DCIT 10(1), MUMBAI V. CAREVIEW INVESTMENTS & TRADING P.LTD, MUMBAI

ITA 757/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100581 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 03-02-2014
• Court: TRIBUNAL
• Department Lawyers: UDAYA BHASKAR JAKKE
• Keywords: Business income
• Section: 143(3); 263; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO. 757/M/2014 (AY:2006 - 2007 ) DCIT - 10(1), 455, AAYAKAR BHAVAN, 4 TH FLOOR, M.K. MARG, MUMBAI. / VS. M/S. CAREVIEW INVESTMENTS & TRADING P. LTD., 908, STOCK EXCHANGE TOWER, DALAL STREET, FORT, MUMBAI - 01. ./ PAN : AAACC2088B ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI UDAYA BHASKAR JAKKE / RESPONDENT BY : SHRI HARIDAS BHAT / DATE OF HEARING : 14.07.2015 / DATE OF PRONOUNCEMENT : 12 .08.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 3.2.2014 IS AGAINST THE ORDER OF THE CIT (A) - 21, MUMBAI DATED 25.11.2013 FOR THE ASSESSMENT YEAR 2006 - 2007. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1(I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DELETING THE ADDITIONS MADE BY THE AO WHILE GIVING EFFECT TO THE ORDER OF THE CIT PASSED U/S 263 OF THE ACT. 1(II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN TREATING THE INCOME FROM SALE OF SHARES AS SHORT TERM CAPITAL GAIN (STCG) AS AGAINST BUSINESS INCOME HELD BY THE AO. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS.1.6 CRS (ROUNDED - OF). T HE SAME W AS SCRUTINIZED U/S 143(3) OF THE ACT DETERMINED THE ASSESSED INCOME AT RS. 1,61,86,640/ - . IN THE RETURN , THE ASSESSEE OFFERED THE GAINS EARNED ON SALE OF SHARES AS LONG TERM CAPITAL GAINS AND THE SAME WAS ACCEPTED BY THE ASSESSING OFFICER WHILE MAKING THE REGULAR ASSESSMENT. SUBSEQUENTLY, LD CIT INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT AND PASSED THE REVISION ORDER DIRECTING THE AO TO TREAT THE SAID GAINS AS SHORT TERM CAPITAL GAINS . GIVING EFFECT TO THE SAID ORDER OF 2 THE CIT U/S 263 OF THE A CT, AO PASSED FRESH ASSESSMENT ORDER U/S 143(3) R.W.S 263 OF THE ACT ON 8.12.2011 AND TREATED THE SAID GAINS AS BUSINESS INCOME AND PARA 4 OF THE ASSESSMENT ORDER IS RELEVANT . MEANWHILE, REVISION ORDER OF THE CIT WAS AGITATED BY THE ASSESSEE BEFORE THE TRIBUNAL. AFTER HEARING, THE TRIBUNAL QUASHED THE REVISION ORDER OF THE CIT VIDE APPEAL ITA NO.553/M/2012 FOR THE AY 2006 - 07, DATED 31.10.2013 HOLDING THAT IT IS A CASE OF TAKING OTHER VIEW BY THE CIT, WHICH IS DIFFERENT FROM THAT OF THE VIEW TAKEN BY THE AO . PARA 9 OF THE SAID ORDER OF THE TRIBUNAL IS RELEVANT, WHEREBY, THE ORIGINAL ORDER OF THE AO WAS RESTORED BY THE TRIBUNAL. THEREFORE, THE SAID REVISIONS ORDER OF THE CIT NO LONGER EXISTS. MEANWHILE, THE FRESH ASSESSMENT ORDER OF THE AO ALSO REACHED THE FIRST APPELLATE AUTHORITY , AND THE CIT (A) PASSED THE IMPUGNED ORDER DATED 25.11.2013 AND ALLOWED THE APPEAL OF THE ASSESSEE AND QUASHED THE SAID FRESH ASSESSMENT ORDER BY RELYING ON THE SAID ORDER OF THE TRIBUNAL (SUPRA) ON REVISION ORDER OF THE CIT . RELEVANT LINES OF THE CIT (A) S ORDER ARE REPRODUCED AS UNDER: THE HONBLE ITAT HELD THAT AO HAD TAKEN VIEW WHICH IS LEGALLY PERMISSIBLE, HENCE, SET ASIDE THE ORDER U/S 263 OF THE CIT - 10, MUMBAI. SINCE, HONBLE ITAT HAD SET ASIDE THE ORDER OF THE CIT - 10, MUMBAI, ASSESSMENT PASSED BY THE AO WILL NOT SURVIVE AND THE AD DITION MADE BY THE AO IS DELETED. AGGRIEVED WITH THE SAID ORDER OF THE CIT (A), REVENUE IS IN APPEAL BEFORE US. 3. DURING THE PROCEEDINGS BEFORE US, LD DR FOR THE REVENUE FAIRLY SUBMITTED THAT THE REVENUE HAS NO CASE AS THE TRIBUNAL HAS QUASHED THE REV ISION ORDER OF THE CIT - 10, MUMBAI . C ONSEQUENTLY , THE FRESH ASSESSMENT ORDER DOES NOT HAVE LEGS TO STAND. ACCORDINGLY, THE CIT (A) HAS RIGHTLY DELETED THE ADDITION ON TECHNICAL GROUNDS. HOWEVER, HE DUTIFULLY RELIED ON THE GROUNDS RAISED IN THE APPEAL. 4. ON THE OTHER HAND, ON THE TECHNICAL GROUNDS, LD COUNSEL FOR THE ASSESSEE IS CRITICAL OF THIS VEY FILING OF APPEAL BY THE REVENUE WHEN REVISION ORDER OF THE CIT IS QUASHED BY THE TRIBUNAL . HE MENTIONED THAT THE CIT, WHO AUTHORIZED THE APPEAL, WAS WELL AWA RE OF THE EXISTENCE OF THE SAID ORDER OF THE TRIBUNAL (SUPRA). IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO THE AUTHORIZATION M EMO DATED 15.1.2014 OF THE CIT - 10, MUMBAI AND THE ORDER OF THE TRIBUNAL DATED 31.10.2013. WHEN THE REVISION ORDER U/S 26 3 OF THE ACT IS QUASHED BY THE TRIBUNAL ON 31.10.2013 ITSELF, THE CONSEQUENTIAL FRESH ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 3 263 OF THE ACT DOES NOT SURVIVE. CIT (A) RIGHTLY CONSIDERED THIS FACT AND GRANTED RELIEF TO THE ASSESSEE. BUT, CIT - 10 AUTHORIZ ED THE APPEAL UNNECESSARILY. F URTHER, LD COUNSEL MENTIONED THAT THIS APPEAL IS FILED MECHANICALLY WITHOUT APPLICATION OF MIND. 5. ON HEARING BOTH THE PARTIES ON MERITS, WE FIND THE TRIBUNAL HAS ALREADY QUASHED THE REVISION ORDER OF THE CIT - 10, MUMBAI AND RESTORED THE REGULAR ASSESSMENT ORDER OF THE AO. THEREFORE, IN OUR OPINION, THE CIT (A) HAS RIGHTLY ADJUDICATED THE APPEAL OF THE ASSESSEE AND THE SAME DOES NOT CALL FOR ANY INTERFERENCE. 6. BEFORE CONCLUDING THE ORDER, WE FIND IT RELEVANT TO OBSERVE ON THIS KIND OF FRIVOLOUS , M E R I T L E S S AND UNNECESSARY APPEALS FILED BY THE REVENUE. WE DO NOT UNDERSTAND WHY THIS APPEAL IS AUTHORIZED BY THE CIT - 10 AND FILED BY HIS AO. T H E S A I D A U T H O R I Z A T I O N C O N S T I T U T E S A M O C K E R Y A T T H E V E R Y S Y S T E M O F F I L I N G A P P E A L S . IT IS AN OBVIOUS FACT THAT NO FRESH ASSESSMENT ORDER U/S 143(3) R.W.S 263 OF THE ACT SURVIVES ONCE A REVISION ORDER OF THE CIT IS HELD UNSUSTAINABLE IN LAW BY THE HONBLE TRIBUNAL. SHOULD THE CIT IS ALLOWED TO AUTHORISE THE APPEAL RELATING TO FRESH ASSESSMENT ORDER WHEN REVISION ORDER U/S 263 OF THE ACT IS HELD UNSUSTAINABLE IN LAW? IT IS UNFORTUNATE THAT THE FRIVOLOUS APPEALS OF THIS KIND ARE AUTHORIZED B Y T H E C I T , W H O I S A W A R E O F F A T E O F S U C H A P P E A L S . ACCORDINGLY, THIS APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCE D IN THE OPEN COURT ON 1 2 T H AUGUST, 2015. S D / - S D / - (AMIT SHUKLA) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 1 2 .8 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 4 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI