Sri. JAYANT N. PAREKH, MUMBAI V. ACIT CENT. CIR. - 40, MUMBAI

ITA 6878/MUM/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7989 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 02-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUM EET KUMAR
• Keywords: Business income; Speculation loss
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH: MUMBAI BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.6878/MUM/2008 (ASSESSMENT YEAR: 2005-06) MR JAYANT N. PAREKH, FORTUNE BLDG., 3RD FLOOR, 568, LADY JEHANGIR ROAD, FIVE GARDENS, MATUNGA, MUMBAI -400 020 ASSESSEE VS ASSTT. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 40, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020 REVENUE PAN: AADPP 0435 F ASSESSEE BY: SHRI RAJIV KHANDELWAL REVENUE BY: SHRI SUMEET KUMAR O R D E R PER R.S. PADVEKAR, JM IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD. CIT (A) CENTRAL -7, MUMBAI DATED 12.09.2008 FOR THE A.Y. 2005- 06. THE LD. COUNSEL SUBMITTED THAT GROUND NO.1 IS GENERAL IN NATURE AND GROUND NO.2 IS REGARDING CHARGING OF THE INTERE ST U/S.234B & 234C ARE CONSEQUENTIAL. THE ONLY EFFECTIVE GROUND IS GR OUND NO.2, WHICH READS AS UNDER:- ITA 6878/M/2008 MR JAYANT N. PAREKH 2 1. THE COMMISSIONER OF INCOME-TAX (APPEALS) CENT RAL VII, MUMBAI (HEREINAFTER REFERRED TO AS THE CIT (A0 ERRE D IN UPHOLDING THE ACTION OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 40, MUMBAI (HEREINAFTER REFERRE D TO AS THE ASSESSING OFFICER) IN NOT ALLOWING SET-OFF OF SPECU LATION LOSS OF ` 50,30,200 PERTAINING TO ASSESSMENT YEAR 2001-02 AG AINST THE SPECULATION INCOME OF THE YEAR UNDER REFERENCE ON THE GROUND THAT THE LOSS HAS BEEN FOUND TO BE NON GENUI NE AND HENCE, NOT ALLOWED TO BE CARRIED FORWARD IN THAT YE AR. 2. THE LD. COUNSEL SUBMITS THAT IN THE A.Y. 2001-02 , THE ASSESSEE HAS SUCCEEDED BEFORE THE TRIBUNAL ON THE ISSUE OF T HE LOSS AND HENCE, THE LOSS HAS TO BE SET OFF NOW. THE LD. COUNSEL ALSO F ILED THE COPY OF THE TRIBUNAL ORDER IN THE ASSESSEES OWN CASE IN ITA NO .3129/MUM/2007 DATED 6.8.2010, WHICH IS PLACED ON RECORD. THE ASS ESSEE IS IN THE SHARE TRADING AND SPECULATION. THE BUSINESS INCOME AS SH OWN AT ` NIL. IN THE COMPUTATION, THE ASSESSEE HAS SHOWN AS NET SPECULAT ION LOSS OF ` 450,30,200/- AGAINST WHICH THE SET OFF OF THE SAME AMOUNT WAS CLAIMED AND HENCE THE INCOME WAS DECLARED AT NIL. THE AS SESSEE CONTENDED THAT THE ASSESSEE HAS BROUGHT FORWARD LOSS OF ` 50,30,200/- FOR THE A.Y. 2001- 02 WHICH WAS SET OFF AGAINST INCOME OF THE A.Y. 200 5-06. THE A.O. DECLINED TO GIVE THE BENEFIT OF THE SET OFF AS CLAI MED BY THE ASSESSEE IN RESPECT OF THE SPECULATION LOSS FOR THE A.Y. 2001-0 2. IN THE A.Y. 2001-02, THE SPECULATION LOSS OF ` 1,45,33,058/- WAS REJECTED AS A NON-GENUINE. WHEN THE MATTER REACHED BEFORE THE TRIBUNAL THE TRI BUNAL ALLOWED LOSS CLAIMED BY THE ASSESSEE AND OPERATIVE PART OF THE O RDER IS PARA NO.24, WHICH READS AS UNDER:- 24. SINCE THE NAME OF THE ASSESSEE DOES NOT APPEAR IN THE LIST OF PARTIES INVOLVED IN THE SECURITY SCAM OR IN THE JPC REPORT OR IN ANY OF THE ORDERS OF THE SEBI AND SINCE THE SPECULATION PR OFIT / SPECULATION LOSS DECLARED BY THE ASSESSEE AS WELL AS SUCCEEDING ASSESSMENT YEARS EXCEPT FOR THE IMPUGNED ASSESSMENT YEAR AND S INCE THE ITA 6878/M/2008 MR JAYANT N. PAREKH 3 VARIOUS DOCUMENTS FILED DURING THE COURSE OF ASSESS MENT PROCEEDINGS AS WELL AS APPEAL PROCEEDINGS WERE NOT PROPERLY APPRECIATED BY THE REVENUE AUTHORITIES AND SINCE TH E LOSS DECLARED BY KNP SECURITIES (P) LTD., A KETAN PAREKH GROUP CO NCERN, HAS BEEN ACCEPTED IN 143(3) ORDER FOR THE A.Y. 2001-02, THER EFORE, WE ARE OF THE CONSIDERED OPINION THAT THE CIT (A) WAS NOT JUS TIFIED IN DISALLOWING THE CLAIM OF SHARE TRADING LOSS OF ` 1,45,33,058 MADE BY THE ASSESSEE. WE, THEREFORE, SET ASIDE THE ORDE R OF THE CIT (A0 AND THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 3. WHEN THE PRESENT ASSESSMENT ORDER WAS PASSED, TH E MATTER WAS IN THE LITIGATION. WE, THEREFORE, DIRECT THE A.O. TO ALLOW THE SET OFF OF THE SPECULATION LOSS OF 2001-02 AS PER THE PROVISIONS O F LAW AGAINST THE SPECULATION INCOME IN THE A.Y. 2005-06 AND BALANCE SPECULATION LOSS IS TO BE CARRIED FORWARD. ACCORDINGLY, GROUND NO.2 IS ALLOWED. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY O F 23RD MARCH 2011. SD/- SD/- ( T.R. SOOD ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 23RD MARCH 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CENTRAL VII, MUMBAI. 4) THE CIT CENTRAL IV, MUMBAI. ITA 6878/M/2008 MR JAYANT N. PAREKH 4 5) THE D.R. J BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR *CHAVAN I.T.A.T., MUMBAI ITA 6878/M/2008 MR JAYANT N. PAREKH 5 ` SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 15.03.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 15.03.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER