Hardoi District Co-operative Bank Ltd., Hardoi V. Director Of Income Tax (I & CI), Lucknow

ITA 719/LKW/2013

• Counselvise Citation: 71923714 RSA 2013
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 24-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAFALI SWAROOP
• Assessee Lawyers: S K JAIN; SWARN SINGH
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.719/LKW/2011 A.Y.:2003 - 04 DY.C.I.T. - 4, KANPUR. VS. SHRI ATUL KANODIA, 511, KRISHNA TOWER, 14/113, CIVIL LINES, KANPUR. PAN:AAZPK2316C (APPELLANT) (RESPONDENT) C.O.NO.43/LKW/2012 (IN ITA NO.719/LKW/2011) A.Y.:2003 - 04 SHRI ATUL KANODIA, 511, KRISHNA TOWER, 14/113, CIVIL LINES, KANPUR. PAN:AAZPK2316C VS. DY.C.I.T. - 4, KANPUR. (OBJECTOR) (RESPONDENT) REVENUE BY SMT. SAFALI SWAROOP, D.R. ASSESSEE BY S/SHRI S. K. JAIN & SWARN SINGH DATE OF HEARING 22/11/2013 DATE OF PRONOUNCEMENT 2 9 /11/2013 O R D E R PER A. K. GARODIA, A.M. THE APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT ( A) - I, KANPUR DATED 22/08/2011 FOR ASSESSMENT YEAR 2003 - 2004. 2 2. FIRST WE TAKE UP THE CROSS OBJECTION FILED BY THE ASSESSEE. THE LEARNED A.R. OF THE ASSESSEE SUBMITTED BEFORE US THAT THE CROSS OBJECTION IS NOT PRESSED AND ACCORDINGLY THE SAME IS DISMISSED AS NOT PRESSED. 3. NOW WE TAKE UP THE APPEAL FILE BY THE REVENUE. THE GROUNDS RAISED BY REVENUE AS PER REVISED GR OUNDS OF APPEAL ARE AS UNDER: 1. THE LD. CIT ( A) - I, KANPUR HAS ERRED IN LAW AND ON FACTS IN PARTLY DELETING THE ADDITION OF RS.8.57 LACS, RS.1 LAC AND RS.10 LACS TAKEN BY THE ASSESSEE FROM SHRI BISHAN KUMAR AGARWAL, SHRI RADHEY SHYAM AGARWAL & M/S SAKSHAM CONSTRUCTION CO. RESPECTIVELY IGNORING THE FACT THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE STATUTORY ONUS CAST UPON HIM U/S 68 OF THE I.T. ACT IN SPITE OF SPECIFIC OPPORTUNITIES GIVEN TO HIM. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (A) - I, KA NPUR, HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE A. O. TO TREAT THE PROFIT ON SALE OF SHARES AS CAPITAL GAIN INSTEAD OF INCOME FROM BUSINESS IGNORING THE FINDINGS OF THE HON'BLE SUPREME COURT IN THE OF G. VANKASTESH WAMY NAIDU & CO. VS. CIT 35 ITR 594 (SC) AND ALSO JUDICIAL PRONOUNCEMENT IN THE CASE OF EXPRESS NEWS PAPER LTD. VS. CIT 53 ITR 250 (SC). 3. THAT THE ORDER OF LD. CIT ( A) - I, KANPUR BEING ERRONEOUS, UNJUST AND BAD IN LAW BE VACATED AND THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF THE GROUNDS OF APPEAL GIVEN ABOVE AND/OR ADD ANY FRESH GROUND AS AND WHEN IT IS CONSIDERED NECESSARY. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LEARNED A.R. OF THE ASSESSEE SUPP ORTED THE ORDER OF LEARNED CIT ( A). H E ALSO SUBMITTED THAT THE ISSUE INVOLVED IN THE PRESENT CASE, AS PER GROUND NO. 2, IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE 3 JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 97 - 98 , 98 - 99, 99 - 2000, 2000 - 2001 AND 2005 - 06. HE SUBMITTED THAT THE COPY OF THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS AVAILABLE ON PAGES 123 TO 127 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT THE COPY OF TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006 - 07 AND 2005 - 06 IS AVAILABLE ON PAGES 128 TO 131 OF THE PAPER BOOK WHEREIN SIMILAR ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BY FOLLOWING EARLIER DECISION OF THE TRIBUNAL FOR ASSESSMENT YEAR 97 - 98, 98 - 99 A ND OTHER YEARS. HE ALSO POINTED OUT THAT THE DETAILS OF THE TRANSACTIONS IN RESPECT OF CAPITAL GAIN IN THE PRESENT YEAR ARE AVAILABLE ON PAGES 102 TO 104 OF THE PAPER BOOK. IN R EPLY TO A QUERY BY THE BENCH, THE ASSESSEE SUBMITTED THE DETAIL OF SCRIPT WIS E PURCHASE AND SALE FOR FINANCIAL YEAR 2002 - 03 IN RESPECT OF TRADING TRANSACTIONS OF THE ASSESSEE IN SHARES. HE SUBMITTED THAT THERE MAY BE COMMON SCRIPTS FOR TRADING TRANSACTIONS AND INVESTMENT BUT THERE IS NO BAR THAT THE ASSESSEE CANNOT DO TRADING AS W ELL AS INVESTMENT IN THE SAME SCRIPT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT IN THE PRESENT YEAR , THE ASSESSEE DECLARED INCOME FROM LONG TER M CAPITAL GAIN OF RS.39,08,033/ - AGAINST SALES OF SHARES AND SHORT TERM CAPITAL GAIN OF RS.5,531/ - AGAINST SALES OF SECURITIES. HENCE, IT IS SEEN THAT THE DISPUTE IS REGARDING LONG TERM CAPITAL GAIN AND NOT SHORT TERM CAPITAL GAIN, WHICH MEANS THAT THE SH ARES, WHICH WERE SOLD BY THE ASSESSEE IN THE PRESENT YEAR, IN WHICH THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN, WERE HELD BY THE ASSESSEE FOR MORE THAN ONE YEAR. IN THE CASE OF THE ASSESSEE HIMSELF IN SEVERAL EARLIER YEARS, IT WAS HELD BY THE TRIBUN AL THAT THE PRO FIT ARISING ON SHARE OF SHARES I S CAPITAL GAIN AND NOT BUSINESS 4 INCOME. THIS TRIBUNAL ORDER HAS BEEN UPHELD BY HON'BLE ALLAHABAD HIGH COURT ALSO IN ASSESSEES OWN CASE FOR SEVERAL YEARS. NO DIFFERENCE IN FACTS COULD BE POINTED OUT BY LEARNE D D.R. OF THE REVENUE IN THE PRESENT YEAR AND IN THOSE EARLIER YEARS. AS PER THE DETAILS OF SHARES SOLD BY THE ASSESSEE IN THE PRESENT YEAR IN RESPECT OF LONG TERM CAPITAL GAIN, IT IS SEEN THAT IN MOST OF THE CASES , THE SHARES WERE HELD FOR MORE THAN ONE YEAR AND, THEREFORE, INCOME WAS DECLARED BY THE ASSESSEE AS LONG TERM CAPITAL GAIN AND ONLY IN VERY FEW CASES, SUCH SALE HAS TAKEN PLACE BEFORE A HOLDING PERIOD OF ONE YEAR RESULTING INTO SHORT TERM CAPITAL GAIN . ADMITTEDLY, THE ASSESSEE IS DEALING IN SH ARES ALSO BUT THIS ITSELF IS NOT A BAR THAT THE ASSESSEE CANNOT MAKE INVESTMENT IN SHARES. IT IS ADMITTED POSITION THAT A JEWELER CAN ALSO HOLD JEWELLERY AS INVESTMENT AND SIMILARLY A BUILDER CAN ALSO HOLD REAL ESTATE AS HIS INVESTMENT. SINCE LEARNED D.R . COULD NOT POINT OUT ANY DIFFERENCE IN FACTS IN PRESENT YEAR AS COMPARED TO EARLIER YEAR S IN WHICH TRIBUNAL AND HON'BLE HIGH COURT HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW IN THE PRESENT YEAR . H EN CE, WE CONFIRM THE ORDER OF LEARNED CIT(A) ON THIS ISSUE. ACCORDINGLY, GROUND NO. 2 OF THE REVENUES APPEAL IS REJECTED. 5.1 REGARDING THE VARIOUS JUDGMENTS CITED BY THE REVENUE IN THE GROUND ITSELF, WE WOULD LIKE TO OBSERVE THAT SINCE THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS IN FAVOUR OF THE ASSESSEE AND NO DIFFERENCE IN FACTS COULD BE POINTED BY THE LEARNED DR OF THE RE VENUE IN THE PRESENT YEAR AS COMPARED TO EARLIER YEAR S , WE ARE BOUND BY THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT AND A RE NOT SUPPOSE TO TAKE A CONTRARY VIEW ON THE BASIS OF SOME OTHER JUDGMENT OF A DIFFERENT HIGH COURT. SO FAR THE JUDGMENT OF HON'BLE SUPREME COUR T NOTED IN ITS GROUND IS CONCERNED, 5 THESE ARE OLD JUDGMENTS REPORTED IN 35 ITR AND 53 ITR WHEREAS THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE IS VERY RECENT JUDGMENT MUCH AFTER THE SE JUDGMENT S OF HON'BLE APEX COURT AND HENCE, IT CANNOT BE SAID THAT THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IS WITHOUT CONSIDERING THE SE JUDGMENT S OF HONBLE SUPREME COURT. HENCE, THE SE JUDGMENTS OF HON'BLE APEX COURT ALSO DO NOT RENDER ANY HELP TO THE REVENUE. 5.2 NOW WE DECIDE THE ISSUE RAISED BY THE REVENUE IN GROUND NO. 1 OF THE APPEAL. IN THIS REGARD, WE FIND THAT IN RESPECT OF LOAN OF RS.10 LAKHS FROM SHRI BISHANKUMAR AGARWAL, IT IS NOTED BY LEARNED CIT (A) IN PARA 5.2.1 OF HIS ORDER THAT IT IS ACCEPTED BY THE ASSESSING OFFICER ALSO THAT CASH TO THE EXTENT OF RS.8.75 LAKHS IN THE HANDS OF SHRI AGARWAL WAS EXPLAINED AND ON THIS BASIS , IT IS HELD BY LEARNED CIT(A) THAT TO THE EXTENT OF THIS AMOUNT OF RS.8.57 LAKHS, NO ADDITION IS JUSTIFIED ALTHOUGH HE HAS CONFIRM ED THE BALANCE ADDITION OF RS.1.43 LAKHS BECAUSE THE ASSESSEE HAS OBTAINED A LOAN OF RS.10 LAKHS FROM SHRI AGARWAL. SIMILARLY, IN RESPECT OF LOAN OF RS.2.5 LAKHS FROM SHRI RADHEY SHYAM AGARWAL, IT IS DECIDED BY LEARNED CIT(A) IN PARA 5.1.4 OF HIS ORDER TH AT OUT OF CASH DEPOSIT OF RS.2.50 LAKHS , IN HIS BANK ACCOUNT, IT HAS TO BE ACCEPTED THAT HE MUST HAVE SAVED RS.1 LAKH OVER A PERIOD OF TIME AND THEREFORE, HE ALLOWED RELIEF OF RS.1 LAKH AND CONFIRMED THE ADDITION OF RS.1.50 LAKHS. REGARDING THE THIRD LOAN OF RS.10 LAKH FROM M/S SAKSHAM CONSTRUCTION CO., IT IS OBSERVED BY LEARNED CIT(A) IN PARA 5.2 OF HIS ORDER THAT THE ASSESSEE HAD PRODUCED THE CASH BOOK OF THE LENDER, WHICH SHOWS THE REQUISITE CASH BALANCE IN THE CASH BOOK, WHICH WAS DEPOSITED IN ITS BANK ACCOUNT TO ISSUE LOAN CHEQUE TO THE ASSESSEE. HE HAS ALSO NOTED THAT THE SAME WAS PRODUCED BEFORE THE ASSESSING OFFICER BUT THE ASSESSING OFFICER DID NOT ACCEPT THE SAME ON 6 CERTAIN SURMISES AND ASSUMPTIONS, WHICH ARE NOT RELEVANT TO THE ISSUE. HE HAS AL SO OBSERVED THAT THE ASSESSING OFFICER WHILE REJECTING THE CASH BOOK PRODUCED ON BEHALF OF THE LENDER, DID NOT GIVE ANY COGENT REASONS FOR SUCH REJECTION. LEARNED D.R. COULD NOT CONTROVERT ANY OF THESE FINDING S OF LEARNED CIT(A) IN RESPECT OF THESE THREE LOAN CREDITORS AND HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LEARNED CIT(A) ON THIS ISSUE ALSO . HENCE, GROUND NO.1 IS ALSO REJECTED. AS A RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS C ROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 9 T H NOVEMBER, 2011. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. DR, ITAT, LUCKNOW ASSTT. REGISTRAR 7