D.I.T. (INTERNATIONAL TAXATION), MUMBAI V. LANSFORSAKRINGAR ASIENFOND, MUMBAI

ITA 7624/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70949 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-03-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 11-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURINDER JIT SINGH
• Section: 11A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI .. , , BEFORE SHRI I. P. BANSAL, JM AND SHRI SANJAY ARORA , AM ./ I.T.A. NO. 7624/MUM/2011 ( / ASSESSMENT YEAR: 2008-09) ASSISTANT DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) - 4(1), 133, SCINDIA HOUSE, BALLARD PIER, MUMBAI - 400 038 / VS. LANSFORSAKRINGAR ASIENFOND C/O. S. R. BATLIBOI & CO. 18 TH FLOOR, EXPRESS TOWER, NARIMAN POINT, MUMBAI - 400 021 ./ ./PAN/GIR NO. AAAAL 1792 R ( /APPELLANT ) : ( !' / RESPONDENT ) # / APPELLANT BY : SHRI SURINDER JIT SINGH !' $ # / RESPONDENT BY : NONE % &'( $ )* / DATE OF HEARING : 27.08.2013 +,- $ )* / DATE OF PRONOUNCEMENT : 27.08.2013 . / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-11, MUMBAI (CIT(A) FOR SH ORT) DATED 30.08.2011, ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S .143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A. Y.) 2008-09 VIDE ORDER DATED 24.11.2010. 2 ITA NO.7624/MUM/2011 (A.Y. 2008-09) ASST. DIRECTOR OF INCOME TAX (IT) VS. LANSFORSAKRIN GAR ASIENFOND 2. NONE APPEARED FOR AND ON BEHALF OF THE ASSESSEE- RESPONDENT WHEN ITS APPEAL WAS CALLED OUT FOR HEARING, NOR ANY ADJOURNMENT APPLICA TION STANDS RECEIVED. AT THE VERY OUTSET, THOUGH, IT WAS OBSERVED BY THE BENCH THAT T HE ISSUE UNDER REFERENCE IS THE SAME AS THAT CONSIDERED AND DECIDED BY US IN THE CASE OF LEGG MASON ASIA (EX JAPAN) ANALYST FUND (IN ITA NO. 7625/MUM/2011 DATED 27/8/2013), HEARD TODAY INSTANT. IN VIEW OF THIS IDENTITY OF SUBJECT MATTER OF APPEAL, THE HEARING IN THE APPEAL WAS PROCEEDED WITH. 3.1 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE EARNED SHORT TERM CAPITAL GAIN (STCG) AND INCURRED SHORT TERM CAPITAL LOSS (STCL) DURING THE RELEVANT YEAR, AS UNDER: (I) SHORT TERM CAPITAL GAINS ON OFF MARKET TRADING RS.37,69,563/- (II) SHORT TERM CAPITAL GAINS ON ON MARKET TRADING RS.42,54,62,242/- (III) SHORT TERM CAPITAL LOSS ON ON MARKET TRADING RS.( 11,42,92,021/-) THE ISSUE THAT ARISES IS THE PERMISSIBLE MANNER, O R THE SEQUENCE, OF ADJUSTMENT OF STCL AGAINST STCG TO BE FOLLOWED. THIS BECOMES RELE VANT AS WHILE THE LOSS ARISES ON TRANSACTIONS WHICH ARE SUBJECT TO TAX @ 10% U/S.111 A, THE SAME STANDS ADJUSTED AGAINST THE STCG CHARGEABLE TO TAX AT THE NORMAL RATE OF 30 %, IN PREFERENCE TO THAT CHARGEABLE AT THE RATE OF 10%, I.E., ON ON MARKET TRADING. 3.2 THE LD. CIT(A), FOLLOWING, AMONG OTHERS, THE DE CISION BY THE TRIBUNAL IN THE CASE OF FIRST STATE INVESTMENTS (HONGKONG) LTD. VS. ASST. D IRECTOR OF INCOME TAX (IT) [2011] 8 ITR (TRIB) 315 (MUMBAI), HAS ACCEPTED THE ASSESSEE S CLAIM ON THE GROUND THAT THE OPTION TO ADJUST THE LOSS IN TERMS OF SECTION 70 IS WITH T HE ASSESSEE. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. WE HAVE IN THE CASE OF LEGG MASON ASIA (EX JAPAN) ANALYST FUND (SUPRA) ALREADY EXPRESSED A VIEW IN CONFORMITY WITH THE SAID VIEW; THE MATTER BEING EVE N OTHERWISE COVERED BY A SERIES OF DECISIONS BY THE TRIBUNAL. THE ARGUMENTS ADVANCED B Y THE LD. DEPARTMENTAL REPRESENTATIVE (DR) BEFORE US WERE ALSO ON THE SAME LINES AS IN THE SAID CASE. THE 3 ITA NO.7624/MUM/2011 (A.Y. 2008-09) ASST. DIRECTOR OF INCOME TAX (IT) VS. LANSFORSAKRIN GAR ASIENFOND TRIBUNAL IN THE CASE OF FIRST STATE INVESTMENTS (HONGKONG) LTD. (SUPRA) HAS DISCUSSED THE MATTER AT LENGTH, HOLDING AS UNDER: HELD , ALLOWING THE APPEAL, THAT THE MATTER OF COMPUTATI ON OF INCOME WAS A SUBJECT WHICH CAME ANTERIOR TO THE APPLICATION OF T HE RATE OF TAX. ONLY WHEN THE INCOME WAS COMPUTED UNDER THE PROVISIONS OF THE ACT, WOULD THE QUESTION OF APPLICABILITY OF THE CORRECT RATE OF IN COME-TAX WOULD COME INTO BEING. THE COMPUTATION OF CAPITAL GAIN PRESCRIBED U NDER SECTION 48 OF THE ACT CANNOT BE CONFUSED WITH THE RATE OF TAX LIABLE TO BE CHARGED ON THE INCOME UNDER SECTION 48 OF THE ACT COULD NOT BE CON FUSED WITH THE RATE OF TAX LIABLE TO BE CHARGED ON THE INCOME UNDER THE HE AD CAPITAL GAINS SO COMPUTED. THE COMPUTATION OF CAPITAL GAIN IS GOVERN ED BY SECTION 48 WHEREAS THE RATES OF TAX ARE GOVERNED BY SECTIONS 1 11A AND 115AD OF THE ACT. THE AUTHORITIES BELOW HAD ERRED IN NEGATING TH E ASSESSEES COMPUTATION OF SHORT-TERM CAPITAL GAIN. IN VIEW OF THE FOREGOING, WE, THEREFORE, FOLLOWING THE SAID DECISIONS, AS ALSO FOR THE SAME REASONS AS MENTIONED IN OUR ORDER IN THE C ASE OF LEGG MASON ASIA (EX JAPAN) ANALYST FUND (SUPRA), AGAIN IN ENDORSEMENT OF THE SAID VIEW, UP HOLD THE ORDER OF THE FIRST APPELLATE AUTHORITY. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . /-)0 ' $ / $ ) 12 ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 27, 20 13 SD/- SD/- (I. P. BANSAL) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER % ( MUMBAI; 3& DATED : 27.08.2013 '.&../ ROSHANI , SR. PS 4 ITA NO.7624/MUM/2011 (A.Y. 2008-09) ASST. DIRECTOR OF INCOME TAX (IT) VS. LANSFORSAKRIN GAR ASIENFOND ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. % 4) ( ) / THE CIT(A) 4. % 4) / CIT - CONCERNED 5. 7'89 !)&:; , * :;- , % ( / DR, ITAT, MUMBAI 6. 9<= >( / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , % ( / ITAT, MUMBAI