CHARU G. MEHTA, MUMBAI V. ACIT 5(3), MUMBAI

ITA 7164/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88199 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 21-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J PREMANAND
• Keywords: Opportunity of being heard; Assessment record

Judgement Text

, , , , , ,, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI . . , ! '#, $ BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.7164/MUM/2011 ASSESSMENT YEAR: 2008-09 MRS. CHARU G. MEHTA, 5 TH FLOOR, 52 MARBEL ARCH, DR. G.D. DESHMUKH MARG, PEDDAR ROAD, MUMBAI-400026 / VS. ACIT - 5(3), MUMBAI ( '() /ASSESSEE) ( *# / REVENUE) P.A. NO.AACCC1775F '() + , + , + , + , / // / ASSESSEE BY SHRI BHUPENDRA SHAH *# + , + , + , + , / REVENUE BY: SHRI J. PREMANAND + )-! / / / / DATE OF HEARING : 28/01/2015 ./0 + )-! / DATE OF PRONOUNCEMENT : 28 /01/2015 ' ' ' '1 1 1 1 / / / / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) : THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 08/07/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED BY THE ASSESSEE PERTAINS TO DISA LLOWANCE OF RS.27,84,382/- OUT OF THE INTEREST BY HOLDING THAT THE SAME WAS NOT USED FOR BUSINESS. MRS. CHARU G. MEHTA. . 2 2. DURING HEARING, AT THE OUTSET, THE LD. COUNSEL F OR THE ASSESSEE, SHRI BHUPENDRA SHAH, CLAIMED THAT THE IM PUGNED ISSUE IS COVERED, ON IDENTICAL FACT, BY THE DECISIO N OF THE TRIBUNAL DATED 01/02/2013, IN THE CASE OF MR. GAUTAM MEHTA,( ITA NO.7162/MUM/2011), HUSBAND OF THE ASSESSEE. SHRI J. PREMANAND, LD. DR, THOUGH DEFENDED THE IMPUGNED ORD ER, BUT DID NOT CONTROVERT THE ORDER OF THE TRIBUNAL. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF, ARE THAT THE ASSESSING OFFICER, BY WAY OF DISALLOWANCE OF INTERE ST, ADDED RS.27,84,382/- BY HOLDING THAT THE ASSESSEE PAID TH E SAME IN RESPECT OF SHARE TRADING ACTIVITIES. THE CLAIM OF THE ASSESSEE IS THAT THERE IS NO DIVERSION OF INTEREST BEARING LOAN S, THUS, THE DISALLOWANCE IS NOT JUSTIFIED. WITHOUT GOING INTO MUCH DELIBERATION, WE FIND THAT IN THE CASE OF SHRI GAUT AM MEHTA (HUSBAND OF THE ASSESSEE) (ITA NO.7162/MUM/2011) SM C BENCH, ORDER DATED 01/02/2013 HELD AS UNDER:- 6. AFTER CONSIDERING THE SUBMISSION AND PERUSING T HE MATERIAL ON RECORD, I FOUND THAT THE ASSESSEE DESERVES TO SUCCE ED ON THE FIRST ISSUE. BOTH THE AUTHORITIES BELOW I.E. AO AS WELL A S CIT(A) WERE OF THE VIEW THAT THE ASSESSEE HAS DIVERTED ITS FUNDS F OR PERSONAL INTEREST IN THE BUSINESS OF SHARE TRADING. IT IS NO T UNDERSTANDABLE AS TO WHAT WAS THE PERSONAL INTEREST OF THE ASSESSE E IN DIVERTING THE FUNDS TO SHARE TRADING. THIS IS A BUSINESS MAN, WHO KNOWS HOW TO RUN HIS BUSINESS ACTIVITY. IN STEAD OF DOING DIAMON D AND JEWELLERY EXPORT DURING THE YEAR UNDER CONSIDERATION, THE ASS ESSEE TRANSFERRED ITS ENTIRE FUNDS IN SHARE TRADING BUSIN ESS. THIS IS LUCK OF THE ASSESSEE THAT HE SUFFERED A HEAVY LOSS IN SH ARE TRANSACTIONS. IT WAS EXPLAINED BEFORE THE CIT(A) THAT DURING THE YEAR THE LOSS IN MRS. CHARU G. MEHTA. . 3 FUTURE AND OPTIONS AT (-) RS.1.53 CRORES. THE ASSES SEE HAS INVESTED FAIRLY LARGE AMOUNT WITH THE INTENTION TO TAKE MAXI MUM ADVANTAGE OF FLUCTUATION IN THE SHARE MARKET AND MAKE PROFIT. ALL OF SUDDEN, CRISIS DEVELOPED AND THE PRICES CRASHED SHARPLY LEA VING NO SCOPE FOR RECOVERY. IT WAS ALSO STATED THAT THE STRATEGY FAILED AND IT HAD TO BOOK HEAVY LOSSES TO THE TUNE OF RS.1.53 CRORES. 7. IT WAS ALSO SUBMITTED THAT THE ASSESSEE MAINLY LOST RS.34.00 LACS THROUGH MOTILAL OSWAL SECURITIES AND RS.124.94 LACS THROUGH EDLEWEISS SECURITIES LTD., LEHMAN BROTHERS CASE IS WELL KNOWN TO EVIDENCE THE SAME. MEANWHILE, INTERNATIONAL MARKET WITNESSED WORST EVERY CRISIS. IT EFFECTS CONTINUES TILL DATE EVEN AFTER. THIS SUBMISSION OF THE ASSESSEE NEITHER FOUND WRONG NOR COULD BE CONTROVERTED BY ANY OF THE LOWER AUTHORITIES. BY CH ANCE, IF THE SHARE MARKET CRASHED AND THE ASSESSEE SUFFERED LOSS ES, THEN IF THE LOSS IS GENUINE, THAT HAS TO BE ALLOWED. AS STATED ABOVE, THIS IS A BUSINESS MAN, WHO KNOWS HOW TO RUN AND MANAGE AND H OW TO DO HIS BUSINESS ACTIVITY. THE ASSESSEE THOUGHT PROPER THAT INSTEAD OF DIAMOND AND JEWELLERY BUSINESS, HE CAN EARN HEAVY P ROFITS IN SHARE TRADING BUSINESS AS THERE WAS A BIG FLUCTUATI ON IN SHARE TRADING BUSINESS. HOWEVER, LUCK DID NOT FAVOUR TO T HE ASSESSEE AND, THEREFORE, HE SUFFERED A HEAVY LOSSES. IT CANN OT BE SAID THAT THE ASSESSEE HAS DIVERTED ITS BUSINESS FUNDS TO SOM E PRIVATE PARTIES FROM WHOM NO INTEREST HAS BEEN CHARGED. THE ASSESSE E BORROWED FUNDS FOR DIAMOND AND JEWELLERY BUSINESS, HOWEVER, DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE TRANSFERRED ALL ITS BUSINESS FUNDS TO THE SHARE TRADING BUSINESS. THIS FACT IS A DMITTED BY BOTH THE AUTHORITIES I.E. THE AO AND THE CIT(A). THE OBS ERVATION OF THE LEARNED CIT(A) THAT THE ASSESSEE HAS DIVERTED THE ENTIRE FUNDS IN SHARE TRANSACTION FOR PERSONAL INTEREST WHICH CANNO T BE BURDENED ON THE BUSINESS, THIS OBSERVATIONS OF THE LEARNED CIT(A), IN MY MRS. CHARU G. MEHTA. . 4 CONSIDERED VIEW, ARE NOT CORRECT BECAUSE THE ASSESS EE HAS DIVERTED HIS OWN FUNDS, WHICH WERE BURROWED FOR DIAMOND AND JEWELLERY BUSINESS TO THE SHARE TRADING BUSINESS. THE DIAMOND AND JEWELLERY BUSINESS WAS ALSO PERSONAL BUSINESS OF THE ASSESSEE AND SHARE TRADING IS ALSO PERSONAL BUSINESS OF THE ASSESSEE. THEREFORE, THIS IS ASSESSEES WISH WHERE THE BUSINESS FUNDS ARE TO BE UTILIZED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE LOSS SUFFERED BY THE ASSES SEE IS ALLOWABLE, HOWEVER, THE GENUINENESS OF THE LOSS CAN BE VERIFIE D BY THE AO. I ORDER ACCORDINGLY. 2.2. IN THE LIGHT OF THE ABOVE, WITHOUT GOING INTO MUCH DELIBERATION, SINCE THE ASSESSMENT RECORD/FACTS OF THE CASE OF SHRI GAUTAM MEHTA (HUSBAND OF THE ASSESSEE) ARE NOT AVAILABLE BEFORE US, THEREFORE, WE DIRECT THE LD. ASSESSING O FFICER TO EXAMINE THE FACTS OF THE ASSESSEE VIS--VIS THE PRE SENT ASSESSEE AND IF HE FINDS THAT THE FACTS ARE IDENTICAL THEN D ECIDE THE APPEAL IN ACCORDANCE WITH LAW AND IN THE LIGHT OF THE AFOR ESAID ORDER OF THE TRIBUNAL. THE ASSESSEE MAY BE GIVEN OPPORTUNITY OF BEING HEARD. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN TERMS INDICATED HEREINABOVE. FINALLY, THE APPEAL OF THE ASSESSEE IS DISPOSED OFF AS ABOVE. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 28/01/2015. '1 + ./0 2'3 28/01/2015 / + 9 SD/ - (N.K.BILLAIYA) SD/ - (JOGINDER SINGH) ! '# ! '# ! '# ! '# / ACCOUNTANT MEMBER '# '# '# '# / JUDICIAL MEMBER MUMBAI; 2' DATED : 28/01/201 5 F{X~{T? P.S/. .. MRS. CHARU G. MEHTA. . 5 '1 + :) ;0) '1 + :) ;0) '1 + :) ;0) '1 + :) ;0)/ COPY OF THE ORDER FORWARDED TO : 1. <= / THE APPELLANT 2. :><= / THE RESPONDENT. 3. ? ( ) / THE CIT, MUMBAI. 4. ? / CIT(A)- , MUMBAI 5. A9 :) , , / DR, ITAT, MUMBAI 6. 9B' C / GUARD FILE. '1 '1 '1 '1 / BY ORDER, >) :) //TRUE COPY// D DD D/ // /E * E * E * E * (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI