DCIT 2(1), MUMBAI V. NUSLI N WADIA, MUMBAI

ITA 7696/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71140 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 02-04-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 14-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI H L KARWA, PRESIDENT & SHRI N K BILLAIYA, ACCOUNTANT MEMBER ITA NO. 7696/MUM/2011 FOR ASST. YEAR: 2008-09 THE DY. CIT 2(1), MUMBAI VS. SHRI NUSLI N WADIA, NEVILLE HOUSE, J N HEREDIA MARG, BALLARD ESTATE, MUMBAI- 400 001 PAN AAAPW0990M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRITAM SINGH RESPONDENT BY : SHRI DILIP S DAMLE DATE OF HEARING : 17.09.2013 DATE OF PRONOUNCEMENT : 17.09.2013 O R D E R PER N.K.BILLAIYA (AM) : THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE CIT(A)-4, MUMBAI, DATED 24.08.2011 PERTAINING TO A.Y. 2008-09 . 2. THE APPEAL IS LATE BY 22 DAYS. THE DR SUBMITTED THAT THE APPEAL WAS DELAYED FOR WANT OF AUTHORIZATION MEMO ON TIME. THE REVENU E WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE HENCE THE DELAY IS CONDONED AN D THE APPEAL IS ADMITTED. 3. GROUND NO.1 IS OF GENERAL IN NATURE AND NEEDS NO ADJUDICATION. 2 ITA NO.7696/M/2011 AY:2008-09 4. THE GRIEVANCE OF THE REVENUE IN GROUND NO.2 IS T HAT THE CIT(A) ERRED IN TREATING THE GAINS FROM TRANSACTION IN SHARES, UNIT S OF MUTUAL FUNDS AS INCOME FROM CAPITAL GAIN INSTEAD OF BUSINESS INCOME AS TREATED BY THE ASSESSING OFFICER. THE ASSESSEE DERIVES INCOME FROM SALARY, BUSINESS AND O THER SOURCES. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING O FFICER OBSERVED THAT THE ASSESSEE HAS EARNED INCOME FROM TRANSACTION IN SHARES/UNITS TO THE TUNE OF RS.11,60,98,763/-. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE FAC TS OF THE CASE ARE SIMILAR TO THE FACTS OF A.Y. 2007-08, WHEREIN THE ASSESSING OFFICE R HAS TREATED THE CAPITAL GAIN AS BUSINESS INCOME OF THE ASSESSEE. THE ASSESSING OFF ICER FOLLOWED THE FINDINGS OF HIS PREDECESSOR AND TREATED THE ENTIRE CAPITAL GAIN AS INCOME FROM BUSINESS. THE ASSESSEE STRONGLY AGITATED THIS ISSUE BEFORE THE CI T(A). IT WAS CONTENDED BEFORE THE CIT(A) THAT THE ASSESSEE IS ONLY AN INVESTOR AND IS NOT DOING BUSINESS BY TRADING IN SHARES/UNITS. THE CIT(A) FURTHER , CONSIDERING THE FACTS AND SUBMISSIONS OF THE ASSESSEE , OBSERVED AT PARA 74 ON PAGE 21 OF HIS OR DER THAT ON IDENTICAL FACTS IN PREVIOUS A.YS 2005-06 AND 2006-07 GAINS FROM THE IN VESTMENTS IN SHARES AND UNITS WERE TREATED AS CAPITAL GAIN AND AT PARA 75 CONCLUD ED THAT FOLLOWING HIS OWN DECISION AND THE DECISION OF THE TRIBUNAL FOR A.Y. 2005-06 A ND 2006-07 DIRECTED THE ASSESSING OFFICER TO TREAT THE GAIN FROM INVESTMENT IN SHARES AND UNITS AS CAPITAL GAIN. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE U S. 4. THE DR RELIED UPON THE FINDINGS OF THE ASSESSING OFFICER. THE COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE FACTS OF THE CASE BEING IDENTICAL AS THEY WERE IN EARLIER ASSESSMENT YEARS, THE ISSUE NOW STANDS SETTLED IN F AVOUR OF THE ASSESSEE. 5. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-0 6 IN ITA NOS. 3119/M/2010 AND 3122/M/2010. WE FIND THAT THE TRIBUNAL HAS GIVEN ITS FINDING AT PARA 11 ON PAGE 7 AND TREATED THE INCOME IN QUESTION UNDER THE HEAD C APITAL GAIN. SIMILAR VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN THE ASSESSEES OWN CA SE FOR A.Y 2006-07 VIDE ITA NO. 1888/MUM/2011 AND FOR A.Y. 2007-08 VIDE ITA NO. 440 5/MUM/2011. AS NO DISTINGUISHING FACTS HAVE BEEN BROUGHT BEFORE US BY THE REVENUE, RESPECTFULLY 3 ITA NO.7696/M/2011 AY:2008-09 FOLLOWING THE DECISION OF THE TRIBUNAL, WE CONFIRM THE FINDINGS OF THE CIT(A) . HOWEVER, AT THE SAME TIME, WE FIND THAT THE ASSESSE E HAS SET OFF LOSS FROM THE DERIVATIVE TRANSACTION AGAINST CAPITAL GAIN. WE AC CORDINGLY RESTORE THIS ISSUE FOR THE LIMITED PURPOSES BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE CLAIM OF SET OFF OF LOSS ARI SING OUT OF DERIVATIVE TRANSACTION FROM CAPITAL GAIN AS PER THE PROVISIONS OF LAW. GR OUND NO.2 IS ALLOWED FOR STATISTICAL PURPOSES. 6. GROUND NO.3 DOES NOT ARISE OUT OF THE ORDER OF T HE CIT(A) AND, IS THEREFORE DISMISSED. 7. IN THE RESULT, APPEAL IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER 2013. SD/- SD/- (H L KARWA) (N.K.BILLAIYA) PRESIDENT ACCOUNTANT MEMBER MUMBAI, DT : 17 TH SEPTEMBER, 2013 SA COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T, MUMBAI 4. THE CIT (A)-4, MUMBAI 5. THE DR, B- BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI