PRAJATMA TRADING CO. P.LTD, MUMBAI V. CIT -7, MUMBAI

ITA 7597/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9540 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 27-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Assessee Lawyers: DALPAT SHAH WITH B S SHARMA
• Keywords: Business income; Period of limitation; Speculation loss; Difference of opinion; Corroborative evidences; Condonation of delay; Change of opinion
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C, MU MBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.7597/MUM/2016 (ASSESSMENT YEAR- 2006-07) PRAJATMA TRADING CO. PVT. LTD. (NOW MERGED WITH SPRIT TEXTILES PVT. LTD. W.E.F.01.10.2012), 18 TH FLOOR, A WING, MARATHON FUTUREX, N.M. JOSHI MARG, LOWER PAREL, MUMBAI-400013 PAN: AAACP8386K VS. CIT-7, ROOM NO. 620, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020. (APPELLANT) (RESPONDENT) ITA NO.2546/MUM/2013 (ASSESSMENT YEAR- 2006-07) PRAJATMA TRADING CO. PVT. LTD. (NOW MERGED WITH SPRIT TEXTILES PVT. LTD. W.E.F.01.10.2012), 135, CONTINENTAL BUILDING, DR. AB. ROAD, MUMBAI-400018 PAN: AAACP8386K VS. DCIT- , CIRCLE 7(1), 6 TH FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DALPAT SHAH WITH B.S. SHARMA (AR) REVENUE BY : SHRI H.N. SINGH (CIT-DR) DATE OF HEARING : 28.08.2017 DATE OF PRONOUNCEMENT : 15.09.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THESE TWO APPEAL BY ASSESSEE UNDER SECTION 253 OF T HE INCOME-TAX ACT (THE ACT) ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-1 3, MUMBAI DATED ITA NO.7597 M 16 & 2546 M 13- PRAJ ATMA TRADING CO. PVT. LTD. 2 14.01.2013 AND LD. CIT-7, MUMBAI DATED 29.11.2011 R ESPECTIVELY FOR THE ASSESSMENT YEAR (AY) 2006-07. 2. FIRST WE ARE TAKING THE APPEAL ITA NO. 7597/MUM/201 6. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1 ORDER U/SEC 263 : 1.1. THE HON'BLE COMMISSIONER OF INCOME TAX-7, (FOR BREVITY 'THE CIT-7') ERRED IN LAW, ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, IN INVOKING AND PASSING AN ORDER DATED 29/03/2011 UNDER SECTION 263 OF THE INCOME TAX ACT 1961 ON THE GROUND THAT THE ORDER U/SEC 143(3) DATE D 11/12/2008 PASSED BY THE DY.C.I.T. CIR.7(1) ,MUMBAI (FOR BREVITY' A.O.'), IS 'ERRONEOUS AND PREJUDICIAL' TO THE INTEREST OF REVENUE' AS THE APPELLANT HAD NO T CARRIED OUT ANY BUSINESS DURING THE YEAR AND THEREFORE ERRED IN ALLOWING BUS INESS EXPENSES AND LOSSES AGAINST INCOME FROM OTHER SOURCES AND CAPITAL GAIN. 1.2. THE SAID NOTICE U/SEC 263 OF THE ACT, IS VOID AND WITHOUT ANY JURISDICTION AS PROVIDED IN CLAUSE ( C) TO THE EXPLANATION 1 TO SEC 263 AS AN APPEAL AGAINST THE ORDER PASSED U/SEC 143(3) WAS PENDING BEFORE TH E HON'BLE ITA TRIBUNAL AND THE SAID CIT-7 ISSUED NOTICE U/SEC 263 ON 01/02 /2011 ,I.E., AFTER RECEIPT OF ORDER OF HON'BLE C.I.T.(APPEALS) DATED 09/06/2010. 1.3. WITHOUT PREJUDICE, THE SAID ORDER U / SEC 263 IS TO BE SET ASIDE AS THE SAID A.O. HAD ELABORATELY CONSIDERED THE FACTS, DOCUMENT S AND ASSESSMENT ORDER OF PRECEDING ASSESSMENT YEARS WHILE PASSING HIS ORDER U / SEC 143(3) AND AFTER APPLICATION OF HIS MIND TAKEN A VIEW TO ALLOW THE B USINESS EXPENDITURE AND ALLOWED TO SET-OFF BUSINESS LOSSES DURING THE YEAR AGAINST CAPITAL GAIN INCOME. THE SAID CIT-7 ERRED IN MISINTERPRETING THE DECISIO N OF SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. V/S CIT 243 ITR 83 WHEREIN IT WAS HELD THAT WHEN TWO VIEWS ARE POSSIBLE THEN IT CANNOT BE CALLED AN ORDER PREJUDICIAL TO THE REVENUE. 3. THE PERUSAL OF FORM 36 REVEALS THAT THE IMPUGNED ORDER WAS PASSED BY LD. CIT-7 ON 29.03.2011 AND THE APPEAL WAS FILED ON 27. 12.2006 . THE APPEAL IS APPARENTLY BARRED BY 2033 DAYS OF PERIOD OF PRESCRI BED PERIOD OF LIMITATION. IN SUPPORT OF APPLICATION FOR CONDONATION OF DELAY, THE ASSESSEE HAS FILED AN AFFIDAVIT OF MR. VINAY KUMAR AGARWAL, DIRECTOR OF T HE ASSESSEE-COMPANY. IN THE AFFIDAVIT, THE ASSESSEE CONTENDED THAT ASSES SMENT ORDER U/S 143(3) WAS PASSED ON 11.12.2008. AGGRIEVED BY THE ADDITION IN THE ASSESSMENT ORDER ITA NO.7597 M 16 & 2546 M 13- PRAJ ATMA TRADING CO. PVT. LTD. 3 DATED 11.12.2008, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) AND THE SAME WAS DISMISSED VIDE ORDER DATED 09.06.2010. FUR THER, AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE ITAT ON 10.11.2010 IN ITA NO. 7725/MUM/2010. SUBSEQUENTLY, THE ASSESSMENT ORDER W AS REVISED BY LD. CIT VIDE ORDER DATED 29.03.2011. THE LD. CIT WHILE SETT ING-ASIDE THE ORDER PASSED U/S 143(3) DATED 11.12.2008 DIRECTED THE ASS ESSING OFFICER (AO) TO PASS THE ASSESSMENT ORDER AFRESH. THE ASSESSEE HAS NOT FILED ANY APPEAL IMMEDIATELY ON PASSING THE ORDER DATED 29.03.2011 O N THE GOOD FAITH AND BELIEF THAT ORDER U/S 263 IS MERELY DIRECTION TO TH E AO. FURTHER, ASSESSMENT ORDER U/S 143(3) R.W.S. 263 WAS PASSED ON 31.10.201 1. AGAINST THE ORDER DATED 30.10.2011, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) AND THE SAME WAS DISMISSED ON 28.012.2012. AND THAT THE A SSESSEE HAS ALREADY FILED APPEAL BEFORE THE TRIBUNAL IN ITA NO. 2546/MU M/2013 (LISTED ALONG WITH THIS APPEAL). THE ASSESSEE FURTHER PLEADED THA T ON 07.11.2016 WHEN THE APPEAL ITA NO. 2546/MUM/2013 WAS LISTED ON 07.11.20 16, THE MEMBER OF THIS BENCH ASKED THE ASSESSEE AS TO WHY THE APPEAL AGAINST THE ORDER PASSED U/S 263 DATED 29.03. 2011. THE LD. AR OF THE ASSES SEE EXPLAINED THE REASON OF NOT FILING UNDER THE BONAFIDE. THE DEPONENT FURT HER CONTENDED THAT THE MEMBER OF THIS BENCH DIRECTED THEM TO FILE APPEAL A ND TO PRAY FOR CONDONATION OF DELAY. THUS THE APPEAL IS FILED ALON G WITH THE CONDONATION OF DELAY. ITA NO.7597 M 16 & 2546 M 13- PRAJ ATMA TRADING CO. PVT. LTD. 4 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENU E ON THE APPLICATION FOR CONDONATION OF DELAY AND PERUSED THE MATERIAL AVAIL ABLE ON RECORD. THE LD. AR OF THE ASSESSEE ARGUED ON THE SIMILAR LINE AS CO NTENDED IN THE AFFIDAVIT. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE STRON GLY OBJECTED THE GROUNDS TAKEN IN THE APPLICATION FOR CONDONATION OF DELAY. THE LD. DR FOR THE REVENUE ARGUED THAT THE ASSESSEE HAS MADE A BASELES S DEPOSITION IN THE AFFIDAVIT ABOUT THE DIRECTION OF THE MEMBER OF THIS BENCH. THE LD. DR FOR THE REVENUE ARGUED THAT THERE IS INORDINATE DELAY OF 20 33 DAYS IN FILING THE APPEAL AGAINST THE ORDER U/S 263. THE ASSESSEE IS A CORPORATE ENTITY ASSOCIATED WITH CORPORATE GROUPS, HAVE BEEN REPRESE NTED BY PROFESSIONALLY QUALIFIED REPRESENTATIVE BEFORE VARIOUS AUTHORITIES DURING THE ASSESSMENT, FIRST APPELLATE STAGE AS WELL AS BEFORE THE TRIBUNA L. THE ASSESSEE CANNOT CLAIM THE IGNORANCE OF THE PROVISIONS OF LAW AND TA KE THE LIMITATION ISSUE SO CASUALLY. IN SUPPORT OF THIS SUBMISSION, THE LD. AR OF THE ASSESSEE RELIED UPON THE DECISION OF HONBLE APEX COURT IN CASE OF ESHA BHATTACHARGEE VS. MANAGING COMMITTEE OF RAGHUNATHPUR NAFAR ACCADEMY ( 2013 5 CTC 547. IN ADDITION TO THE SUBMISSION, THE LD. DR FOR THE R EVENUE FILED WRITTEN SYNOPSIS OPPOSING THE APPLICATION OF CONDONATION OF DELAY. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE FURTHER PERUS ED THE ORDER-SHEET DATED ITA NO.7597 M 16 & 2546 M 13- PRAJ ATMA TRADING CO. PVT. LTD. 5 07.11.2016 IN ITA NO.2546/M2013. THE PERUSAL OF ORD ER-SHEET IN ITA NO. 2546/MUM/2013 REVEALS THAT THIS APPEAL WAS LISTED B EFORE THIS COMBINATION (CONSISTING OF BOTH LD. ACCOUNTANT MEMBER AND JUDIC IAL MEMBER). THE ORDER-SHEET FURTHER REVEALS THAT THE ASSESSEE REQUE STED FOR ADJOURNMENT AND THE MATTER WAS SIMPLY ADJOURNED FOR 20.02.2017. THE CONTENTION DEPOSED IN THE AFFIDAVIT IS CONTRARY TO THE RECORD. EVEN OTHER WISE, THE BENCH HAS NO BUSINESS TO ADVISE OR DIRECT THE PARTIES TO OR NOT TO FILE APPEAL AGAINST PARTICULAR ORDER. THE ASSESSEE HAS NOT DISCLOSED AN Y REASON EXCEPT MENTIONING OF GENUINE BELIEF AND THEIR IMPRESSION T HAT ORDER U/S 263 IS MERELY A DIRECTION. IN OUR CONSIDERED VIEW, THE ASS ESSEE HAS NOT EXPLAINED SUFFICIENTLY THE CAUSE OF DELAY IN FILING THE PRESE NT APPEAL. THE ASSESSEE FAILED TO EXPLAIN AS TO WHY THE ASSESSEE WAS PREVEN TED IN FILING THE APPEAL WITHIN PERIOD OF LIMITATION. MOREOVER, THE CONTENTI ONS REGARDING THE ADVICE OF MEMBER ARE BASELESS. 6. NO DOUBT THAT THERE SHOULD BE A LIBERAL, PRAGMATIC, JUSTICE ORIENTED APPROACH WHILE DEALING WITH THE APPLICATION FOR CONDONATION OF DELAY. THE SUFFICIENT CAUSE FOR CONDONATION OF DELAY MUST BE UNDERSTOOD I N A PROPER SPIRIT AND PHILOSOPHY AND THE PURPOSE BEHIND THE LEGISLATIVE I NTEND. THE CONCEPT OF LIBERAL APPROACH MUST BE WEIGH WITH THE CONCEPTION OF REASONABLENESS AND SHOULD NOT BE ALLOWED AS A TOTAL UNFETTERED FREE PL AY. THE PARTIES SEEKING CONTENTION OF DELAY MUST SHOW BONAFIDIES AND REASON ABLENESS WITH THE ITA NO.7597 M 16 & 2546 M 13- PRAJ ATMA TRADING CO. PVT. LTD. 6 GROUND OF CONDONATION OF DELAY. THE PARTIES SHOULD NOT ADOPT UNREASONABLE AND TOTALLY UNFETTERED FREE PLAY WHILE SEEKING THE CONDONATION OF DELAY. IN OUR VIEW, THE ASSESSEE FAILED TO EXPLAIN THE CAUSE OF CONDONATION OF DELAY, THE REASONS DISCLOSED BY THE ASSESSEE IS NOT PLAUSI BLE ONE. HENCE, THE APPLICATION FOR CONDONATION OF DELAY BY THE ASSESSE E IS DISMISSED. IN THE RESULT, APPEAL OF THE ASSESSEE IS NOT ADMITTED AND THUS, DISMISSED BEING TIME BARRED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO. 2546/MUM/2013 8. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THE COMMISSIONER OF INCOME TAX (APPEALS) 13, MUM BAI, (HEREINAFTER REFERRED TO AS LD. CIT A') HAS ERRED IN LAW, ON FAC TS AND IN THE CIRCUMSTANCES OF THE CASE IN NOT SETTING ASIDE THE ASSESSMENT ORDER DT. 31.10.2011 PASSED UNDER SECTION 143(3) R.W.S 263 (THE SAID ORDER') OF THE I NCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') BY THE DEPUT Y COMMISSIONER OF INCOME TAX 7(1),6TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBA I-400020 (HEREINAFTER REFERRED TO AS LITHE A.O.'). 2. THE CIT A' HAS ERRED IN LAW, ON FACTS AND IN TH E CIRCUMSTANCES OF THE CASE IN NOT SETTING ASIDE THE SAID ORDER BEING BEYOND JU RISDICTION SINCE BASED ON CHANGE OF OPINION OF THE LD CIT-7 AND FOLLOWED BY T HE LD A.O., AND EVEN THE PROVISIONS OF SECTION 263 OF THE ACT WAS WRONGLY IN VOKED AND INITIATION OF THE PROCEEDINGS UNDER THE SAID SECTION IS VOID AB-INITI O. 3. THE CIT A' HAS ERRED IN LAW, ON FACTS AND IN TH E CIRCUMSTANCES OF THE CASE IN ACCEPTING THE GROUNDS FOR INITIATION OF THE PROC EEDINGS UNDER SECTION 263 OF THE ACT, AS WHILE PASSING ASSESSMENT ORDER U/S 143( 3) DT 11.12.2008 ALL THE FACTS AND LAW HAD BEEN CONSIDERED BY THE A.O., HENC E SUCH PROCEEDINGS FOR REOPENING WAS BAD IN LAW AND VOID AB-INITIO. WITHOUT PREJUDICE: 4. THE CIT A' HAS ERRED IN LAW, ON FACTS AND IN TH E CIRCUMSTANCES OF THE CASE IN CONCLUDING AND CONFIRMING THAT THE APPELLANT SIN CE NOT CARRIED OUT BUSINESS DURING THE YEAR, THEREBY DISALLOWING ALL THE EXPENS ES, NOT ALLOWING ADJUSTMENT OF BROUGHT FORWARD LOSSES, IGNORING THE FACT OF THE PRECEDING YEARS WHEREIN THE DEPARTMENT HAD ASSESSED THE INCOME UNDER THE HEAD ' PROFITS OR GAINS FROM BUSINESS OR PROFESSION'. 5. THE CIT A' HAS ERRED IN LAW, ON FACTS AND IN TH E CIRCUMSTANCES OF THE CASE IN NOT CONSIDERING BUSINESS LOSS OF RS.11,01,65,651 BEFORE ADJUSTING THE CAPITAL ITA NO.7597 M 16 & 2546 M 13- PRAJ ATMA TRADING CO. PVT. LTD. 7 GAINS OF RS.2,17,30,800/- AS ASSESSED BY HIS PREDEC ESSOR A.O., VIDE ASSESSMENT ORDER U/S 143(3) DT 11.12.2008 AND ASSESSING INCOME UNDER THE HEAD CAPITAL GAINS AND INCOME FROM OTHER SOURCES. 6. THE CIT A' HAS ERRED IN LAW, ON FACTS AND IN TH E CIRCUMSTANCES OF THE CASE IN ASSESSING INCOME FROM DIVIDEND AS INCOME FROM OT HER SOURCE INSTEAD OF BUSINESS INCOME, AS DONE THE IN PRECEDING AND SUCCE EDING ASSESSMENTS. 7. THE 'CIT A' ERRED IN LAW, ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, IN ACCEPTING THE CONCLUSION BY THE A.O., THAT NO BU SINESS ACTIVITIES WERE CARRIED OUT DURING THE YEAR AND THEREBY DISALLOWING LOSS OF RS.11,01,65,651 AS ARRIVED BY THE PREDECESSOR A.O., VIDE HIS ORDER U/S 143(3) DT 11.12.2008. 8. THE 'CIT A' ERRED IN LAW, ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, IN ACCEPTING A.O.,' S ASSESSMENT OF VARIOUS INCOMES UNDER THE HEAD 'INCOME FROM OTHER SOURCES' THAN INCOME FROM BUSINESS AS WA S ORIGINALLY DONE IN THE ASSESSMENT ORDER U/S 143(3) DT 11.12.2008. 9. THE 'CIT A' ERRED IN LAW, ON FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE IN ACCEPTING THE CONCLUSION OF THE A.O., THAT ALL T HE LOANS AND ADVANCES GIVEN BY THE APPELLANT WERE NOT FOR BUSINESS OF THE APPEL LANT ON THE ONE HAND AND STATES THAT THE ASSESSEE COMPANY IS A LOAN COMPANY AND IS ALSO ENGAGED IN TRADE AND INVESTMENTS IN GOODS AND SECURITIES FOR W HICH THE FUNDS ARE UTILIZED. 10. THE APPELLATE CRAVE LEAVE TO ADD, ALTER, MODIFY OR SUBMIT, RE SUBMIT AFRESH ANY OR ALL THE GROUNDS OF APPEAL OR ANY SUPPORTING EVIDENCES OR AS MAY BE REQUIRED IN CONNECTION WITH THE GROUNDS HEREIN OF A PPEAL ON OR BEFORE HEARING OF THE SAME. 9. BRIEF FACTS OF THE CASE ARE THAT THE FILED RETURN O F INCOME FOR RELEVANT AY ON 31.10.20107 DECLARING TOTAL LOSS OF RS. 23,60,12,39 9/-. THE ASSESSMENT WAS COMPLETED ON 11.12.2008 ASSESSING NET LOSS OF RS. 8 ,74,66,576/-. SUBSEQUENTLY, THE ASSESSMENT WAS REVISED BY LD. CIT VIDE ORDER DATED 29.03.2011. THE LD. CIT WHILE PASSING ORDER UNDER S ECTION 263 HELD THAT THE AO HAD NOT CONSIDERED THE ISSUE OF HEAD OF INCOME UNDER WHICH THE INCOME WAS OFFERED BY ASSESSEE FOR ASSESSMENT. IN PURSUANCE OF DIRECTION OF LD. CIT U/S 263 OF THE ACT. THE AO PASSED ORDER U/S 143(3) R.W.S. 263 OF THE ACT ( DUE TO TYPING MISTAKE MENTIONED U/S. 254). TH E AO ASSESSED THE INTEREST INCOME OF RS. 66,222/-, COMMITMENT CHARGES OF RS. 3,31,695/- AND DIVIDEND INCOME OF RS. 2,17,30,800/- UNDER THE HEAD INCOME FROM OTHER ITA NO.7597 M 16 & 2546 M 13- PRAJ ATMA TRADING CO. PVT. LTD. 8 SOURCES. AS THERE WAS NO BUSINESS INCOME DURING TH E YEAR, THUS, THE ASSESSEES CLAIM FOR SETTING OFF OF BROUGHT FORWARD BUSINESS LOSS, SPECULATION LOSS WAS NOT ALLOWED BY AO. ON APPEAL B EFORE THE LD. CIT(A) THE ACTION OF AO WAS SUSTAINED. THUS, FURTHER AGGRI EVED BY THE ORDER OF LD. CIT (A) THE ASSESSEE FILED THE PRESENT APPEAL BEFOR E US. 10. WE HAVE HEARD THE LD. AR OF THE ASSESSEE AND LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. A R OF THE ASSESSEE SUBMITTED THAT GROUND NO.1 TO 3 RELATES TO THE ORDE R U/S 263 OF THE ACT AND CANNOT BE RAISED IN THE PRESENT APPEAL AND THUS, TH ESE GROUND OF APPEAL ARE NOT PRESSED. FURTHER, GROUNDS NO. 4 TO 6 ARE GENERA L AND NEEDS NO SPECIFIC ADJUDICATION. CONSIDERING THE CONTENTION OF LD. AR OF THE ASSESSEE, GROUNDS NO. 1 TO 6 IS DISMISSED. 11. GROUND NO. 7, 8 & 9 RELATES TO DISALLOWANCE OF LOS S AS NO BUSINESS ACTIVITY IS CARRIED OUT BY THE ASSESSEE DURING THE RELEVANT AY. THE LD. AR OF THE ASSESSEE ARGUED THAT THE ORDER U/S 143(3) WAS COMPL ETED ON 11.12.2008 ASSESSING BUSINESS LOSS OF RS. 11,01,65,651/- BEFOR E SETTING-ASIDE OF LONG TERM CAPITAL GAIN AS AGAINST THE BUSINESS LOSS OF R S. 13,46,68,476/-. THE AO DISALLOWED INTEREST EXPENDITURE OF RS. 2,35,30,7 15/- OUT OF TOTAL INTEREST EXPENDITURE CLAIM OF RS. 15,05,69,831/- FOLLOWING T HE ORDER FOR PRECEDING YEAR I.E. AY 2005-06, THE ASSESSEE FILED APPEAL BEF ORE THE LD. CIT(A) AGAINST THE ORDER. THE LD. CIT(A) CONFIRMED THE ORIGINAL A SSESSMENT ORDER U/S ITA NO.7597 M 16 & 2546 M 13- PRAJ ATMA TRADING CO. PVT. LTD. 9 143(3) VIDE ORDER DATED 09.06.2010. FURTHER, AGGRIE VED, THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL VIDE ITA NO. 7725/MUM/20 10. THE APPEAL OF THE ASSESSEE WAS DECIDED BY TRIBUNAL BY ORDER DATED 04. 03.2016 AND ALL THE ISSUE RAISED IN THE APPEAL IS RESTORED BACK TO THE FILE OF AO WITH THE DIRECTION TO DECIDED AFRESH. IT WAS ARGUED THE LD. CIT REVIS ED THE ORDER PASSED UNDER SECTION 143(3) HOLDING IT THE PREJUDICIAL TO THE IN TEREST OF REVENUE AS NO BUSINESS WAS CARRIED OUT DURING THE AY 2006-07 AND ENTIRE INTEREST EXPENDITURE OF RS. 15,05,69,831/- WAS ORDERED TO BE DISALLOWED. IT WAS FURTHER ARGUED THAT THE ASSESSEE IS A NON-BANKING F INANCE COMPANY AND WAS ALSO CARRYING BUSINESS OF SHARE TRADING, SPECULATIO N AND FINANCE. THERE WAS A TEMPORARY LULL IN THE SHARE TRADING BUSINESS DUE TO MARKET CONDITION WHICH DOES NOT TANTAMOUNT TO CLOSING THE BUSINESS OF SHAR E TRADING. THE MERE FACT THAT THE ASSESSEE NOT ENGAGED DUE TO BAD MARKET CON DITION CANNOT BE TREATED AS THERE WAS NO BUSINESS ACTIVITY. ON THE OTHER HAN D THE LD DR FOR THE REVENUE SUPPORTED THE ORDER OF THE AUTHORITIES BELO W. IT WAS FURTHER ARGUED THAT THERE IS NO EVIDENCE OF BUSINESS ACTIVITIES OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HA VE SEEN THAT THE DISALLOWANCE OF EXPENDITURE AND THE DISALLOWANCE OF LOSS WERE RESTORED BACK TO THE FILE OF AO IN ASSESSEES APPEAL FOR THE YEAR UNDER CONSIDERATION. ITA NO.7597 M 16 & 2546 M 13- PRAJ ATMA TRADING CO. PVT. LTD. 10 FURTHER, WE HAVE SEEN THAT ISSUE RELATED WITH THE B USINESS LOSS AS SPECULATION WAS ALSO RESTORED BY TRIBUNAL THE FILE OF AO VIDES ORDER DATED 04.03.2016 IN ITA NO359/M/2011. KEEPING IN VIEW FACT THAT WE HAVE RESTORED THE DISALLOWANCE OF EXPENSES TO THE FILE OF AO IN ITA N O. 7756/M/2010 VIDE ORDER DATED 04.03.20116, HENCE THESE GROUNDS OF APP EAL ARE ALSO RESTORED TO THE FILE OF AO TO PASS THE ORDER AFRESH AFTER GIVIN G REASONABLE OPPORTUNITIES TO THE ASSESSEE. 13. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH DAY OF SEPTEMBER 2017. SD/- SD/- (B.R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 15/09/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/