AJITKUMAR CHANDMAL DAWDA, MUMBAI V. ITO - 16(2)(1), MUMBAI

ITA 6467/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1389 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 12-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADAMPA NI BORA
• Keywords: Transactions in derivatives; Reassessment proceedings
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.6467/MUM/2018(A.Y. 2010-11) AJITKUMAR CHANDMAL DAWDA, 602, GIRIRAJ, OPP. M.K.HIGH SCHOOL, FACTORY LANE, BORIWALI (WEST), MUMBAI 400 092 PAN:AAAPD8336J ...... APPELLANT VS. INCOME TAX OFFICER -16(2)(1), ROOM NO.440-441, 4 TH FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 ..... RESPONDENT APPELLANT BY : SHRI DHARMESH SHAH RESPONDENT BY : SHRI KUMAR PADAMPA NI BORA DATE OF HEARING : 10/12/2019 DATE OF PRONOUNCEMENT : 12/12/2019 ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSION OF INCOME TAX (APPEAL)-5, (IN SHORT THE CIT(A)) MUMBAI DATED 29/06/2018 FOR ASSESSMENT YEAR 2010-11. 2. SHRI DHARMESH SHAH APPEARING ON BEHALF OF THE AS SESSEE SUBMITTED THAT REASSESSMENT PROCEEDINGS WERE INITIATED UNDE R SECTION 147 R.W.S 148 OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT) ON THE BASIS OF INFORMATION RECEIVED FROM DDIT(INV) WITH REGARD TO ALLEGED FICTITIOUS LOSS 2 ITA NO.6467/MUM/2018(A.Y. 2010-11) CLAIMED BY THE ASSESSEE ON TRADING OF FUTURE & OPTI ONS(IN SHORT F&O). THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE P OINTED THAT A PERUSAL OF THE ASSESSMENT ORDER DATED 29/12/2016 PASSED UND ER SECTION 143(3) R.W.S. 147 OF THE ACT WOULD SHOW THAT THE ALLEGED LOSS OF RS.2,35,286/- ON FUTURE & OPTION TRADING IS IN FACT PROFIT AND NOT LOSS AS CLAIMED BY THE DEPARTMENT. THEREFORE, THE ADDITION OF RS.2,35,285 /- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ARTIFICIAL LOSS IN F&O SEGMENT IS UNWARRANTED. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE MADE AN ALTERNATE SUBMISSION THAT EVEN IF IT WAS A LOSS, TH E DIFFERENCE WAS LESS THAN 5%, UNDER SUCH CIRCUMSTANCES, NO ADDITION IS WA RRANTED. TO SUPPORT HIS CONTENTION, THE LD. AUTHORIZED REPRESENTATIVE OF TH E ASSESSEE PLACED RELIANCE ON THE DECISION OF JAIPUR BENCH OF THE TRI BUNAL IN ITA NO.223/JP/2019 IN THE CASE OF SANDEEP SHARMA VS. I TO DECIDED ON 21/05/2019. TO FURTHER SUBSTANTIATE HIS CONTENTION S, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS FILED A CERTIFI CATE FROM M/S. ANANT INVESTMENTS, A BROKER, THROUGH WHOM TRANSACTIONS WE RE MADE, WHEREIN HE HAS CERTIFIED THAT DURING FINANCIAL YEAR 2009 -10 THE VALUE OF TRANSACTIONS WHERE CLIENT CODES WERE MODIFIED WERE LESS THAN 5% OF THE TOTAL VALUE OF TRADE EXECUTED BY THE ASSESSEE THRO UGH HIM. 3. SHRI KUMAR PADAMPANI BORA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED F OR DISMISSING THE APPEAL OF THE ASSESSEE. 4. BOTH SIDES HEARD AND ORDERS OF AUTHORITIES BELOW WERE PERUSED. THE ASSESSING OFFICER IN PARA 3.1 OF THE ASSESSMENT ORDER HAS TABULATED 3 ITA NO.6467/MUM/2018(A.Y. 2010-11) THE TRANSACTIONS, WHEREIN THE ASSESSEE HAS ALLEGEDL Y CLAIMED ARTIFICIAL LOSS OF RS.2,35,286/- IN CONNIVANCE WITH BROKER M/S. ANA NT INVESTMENTS. A PERUSAL OF THE TABLE REVEALS THAT IT IS NOT A LOSS OF RS.2,35,286/-, IN FACT IT IS A POSITIVE INCOME, WHICH ASSESSEE HAS EARNED IN F&O SEGMENT. APPARENTLY, THE ASSESSING OFFICER HAS MISREAD THE T RANSACTIONS. SIMILAR ERROR HAS BEEN COMMITTED BY THE CIT(A) WHILE INTERP RETING THE TRANSACTIONS. WE FIND MERIT IN THE CONTENTION OF THE ASSESSEE. THE ADDITION OF RS.2,35,285/- MADE ON ACCOUNT OF ALLEGE D AFORESAID LOSS ON FUTURE & OPTIONS IS THUS, DELETED. 5. IN THE RESULT, IMPUGNED ORDER IS SET-ASIDE AND A PPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 12TH DAY OF DECEMBER, 2019. SD/- SD/- (R.C.SHARMA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 12/12/2019 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI