UDAY CHANDER KHANNA, MUMBAI V. DCIT (OSD)12, MUMBAI

ITA 6979/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88018 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 02-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 21-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JEETENDRA KUMAR
• Assessee Lawyers: PRAKASH MUNI
• Keywords: Business income; Business expenditure; Condonation of delay
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F , MUMBAI BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 69 79 /M/201 2 ASSESSMENT YEAR: 2008 - 0 9 SHRI UDAY CHANDER KHANNA, 182, 18 TH FLOOR, CENTRUM TOWER, BARKAT ALI ROAD, WADALA (E), MUMBAI 400 037 PAN: AFEPK7061E VS. DCIT (OSD) 12, MUMBAI - 400051 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRAKASH MUNI , A.R. REVENUE BY : SHRI JEETENDRA KUMAR , D.R. DATE OF HEARING : 30.12. 201 4 DATE OF PRONOUNCEMENT : 14.01.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 16.04.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS ) [(HEREINAFTER REFERRED TO AS CIT(A)] RELEVANT TO ASSESSMENT YEAR 2008 - 09 PASSED UNDER SECTION 154 READ WITH SECTION 250 OF THE INCOME TAX ACT. THERE IS A DELAY OF 15 DAYS IN FILING THE PRESENT APPEAL BEFORE US. THE ASSESSEE HAS FILED AN APPLICATION FO R CONDONATION OF DELAY WHEREIN IT HAS BEEN PLEADED THAT THE ASSESSEE DUE TO HIS BAD HEALTH COULD NOT CO - ORDINATE WITH HIS CHARTERED ACCOUNTANT WHICH RESULTED IN DELAY OF 15 DAYS IN FILING THE APPEAL. CONSIDERING THE SHORTNESS OF THE DELAYED PERIOD AND SUB MISSION OF THE ASSESSEE THE SHORT DELAY IN FILING THE PRESENT APPEAL IS HEREBY CONDONED AND THE APPEAL IS TAKEN UP FOR DISPOSAL. ITA NO.6979/M/2012 SHRI UDAY CHANDER KHANNA 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEES INCOME FROM SALE AND PURCHASE OF SHARES WAS TREATED AS BUSINESS INCOM E BY THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) AGAINST THE CLAIM OF SHORT TERM CAPITAL GAINS MADE BY THE ASSESSEE. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). 3. THE LD. CIT(A) UPHELD THE FINDINGS OF THE AO TREATING THE INCOME FROM SALE OF SHARES AS BUSINESS INCOME. THEREAFTER THE ASSESSEE MOVED AN APPLICATION UNDER SECTION 154 OF THE INCOME TAX ACT FOR RECTIFICATION OF THE ORDER SUBMITTING THAT SINCE THE INCOME FROM SALE OF SHARES HAS BEEN TREATED AS BUSINESS INCOME, HENCE THE CORRESPONDING EXPENDITURE INCURRED TOWARDS EARNING OF THE INCOME BE ALLOWED AS BUSINESS EXPENDITURE. THE LD. CIT(A) DISMISSED THE APPLICATION OF THE ASSESSEE OBSERVING THAT SINCE THE MATTER INVOLVES A LONG DRAWN OUT PROCESS OF REASONING, HENCE CANNOT BE SUBJECT MATTER OF RECTIFICATION UNDER SECTION 154 OF THE ACT. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS COME IN APPEAL BEFORE US. 4. THE ASSESSEE H AS RAISED TWO GROUNDS OF APPEAL. THE FIRST GROUND IS AGAINST THE ACTION OF THE LD. CIT(A) IN UPHOLDING THE TREATMENT OF SHARE INCOME AS BUSINESS INCOME AS AGAINST SHORT TERM CAPITAL GAINS CLAIMED BY THE ASSESSEE. WE FIND THAT THE ASSESSEE HAD NOT PREFERRED ANY APPEAL AGAINST THE MAIN ORDER OF THE LD. CIT(A) DATED 16.04.12. THE SAID ORDER THU S HAS BECOME FINAL. THE PRESENT APPEAL HAS BEEN PREFERRED AGAINST THE ORDER UNDER SECTION 154 WHEREIN NO SUCH ISSUE WAS RAISED BY THE ASSESSEE. HENCE, THE ASSESSEE IS ESTOPPED FROM RAISING SUCH AN ISSUE IN THIS APPEAL AND THIS GROUND IS ACCORDINGLY DISMI SSED. 5. VIDE GROUND NO.2, THE ASSESSEE HAS AGITATED THE DENIAL OF BUSINESS EXPENDITURE AS AGAINST THE BUSINESS INCOME. WE FIND THAT SINCE THE CLAIM OF THE ASSESSEE REGARDING INCOME FROM SALE AND PURCHASE OF SHORT TERM CAPITAL GAINS ITA NO.6979/M/2012 SHRI UDAY CHANDER KHANNA 3 HAS BEEN REJECTED B Y THE LOWER AUTHORITIES AND THE SAME HAS BEEN TREATED AS BUSINESS INCOME, HENCE THE ASSESSEE IS OBVIOUSLY ENTITLED TO DEDUCTION OF EXPENDITURE INCURRED AGAINST EARNING OF THE SAID BUSINESS INCOME. HENCE, WE FIND THAT THERE IS AN ERROR APPARENT ON RECORD. IN VIEW OF THIS, THE APPLICATION OF THE ASSESSEE IS ALLOWED AND CONSEQUENTLY THE MATTER IS RESTORED TO THE AO FOR THE PURPOSE OF VERIFICATION OF THE EXPENDITURE CLAIM OF THE ASSESSEE. IF THE EXPENDITURE CLAIMED BY THE ASSESSEE IS FOUND BY THE AO TO BE IN CURRED FOR THE PURPOSE OF EARNING OF BUSINESS INCOME, THE SAME BE ALLOWED AS BUSINESS EXPENDITURE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.01.2015 . SD/ - SD/ - (D. KARUNAKARA RAO ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 14.01.2015 . * KISHORE , SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED , MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.