAPITAL GAI N AND THE BUSINESS INCOME. IF WE TAKE THAT FIGURE INTO ACCOUNT ALONG WITH THE ADDITION OF RS.14,91,748/- DELETED BY THE CIT(A) AND IMPUGNED IN GROUND NO.2, THEN THE TAX LIABILITY ON THE RELIEF GIVEN BY THE CIT(A) WOULD BE LESS THAN R S.10 LAKHS. WHEN WE CONFRONTED THIS TO THE LD.DR, SHE AGREED WITH US, B UT CONTENDED THAT IT BE LEFT OPEN FOR THE VERIFICATION OF THE AO. 4. ON 10.12.2015 THE CBDT HAS ISSUED INSTRUCTIONS BEARING NO. 21/2015 PROHIBITING ITS SUBORDINATE AUTHORITIES FROM FILING OF THE APPEAL TO THE TRIBUNAL AGAINST THE ORDER OF THE CIT(A) WHERE THE TAX EFFEC T BY VIRTUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.10 LAKHS. THE INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RETROSPECTIVE EFFECT, MEANING THEREBY, THESE INSTRUCTIONS ARE APPLICABLE ON PENDING APPEALS ALSO. IN THE PRE SENT CASE, ACCORDING TO OUR CALCULATIONS THE TAX EFFECT ON THE DELETION OF THE ADDITIONS AT END OF THE CIT(A) WOULD BE LESS THAN RS.10 LAKHS. THUS, THE PRESENT APPEAL DESERVES TO BE ITA NO.641/AHD/2011 3 DISMISSED BEING TREATED TO BE FILED IN VIOLATION OF CBDT INSTRUCTIONS. HOWEVER, IT IS OBSERVED THAT SINCE THE LD.DR COULD NOT, WITHOUT ASSISTANCE OF THE LD.AO, MAKE A STATEMENT OF FACT AT THE BAR, STA TING THEREIN THE TAX EFFECT IS LESS THAN RS.10 LAKHS, THEREFORE, WE GIVE LIBERTY T O THE REVENUE TO FILE A MISC. APPLICATION FOR RECALL OF THIS ORDER, IF ON RE-VERI FICATION AT THE END OF THE AO, IT CAME TO HIS NOTICE THAT THE TAX EFFECT IS MORE O R IT FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE INSTRUCTION. SUCH APPLIC ATION SHOULD BE FILED WITHIN FOUR YEARS OF THIS ORDER. IN VIEW OF THE ABOVE, TH E APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 5 TH JANUARY, 2016 AT AHMEDABAD. SD/- SD/- ( MANISH BORAD ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 05/01/2016