M/s Ess Ess Exim Private Limited, Chandigarh V. DCIT, Chandigarh

ITA 721/CHANDI/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5160 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 07-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 153A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NOS. 714 TO 717/CHD/ 2015 ASSESSMENT YEARS: 2007-08 TO 2009-10 & 2011-12 M/S EMM BEE FINCAP PRIVATE LIMITED, VS.THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH CHANDIGARH PAN NO. AABCE1496Q ITA NOS. 718 TO 719/CHD/ 2015 ASSESSMENT YEARS: 2005-06 TO 2006-07 M/S ESS ESS EXIM PVT. LIMITED, VS. THE DCIT, CENT RAL CIRCLE-1, CHANDIGARH CHANDIGARH PAN NO. AABCE1490J & ITA NOS. 721 TO 723/CHD/ 2015 ASSESSMENT YEARS: 2009-10 TO 2011-12 M/S ESS ESS EXIM PVT. LIMITED, VS. THE DCIT, CENT RAL CIRCLE-1, CHANDIGARH CHANDIGARH PAN NO. AABCE1490J (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ALOK KRISHAN RESPONDENT BY : SH. SUSHIL KUMAR 2 DATE OF HEARING : 12.04.2017 DATE OF PRONOUNCEMENT : 02.06.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEALS HAVE BEEN PREFERRED BY THE TWO ASSESSEES AGAINST THE SEPARATE ORDERS OF THE PRINCIPAL COMMISSIONER O F INCOME TAX (OSD) [HEREINAFTER REFERRED TO AS PCIT], GURGAON DATED 27.02.2015. 2. SINCE COMMON ISSUE IS INVOLVED IN ALL THE APPEAL S, HENCE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. THE SOLE ISSUE INVOLVED IN THESE APPEALS IS AS T O WHETHER THE INCOME ARISING OUT OF TRANSACTIONS IN SHARES AND SECURITIE S IS TO BE TREATED AS INCOME FROM CAPITAL GAINS OR BUSINESS INCOME OF THE ASSESSEE. THE ASSESSING OFFICER TREATED THE LOSS SHOWN BY THE ASS ESSEE OUT OF TRANSACTIONS IN SHARES AND SECURITIES AS BUSINESS LOSS AS AGAINS T THE CLAIM OF THE ASSESSEE OF SHORT TERM CAPITAL LOSS. 4. AT THE OUTSET, THE LD. AR OF THE ASSESSEE HAS BR OUGHT TO OUR ATTENTION TO A CIRCULAR OF THE CBDT. NO. 225/12/2016/ITA.11 D ATED 2 MAY 2016 WHICH FOR THE SAKE OF CONVENIENCE IS PLACED AS UND ER:- 3 5. THE LD. AR HAS FURTHER STATED THAT THE TRANSACTI ONS IN QUESTION WAS DONE BY THE ASSESSEE IN UNLISTED SHARES, THEREFORE, AS PER THE CIRCULAR OF THE CBDT WHICH IS CLARIFICATORY IN NATURE, THE LOSS FROM THE ABOVE TRANSACTIONS IS REQUIRED TO BE TREATED AS CAPITAL LOSS AND NOT AS BUSINESS L OSS OF THE ASSESSEE. 4 6. THE LD. DR, ON THE OTHER HAND, HAS INVITED OUR A TTENTION TO THE IMPUGNED ASSESSMENT ORDER DATED 30.3.2013 OF THE ASSESSING O FFICER IN RELATION TO THE ASSESSMENT YEAR 2007-08 AND HAS SUBMITTED THAT THE ASSESSEE HAD PRODUCED NO EVIDENCE BEFORE THE ASSESSING OFFICER TO PROVE THE NATURE AND GENUINENESS OF THE TRANSACTIONS IN RELATION TO THE ABOVE STATED CLAIM OF THE CAPITAL LOSS. 7. WE HAVE GONE THROUGH THE IMPUGNED ORDER OF THE A SSESSING OFFICER. IT IS EVIDENT THAT THE ASSESSEES HAVE NOT PRODUCED THE RE LEVANT EVIDENCES BEFORE THE ASSESSING OFFICER TO PROVE THE GENUINENESS OF THE T RANSACTIONS IN QUESTION. WE HAVE ALSO GONE THROUGH THE ABOVE REPRODUCED CIRCULA R OF THE CBDT WHICH IS CLARIFICATORY IN NATURE GUIDING THE ASSESSING OFFIC ER FOR FORMATION OF VIEW FOR THE PURPOSE OF CONSISTENCY IN TAXABILITY OF INCOME / LOSSES ARISING FROM TRANSFER OF UNLISTED SHARES. IN OUR VIEW THE ABOVE, ISSUE R EQUIRES TO BE LOOKED INTO AFRESH BY THE ASSESSING OFFICER IN THE LIGHT OF THE ABOVE REPRODUCED CIRCULAR DATED 2.5.2016. BOTH THE LD. REPRESENTATIVES OF TH E PARTIES HAVE ALSO SUBMITTED THAT THE MATTER TO BE RESTORED TO THE ASSESSING OFF ICER FOR CONSIDERATION AFRESH. WE ACCORDINGLY RESTORE THIS ISSUE TO THE FILE OF TH E ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE ISSUE AFRESH. THE ASSESSIN G OFFICER IS DIRECTED TO EXAMINE THE GENUINENESS OF THE TRANSACTIONS IN SHAR ES AS CLAIMED BY THE ASSESSEE AND THEN TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE CIRCULAR OF CBDT DATED 2.5.2016. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE THE RELEVANT EVIDENCES BEFORE THE ASSESSING OFFICER TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS IN QUESTION. ALL THE APPEALS ARE ACCORDINGLY RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH THE ABOVE DIRECTIONS. 8. BEFORE PARTING WITH THE ORDER, WE MAY MENTION HE RE THAT IN THEIR GROUNDS OF APPEAL, THE ASSESSEES HAVE ALSO AGITATED THE VAL IDITY OF THE ASSESSMENT ORDER PASSED U/S 153A READ WITH SECTION 143 OF THE ACT. T HE ASSESSEE HAS ALSO RAISED 5 THE PLEA OF VIOLATION OF PRINCIPLE OF NATURAL JUSTI CE FOR NOT GRANTING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. HOWEVER, NO ARGUMENT HAVE BEEN ADVANCED IN RELATION TO THE ABOVE STATED PLEAS, HEN CE, THESE PLEAS OF THE ASSESSEES ARE DISMISSED. 9. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE, THEREFORE, TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 02.06.2017 SD/- SD/- (DR B.R.R. KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : APRIL, 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 6