KHANDELWAL BROTHERS LTD, MUMBAI V. ITO 2(2)(1), MUMBAI

ITA 6956/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1726 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-01-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 13-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Speculation loss

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL, JUDICIAL MEMBER A ND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO. 6956/M/2011 ASSESSMENT YEAR: 2008-2009 M/S. KHANDELWAL BROTHERS LTD., 269, DR. D.N. ROAD, MUMBAI-400 001. PAN:AAACK28231Q VS. INCOME TAX OFFICER-2(2)(1), AAYAKAR BHAVAN, MARINE LINES, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SURINDER MEHRA RESPONDENT BY : SHRI MANOJ KUMAR, CIT-DR DATE OF HEARING: 21.1.2013 DATE OF ORDER: 15.2.2013 O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 13.10.2010 IS AGAINST THE ORDER OF CIT (A)-5, MUMBAI DATED 26.07.2011 FOR THE ASSESSMENT Y EAR 2008-2009. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GRO UNDS WHICH READ AS UNDER: 1.A) THAT THE CIT (A) HAS ERRED IN UPHOLDING THE O RDER OF THE ASSESSING OFFICER HOLDING THAT LOSS IN DAILY TRADING IN SHARES OF RS. 46,75,573/- AND LOSS IN DAILY TRADING IN COMMODITIES OF RS. 1,87,916/- ARE NOT ALLOWABLE AGAINST OTHER INCOME FOR THE YEAR UNDER CONSIDERATI ON. B) THAT THE LOSSES ARE ALLOWABLE DEDUCTION AGAINST THE OTHER INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AND D EDUCTION MAY BE ALLOWED FOR THE SAME. 3. AT THE OUTSET, SHRI SURINDER MEHRA, LD COUNSEL F OR THE ASSESSEE MENTIONED THAT THIS IS THE CASE THAT THE REVENUE AUTHORITIES FAILED TO GRANT SET OFF OF THE SPECULATION LOSSES EARNED ON ACCOUNT OF DAILY TRADI NG OF RS.46,75,573/- AND COMMODITIES DAY TRADING AMOUNTING TO RS. 1,87,916/- AGAINST THE PROFITS OF RS. 2,34,79,177/- EARNED ON TRADE OF SHARE DERIVATIVES. 4. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL ASS ERTED THAT THERE IS NO DISPUTE ABOUT THE SPECULATIVE NATURE OF BOTH THE LO SSES AND PROFITS EARNED BY THE 2 ASSESSEE. NONE OF THE PARTIES HAVE GONE INTO THE D ETAILS AND INTRICACIES OF THIS ISSUE IN DETAILS. 5. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF THE AO / CIT (A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AUTHORITIES AND FIND THAT THE CIT (A) INVOKED THE P ROVISIONS OF SECTION 73 OF THE ACT AND THERE IS NO DISCUSSION IN THE ORDERS ABOUT THE REQUIREMENT OF GRANTING SET OFF AGAINST SPECULATION LOSSES AGAINST THE PROFITS. PRIMA FACIE , WE FIND THE DENIAL OF SET OFF IS NOT AS PER THE PROVISIONS OF THE SAID EXPLAN ATION. NEVERTHELESS, THERE IS A NEED FOR CATEGORICAL FINDING ON THE SPECULATION CHARACTE R OF THE SAID INCOME AND LOSSES. THEREFORE, WE ARE OF THE OPINION THAT THE ASSESSEE IS ENTITLED TO RELIEF SUBJECT TO THE FACT THAT BOTH THE IMPUGNED LOSSES AND PROFITS ARE SPECULATIVE IN NATURE. SUBJECT TO ABOVE, WE ARE OF THE OPINION THAT THE ASSESSEE IS E NTITLED TO THE CLAIM AND THE ASSESSING OFFICER IS DIRECTED TO EXAMINE THE SPECUL ATIVE NATURE OF THE AMOUNTS INVESTED BEFORE GRANTING SET OFF AND ALLOW THE RELI EF AS PER THE LAW. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE SET ASIDE . 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF FEBRUARY, 2013. SD/- SD/- (DINESH KUMAR AGARWAL) (D. KARUNAKAR A RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 15.2.2013 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR A, BENCH, ITAT, MUMBAI. 6. GUARD FILE. 3 // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI