GOLD ROCK INVESTMENTS LTD, MUMBAI V. DCIT 3(1), MUMBAI

ITA 7215/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100763 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 23-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 10-12-2013
• Court: TRIBUNAL
• Department Lawyers: RAKESH KUMAR AGARWAL
• Assessee Lawyers: SUNIL MEHTA
• Keywords: Opportunity of being heard; Proportionate interest; Revised return
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO. 7215/M/2013 (AY:2010 - 2011 ) M/S. GOLD ROCK INVESTMENTS LTD, 714, RAHEJA CHAMBERS, 213, NARIMAN POINT, MUMBAI 400 021. / VS. ACIT 3(1), MUMBAI - 400 020. ./ PAN :AAACG3911F ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SUNIL MEHTA, AR / RESPONDENT BY : SHRI RAKESH KUMAR AGARWAL, DR / DATE OF HEARING : 23.07.2015 / DATE OF PRONOUNCEMENT : 19 .08.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 10.12.2013 IS AGAINST THE ORDER OF THE CIT (A) - 7, MUMBAI DATED 18.9.2013 FOR THE ASSESSMENT YEAR 2010 - 2011. 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE GROUNDS OF APPEAL AND POINTED OUT THE MISTAKE CREPT IN GROUND NO.2 AND THE SAID GROUND WAS DULY MODIFIED BY INCORPORATING THE CORRECT FIGURES. THE SAID MODIFIED GROUNDS RAISED BY THE ASSESSEE READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AUTHORITIES BELOW ERRED IN DISALLOWING THE PROPORTIONATE INTEREST OF RS. 73,057/ - U/S 14A R.W. RULE 8D(2)(II) AND THE REASONS ASSIGNED FOR DOING SO ARE WRONG AND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE, PROVISIONS OF INCOME TAX ACT, 1961 AND THE IT RULES, MADE T HEREUNDER. 2. THE LD CIT (A) ERRED IN NOT ALLOWING THE APPELLANTS REVISED CLAIM FOR SHORT TERM CAPITAL LOSS OF RS. 41,59,313/ - (NORMAL SHORT TERM CAPITAL LOSS) AND RS. 13, 20,420 / - (SHORT TERM CAPITAL LOSS U/S 111A) AS AGAINST CLAIM OF RS. 29,58,696/ - AND RS. 13,05,420/ - RESPECTIVELY MADE IN RETURN OF INCOME AND THE REASONS ASSIGNED FOR DOING SO ARE WRONG AND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE, PROVISIONS OF INCOME TAX ACT, 1961 AND THE RULES MADE THEREUNDER: THE CIT (A) FAILED TO APPRECI ATE THAT HE IS DUTY BOUND TO GRANT SUCH RELIEF TO THE APPELLANT IN PROCEEDINGS BEFORE HIM. 2 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SHARE TRADING, DERIVATIVES, INVESTMENT AND MONEY LENDING. ASSESS EE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 2,09,36,850/ - . ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT THE ASSESSED INCOME WAS DETERMINED AT RS. 2,15,96,590/ - . IN THE ASSESSMENT, AO MADE CERTAIN DISALLOWANCES VIZ, (I) DISALLOWANCE OF RS. 73,057/ - UNDER SECTION 14A READ WITH RULE 8D OF THE ACT; (II) ADDITION OF RS. 5,86,680/ - ON ACCOUNT OF CESSATION OF LIABILITY U/S 41(1) OF THE ACT AND (III) DISALLOWANCE ON ACCOUNT OF CARRY FORWARD OF SHORT TERM CAPITAL LOSS OF RS. 54,79,733/ - , WHIC H WAS INCREASED FROM 42,64,116/ - CLAIMED IN THE RETURN OF INCOME. AGGRIEVED WITH THE ABOVE DECISION OF THE AO, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) PARTLY ALLOWED THE APPEAL BY CONFIRMING THE AOS DECISION IN RESPECT OF DISALLOWANCE OF RS. 73,057/ - MADE U/S 14A R.W. RULE 8D AND DISALLOWANCE ON ACCOUNT OF SHORT TERM CAPITAL LOSS. AGGRIEVED WIT H THE SAID DECISION OF THE CIT (A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 5. DURING THE PROCEEDINGS BEFORE US, REFERRING TO GROUND NO.1, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED IN TH E GROUND, IN PRINCIPLE, IS REQUIRED TO BE REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN THE LIGHT OF THE ORDER OF THE ITAT, KOLKATA BENCH IN THE CASE OF DCIT VS. MS. TRADE APARTMENT LTD IN ITA NO. 1277/KOL/2011, DATED 30.3.2011 AS WELL AS THE DE CISION OF THE ITAT, AHMEDABAD BENCH IN THE CASE OF ITO VS. KARNAVATI PETROCHEM PVT LTD IN ITA NO.2228/AHD/2012, DATED 5.7.2013, COPIES OF WHICH ARE PLACED ON RECORD. 6. ON THE OTHER HAND, LD DR FOR THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORIT IES. 7. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED ORDER OF THE KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF MS. TRADE APARTMENT LTD (SUPRA) AND THE DECISION OF THE ITAT, AHMEDABAD IN THE CAS E OF KARNAVATI PETROCHEM PVT LTD (SUPRA), WE ARE OF THE OPINION, THE TRIBUNAL HAS ADJUDICATED A N IDENTICAL ISSUE VIDE THE SAID ORDERS. CONSIDERING THE COMMONNESS OF THE ISSUE INVOLVED, IN OUR OPINION, GROUND NO.1 IS REQUIRED TO BE ADJUDICATED BY THE 3 AO I N THE SET ASIDE PROCEEDINGS CONSIDERING THE LEGAL PROPOSITIONS EXPLAINED IN THE CITED DECISIONS OF THE TRIBUNAL (SUPRA) AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ORDER ACCORDINGLY. THUS, GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN CONNECTION WITH GROUND NO.2, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REVENUE AUTHORITIES DID NOT ENTERTAIN THIS GROUND ON THE REASONING THAT THE CLAIM WAS NOT MADE IN THE ORIGINAL RETURN OF INCOME OR BY FI LING THE REVISED RETURN OF INCOME. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD VS. CIT [2006] 157 TAXAMN 1 (SC) FOR THE PROPOSITION THAT THE CLAIM SHOULD BE ENTERTAINED AND ADJUDICATED BY THE REVENUE AUTHORITIES WITHOUT REQUIRING THE ASSESSEE TO MAKE A CLAIM BY FILING THE REVISED RETURN OF INCOME. 9. ON THE OTHER HAND, LD DR FOR THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 10. AFTER HEARING BOTH THE PARTIE S AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE SAID APEX COURT JUDGMENT IN THE CASE OF GOETZE (INDIA) LTD (SUPRA), IN OUR OPINION, THIS GROUND SHOULD BE SET ASIDE TO THE FILE OF CIT (A). IN THIS REGARD, WE INFORM THE CIT (A) THAT MAKING CLAIM BY FILING A REVISED RETURN OF INCOME IS NOT REQUIRED BEFORE THE APPELLATE AUTHORITIES WHERE THE LD CIT (A) IS ONE OF THEM. THEREFORE, CONSIDERING THE STRENGTH OF THE HONBLE SUPREME COURTS JUDGMENT (SUPRA) WE DIRECT THE CIT (A) TO ADMIT THE GROUND AND ADJUDICATE THE SAME AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. CIT (A) MAY CALL FOR REMAND REPORT, IF ANY, AS PER THE SET PRINCIPLES OF LAW. THUS, GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPO SES. 11. IN THE RESULT, APPEAL OF THE ASSESSE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNC ED IN THE OPEN COURT ON 1 9 T H AUGUST, 2015. S D / - S D / - (AMIT SHUKLA) (D. KARUNAKARA RAO) JUDICIAL ME MBER ACCOUNTANT MEMBER MUMBAI ; 1 9 .8. 2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 4 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI