ACIT 25(3), MUMBAI V. DEEPIKA B DAVE, MUMBAI

ITA 7788/MUM/2010

• Counselvise Citation: 778819914 RSA 2010
• Duration Of Justice: 3 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 11-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH MEENA
• Keywords: Business income
• Section: 143(3)

Judgement Text

D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI .. , # %, & # ' BEFORE SHRI P.M. JAGTAP, AM AND SHRI SANJAY GARG, J M ./ I.T.A. NO.7788/ MUM/2010 ( &% % / ASSESSMENT YEAR : 2007-2008 ASST. COMMISSIONER OF INCOME TAX -25(3), C-10, R. NO. 308, PRATYAKSH KAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA (EAST), MUMBAI 400 051. / VS. MRS. DEEPIKA B. DAVE, 606, RAJ VAIBHAV -1, MAHAVIR NAGAR, KANDIVALI (WEST), MUMBAI 400 067. ./ PAN : AACPD 2352 G ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI OM PRAKASH MEENA R E SPONDENT BY : SHRI DHARMESH SHAH / DATE OF HEARING : 12-05-2014 / DATE OF PRONOUNCEMENT : 06#06#2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) - 35, MUMBAI DATED 18-8-2010 WHEREBY HE DIRECTED THE A.O. TO ACCEPT THE CLAIM OF THE ASSESSEE OF SHORT TERM CAPITAL GAIN OF RS. 26,12,334/- ON ACCOUNT OF PROFIT EARNED FROM THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES INSTEAD OF BUSINESS INCOME TREATED BY THE A.O. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDU AL WHO FILED HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 27-2-200 8 DECLARING TOTAL INCOME OF RS. 26,38,346/-. IN THE SAID RETURN, PROFIT EAR NED FROM THE TRANSACTIONS OF ITA 7788/M/10 2 PURCHASE AND SALE OF SHARES AMOUNTING TO RS. 26,12, 334/- WAS DECLARED BY THE ASSESSEE AS SHORT TERM CAPITAL GAIN. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED BEFORE THE A.O. THAT THE ASSESSEE IN AN INVESTOR IN SHARES AND THE SHARES ARE SHOWN IN THE BALANCE S HEET AS INVESTMENT. IT WAS ALSO SUBMITTED THAT THE INTENTION OF THE ASSESS EE IS ALWAYS TO MAKE INVESTMENT IN SHARES AND THERE IS CONSIDERABLE TIME GAP BETWEEN THE PURCHASE AND SALE OF SHARES. IT WAS CONTENDED THAT ALL THE TRANSACTIONS IN SHARES ARE MADE ON DELIVERY BASIS AND THE PROFIT EA RNED FROM THE TRANSACTIONS IN SHARES WAS SHOWN AS SHORT TERM CAPITAL GAIN OR L ONG TERM CAPITAL GAIN DEPENDING ON THE PERIOD OF HOLDING EVEN IN THE EARL IER YEARS. 3. THE SUBMISSION MADE ON BEHALF OF THE ASSESSEE IN SUPPORT OF THE TREATMENT GIVEN TO THE PROFIT EARNED FROM THE TRANS ACTIONS OF PURCHASE AND SALE OF SHARES AS SHORT TERM CAPITAL GAIN WAS NOT F OUND ACCEPTABLE BY THE A.O. MAINLY ON THE FOLLOWING GROUNDS:- (I) MERE ENTRIES IN THE BOOKS OF ACCOUNT SHOWING SHARES AS INVESTMENT IS NOT DETERMINATIVE FACTOR TO DECIDE THE REAL NATURE OF TRANSACTION. FOR THIS PROPOSITION THE A.O. RELIED ON VARIOUS JUDGMENTS INCLUDING THE DECISIONS OF THE SUPREME COURT IN A) TUTICORIN ALKALI CHEMICALS CASE 227 ITR 172 B) CHOWRINGHEE SALES BUREAUS CASE 87 ITR 584 C) PUNJAB DISTILLING INDUSTRIES LTDS CASE 35 ITR 5 23 D) G. VENKATASWAM NAIDU & COS CASE 35 ITR 594 E) BAZAPUR SUGAR FACTORYS CASE 172 ITR 330 (II) ASSESSEE IS UNDOUBTEDLY DEALING IN LARGE NUMBE R OF SHARES. IN FACT DEALING IN SHARES IS THE SOLE BUSINESS OF THE ASSESSEE. MOST OF THE SHARES ARE BOUGHT AND SOLD WITHIN SHORT PERIOD. WHI LE SOME ARE NOT SOLD DUE TO MARKET CONDITIONS AND THEIR HOLDING WIT H THE ASSESSEE REMAINS BEYOND FEW DAYS, IT WILL NOT CHANGE THE NAT URE OF TRANSACTIONS. THE ASSESSEE IS VERY WELL ENGAGED IN THE BUSINESS O F SHARE TRADING AND RUNS A FULL FLEDGED OFFICE FOR THIS PURPOSE. (III) THE A.O. RELIED ON CIRCULAR NO.4/2007 DATED 1 5.06.2007 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES: (IV). FOR TREATING THE PROFIT ON SALE OF INVESTMENT IN SHARES AS BUSINESS INCOME, THE AQ. RELIED UPON FOLLOWING JUDGEMENTS: ITA 7788/M/10 3 A) LAXMINARAYAN RAM GOPAL VS. GOVT. OF HYDERABAD 25 ITR 449(SC) B) DAMODAR SHENOY (A.P.) VS. CIT 26 ITR 650 (BORN) C) WERLE & CO. VS. COLQHOUN (1988) TC 402; D) CIT VS MOTILAL HIRABHAI SPG. & WVG. CO. LTD. 11 7 ITR 173 (GUI); RAJA BAHADUR VISHESHWARA SINGH VS. CIT 41 IT R 685 (SC); E) BHARAT DEVELOPMENT (P) LTD. VS. CIT 4 TAXMAN 58 (DEL); F) PUNJAB COOPERATIVE BANK LTD. VS. CIT 81 ITR 635 (PC) AND G) SARDAR INDRA SINGH & SONS LTD. VS. CIT 24 ITR 51 4 (SC) (V). THE A.O. HAS FURTHER NOTED THAT THE FACT THAT THE APPELLANT HAS HELD S1ARES FOR A SHORT PERIOD AND THEN SOLD THEM O FF INDICATES THAT THE ONLY INTENT OF THE APPELLANT IS TO BOOK PROFIT ON S ALE OF SHARES. THE FACT THAT THE APPELLANT HAS SOLD LARGE NUMBER OF SHARES WITHIN A SHORT PERIOD OF PURCHASE PROVES THAT THERE WAS NO INTENTI ON OF THE APPELLANT TO HOLD THE SHARES AS INVESTMENT AND EARN DIVIDEND ON THE SAME. THE APPELLANT HAS REPEATEDLY BOUGHT AND SOLD SHARES AFT ER HOLDING THEM FOR SHORT DURATION WITH ONLY ONE INTENT I.E PROFIT MAKI NG. RELIANCE WAS PLACED BY THE A.O. ON THE DECISION OF THE ITAT AHMEDABAD BENCH IN DCIT VS. DEEPA SHAH 99 ITD 219. VI) THE A.O. FURTHER HELD THAT MOST OF THE SHARES A RE BOUGHT AND SOLD IN FEW DAYS WHILE SOME OTHER SHARES WERE HELD BEYOND FEW DAYS. IN VIEW OF THE ABOVE REASONS, THE A.O. ASSESSED SHO RT TERM CAPITAL GAIN UNDER THE HEAD BUSINESS WHICH IS CONTESTED IN THI S APPEAL. FOR THE REASONS GIVEN ABOVE, THE A.O. HELD THAT THE PROFIT OF RS. 26,12,334/- EARNED BY THE ASSESSEE FROM THE TRANSACTIONS IN SHA RES CONSTITUTED BUSINESS INCOME OF THE ASSESSEE AND THE SAME WAS ACCORDINGLY BROUGHT TO TAX BY HIM IN THE HANDS OF THE ASSESSEE UNDER THE HEAD PROFIT S AND GAINS OF BUSINESS OR PROFESSION VIDE AN ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961. 4. AGAINST THE ORDER PASSED BY THE A.O. U/S 143(3) OF THE ACT, APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) AND AFTER CONSIDERING THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(A) ACCEPTED THE TREATMENT GI VEN BY THE ASSESSEE TO THE ITA 7788/M/10 4 PROFIT EARNED FROM THE TRANSACTIONS IN PURCHASE AND SALE OF SHARES AS SHORT TERM CAPITAL GAIN FOR THE FOLLOWING REASONS GIVEN I N PARA 5.1 OF THE HIS ORDER:- 5.1 1 HAVE CONSIDERED THE SUBMISSIONS OF THE REPRE SENTATIVE AND THE STAND TAKEN BY THE AO. ADMITTEDLY, THE APPELLANT DI SCLOSED THE SHARES AS INVESTMENT IN THE BALANCE SHEET FOR A.Y. 2006-07 AND 2007-08. IT IS SEEN FROM THE BALANCE SHEET THAT THE INVESTMENT IN SHARES AS ON 31.3.2006 WAS RS.44,63,005/- WHEREAS THE INVESTMENT IN SHARES AS ON 31.3.2C07 WAS RS. 28,96,372/-. IT IS FURTHER SEEN T HAT IN THE EARLIER YEARS THE PROFIT ON PURCHASE AND SALE OF SHARES HEL D AS INVESTMENT AS EVIDENT FROM THE BALANCE SHEET WAS ADMITTED UNDER T HE HEAD SHORT TERM CAPITAL GAIN OR LONG TERM CAPITAL GAIN DEPENDING UP ON THE PERIOD OF HOLDING. AS CONTENDED BY THE REPRESENTATIVE ALL THE TRANSACTIONS IN RESPECT OF WHICH SHORT TERM CAPITAL GAIN WAS ADMITT ED, WERE DELIVERY BASED TRANSACTIONS, IT IS TRUE THAT THE APPELLANT U NDERTOOK SPECULATIVE TRANSACTIONS DURING THIS YEAR WHICH IS NEGLIGIBLE B UT THAT IS NO BAR FOR THE ASSESSEE TO HOLD SHARES AS INVESTMENT AS PER TH E DECISION OF THE HONBLE HYDERABAD TRIBUNAL IN THE CASE OF SHA-LA IN VESTMENT AND FINANCIAL CONSULTANTS PVT. LTD. VS DY CIT(2 SOT 371 ). FURTHER ALL THE SHARES WERE TRANSFERRED IN THE NAME OF THE APPELLAN T AS EVIDENT FROM THE DEMAT ACCOUNT AND THE APPELLANT PAID STT AT A H IGHER RATE APPLICABLE TO THE INVESTOR. FURTHER, THE APPELLANT DID NOT CLAIM ANY PAYMENT OF INTEREST ON D FUNDS WHICH WERE UTILISED FOR INVESTMENT IN SHARES. A PERUSAL OF G OF SHORT TERM CAPITAL GAINS SHOWS THAT THE APPELLANT EARNED SHORT TERM GAINS BY HOLDING SHARES AS BELOW: PERIOD OF HOLDING GAIN/(LOSS) PURCHASES SALES QUANTITY MONTHS DAYS AMOUNT % AMOUNT % AMOUNT % NOS. % 1 0-1 MONTHS 1-30 (33,554) -1.21% 2,27,96,796 69.43% 2,27,63,242 63.94% 47,513 49.76% 2 1-2 MONTHS 31-60 79,385 2.87% 26,18,033 7.97% 26,97 ,419 7.58% 22.800 23.88% 3 2-3 MONTHS 61-90 3,32,504 12.02% 20,17,137 6.14% 23 ,49,641 6.60% 6,900 7.23% 4 3-4MONTHS 91-120 4,93,961 17.86% 19,26,384 5.87% 24 ,20,345 6.80% 7,235 7.58% 5 4-5 MONTHS 121-150 1,96,445 7.10% 7,15,108 2.18% 9, 11,554 2.56% 3,400 3.56% 6 5-6 MONTHS 151-180 26,769 0.97% 2,95,083 0.90% 3,21 ,879 0.90% 1,100 1,15% 7 6-7 MONTHS 181-364 16,70,878 60.40% 24,67,894 7.52% 41,38,772 11.62% 6,536 6.85% TOTAL 27,66,415 100% 3,28,36,436 100.00% 3,56,02, 851 100.0% 95,484 100.0% FROM THE ABOVE, IT COULD BE SEEN THAT MAJOR PORTION OF SHORT TERM CAPITAL GAINS WAS EARNED BY HOLDING THE SHARES FOR MORE THAN SIX MONTHS AND IN FACT THE SHORT TERM CAPITAL GAINS EARNED ON SALE OF SHARES BY HOLDING THEM FOR LESS THAN TWO MONTHS IS NEGLIGIBLE. FURTHER IT IS SEEN THAT THE APPELLANT HAS PAID INTEREST OF RS. 1,54,282/ TO HER HUSBAND SHRI BHARAT DAVE, ON THE LOAN AMOUNT UTILISED FOR INVESTMENT IN NSC AND BANK DEPO SIT AS SUBMITTED BEFORE THE A.O. BY LETTER DT.30.7.2009 WHICH IS NOT DISPUT ED BY THE A.O. THUS E APPELLANT HAS NOT AVAILED BY BORROWED FUNDS ON WHIC H INTEREST WAS PAID FOR ITA 7788/M/10 5 THE PURPOSE OF INVESTMENT IN SHARES. CONSIDERING TH E ABOVE ASPECTS, IT CANNOT BE SAID THAT THE APPELLANT WAS ENGAGED IN THE BUSIN ESS OF SHARE TRADING AND, THEREFORE, THE CLAIM OF THE APPELLANT THAT THE PROF ITS ON SALE OF SHARES IS ASSESSABLE UNDER THE HEAD SHORT TERM CAPITAL GAIN H AS TO BE ACCEPTED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVEN UE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE ISSUE AS TO WHETHE R THE PROFIT ON SALE OF SHARES CONSTITUTES BUSINESS INCOME OF THE ASSESSEE OR CAPITAL GAINS DEPENDS ON WHETHER THE SAID SHARES WERE PURCHASED AND HELD BY THE ASSESSEE AS INVESTMENT OR STOCK IN TRADE. IN ORDER TO ASCERTAIN AS TO WHETHER THE SHARES WERE PURCHASED BY THE ASSESSEE AS INVESTMENT OR STO CK IN TRADE, THE MOST RELEVANT ASPECT THAT IS TO BE SEEN IS THE INTENTION OF THE ASSESSEE BEHIND PURCHASING AND HOLDING THE SHARES AND SUCH INTENTIO N HAS TO BE GATHERED FROM THE FACTS OF THE CASE INCLUDING THE CONDUCT OF THE ASSESSEE. THE TREATMENT GIVEN BY THE ASSESSEE TO THE SHARES IN IT S BOOKS OF ACCOUNT AND ACCEPTANCE OF THE SAME BY THE REVENUE IN OTHER YEAR S IS ONLY ONE OF SUCH ASPECTS WHICH IS ALSO TO BE TAKEN INTO CONSIDERATIO N FOR DECIDING THIS ISSUE. HOWEVER, THAT IS NOT THE ONLY CRITERIA WHICH CAN BE ADOPTED AS A CONCLUSIVE TEST AND IT HAS TO BE TAKEN INTO CONSIDERATION ALON G WITH OTHER CRITERIAS TO ASCERTAIN THE EXACT INTENTION OF THE ASSESSEE TO PU RCHASE AND HOLD THE SHARES. IN THE CASE OF SARNATH INFRASTRUCTURE (P).LTD. VS. ACIT REPORTED IN 120 TTJ (LUCKNOW) 216, THE COORDINATE BENCH OF THIS TRIBUNA L, AFTER TAKING INTO CONSIDERATION THE VARIOUS JUDICIAL PRONOUNCEMENTS O N THIS ISSUE AS WELL AS THE RELEVANT CIRCULAR ISSUED BY THE BOARD, HAS LAID DOWN THE FOLLOWING PRINCIPLES/CRITERIAS WHICH CAN BE APPLIED TO THE FA CTS OF THE CASE TO FIND OUT WHETHER THE TRANSACTIONS IN SHARES ARE IN THE NATUR E OF TRADE OR ARE MERELY FOR THE INVESTMENT PURPOSES : ITA 7788/M/10 6 (1) WHAT IS THE INTENTION OF THE ASSESSEE AT THE TI ME OF PURCHASE OF THE SHARES (OR ANY OTHER ITEM). THIS CAN BE FOUND OUT F ROM THE TREATMENT IT GIVES TO SUCH PURCHASE IN ITS BOOKS OF ACCOUNT. WHE THER IT IS TREATED AS STOCK-IN- TRADE OR INVESTMENT? WHETHER SHOWN IN OPE NING/CLOSING STOCK OR SHOWN SEPARATELY AS INVESTMENT OR NON-TRADING AS SET? (2) WHETHER ASSESSEE HAS BORROWED MONEY TO PURCHASE AND PAID IN TEREST THEREON. NORMALLY, MONEY IS BORROWED TO PURCHASE GOODS FOR T HE PURPOSE OF TRADE AND NOT FOR INVESTING IN AN ASSET FOR RETAINI NG. (3) WHAT IS THE FREQUENCY OF SUCH PURCHASES AND DISPOSAL IN THAT PA RTICULAR ITEM? IF PURCHASE AND SALE ARE FREQUENT, OR THERE ARE SUBSTA NTIAL TRANSACTIONS IN THAT ITEM, IT WOULD INDICATE TRADE. HABITUAL DEALIN G IN THAT PARTICULAR ITEM IS INDICATIVE OF INTENTION OF TRADE. SIMILARLY , RATIO BETWEEN THE PURCHASES AND SALES AND THE HOLDINGS MAY SHOW WHETH ER THE ASSESSEE IS TRADING OR INVESTING (HIGH TRANSACTIONS AND LOW HOLDINGS INDICATE TRADE WHEREAS LOW TRANSACTIONS AND HIGH HOLDINGS IN DICATE INVESTMENT): (4) WHETHER PURCHASE AND SALE IS FOR REALIZING PROF IT OR PURCHASES ARE MADE FOR RETENTION AND APPRECIATION IN ITS VALUE. F ORMER WILL INDICATE INTENTION OF TRADE AND LATTER, AN INVESTMENT. IN TH E CASE OF SHARES WHETHER INTENTION WAS TO ENJOY DIVIDEND AND NOT MER ELY EARN PROFIT ON SALE AND PURCHASE OF SHARES. A COMMERCIAL MOTIVE IS AN ESSENTIAL INGREDIENT OF TRADE. (5) HOW THE VALUE OF THE ITEMS HAS BEEN TAKEN IN THE BALANCE SHEET? IF THE ITEMS IN QUESTION ARE VALUED AT COST, IT WOULD INDICATE THAT THEY ARE INVESTMENTS OR WHERE THEY AR E VALUED AT COST OR MARKET VALUE OR NET REALIZABLE VALUE (WHICHEVER IS LESS), IT WILL INDICATE THAT ITEMS IN QUESTION ARE TREATED AS STOCK-IN-TRAD E. (6) HOW THE COMPANY (ASSESSEE) IS AUTHORIZED IN MEMORANDUM OF ASSOCIATION/ARTICLE OF ASSOCIATION? WHETHER FOR TRA DE OR FOR INVESTMENT? IF AUTHORIZED ONLY FOR TRADE, THEN WHETHER THERE AR E SEPARATE RESOLUTIONS OF THE BOARD OF DIRECTORS TO CARRY OUT INVESTMENTS IN THAT COMMODITY? AND VICE VERSA. (7) IT IS FOR THE ASSESSEE TO ADDUC E EVIDENCE TO SHOW THAT HIS HOLDING IS FOR INVESTMENT OR FOR TRADING AND WH AT DISTINCTION HE HAS KEPT IN THE RECORDS OR OTHERWISE, BETWEEN TWO TYPES OF HOLDINGS. IF THE ASSESSEE IS ABLE TO DISCHARGE THE PRIMARY ONUS AND COULD PRIMA FACIE SHOW THAT PARTICULAR ITEM IS HELD AS INVESTMENT FOR SAY, STOCK-IN-TRADE), THEN ONUS WOULD SHIFT TO REVENUE TO PROVE THAT APPA RENT IS NOT REAL. (8) THE MERE FACT OF CREDIT OF SALE PROCEEDS OF SHARES (OR FOR THAT MATTER ANY OTHER ITEM IN QUESTION) IN A PARTICULAR ACCOUNT OR NOT SO MUCH FREQUENCY OF SALE AND PURCHASE WILL ALONE WILL NOT BE SUFFICIENT TO SAY THAT ASSESSEE WAS HOLDING THE SHARES FOR THE ITEMS IN QUESTION) FOR INVESTMENT. (9) ONE HAS TO FIND OUT WHAT ARE THE LE GAL REQUISITES FOR DEALING AS A TRADER IN THE ITEMS IN QUESTION AND WH ETHER THE ASSESSEE IS COMPLYING WITH THEM. WHETHER IT IS THE ARGUMENT OF THE ASSESSEE THAT IT IS VIOLATING THOSE LEGAL REQUIREMENTS, IF IT IS CLA IMED THAT IT IS DEALING AS A TRADER IN THAT ITEM? WHETHER IT HAD SUCH AN INTEN TION (TO CARRY ON ILLEGAL BUSINESS IN THAT ITEM SINCE BEGINNING OR WH EN PURCHASES WERE MADE? (10) IT IS PERMISSIBLE AS PER CBDT CIRCULAR N O. 4 OF 2007 OF 15TH JUNE, 2007 THAT AN ASSESSEE CAN HAVE BOTH PORTFOLIO S, ONE FOR TRADING AND OTHER FOR INVESTMENT PROVIDED IT MAINTAINING SE PARATE ACCOUNT FOR EACH TYPE, THERE ARE DISTINCTIVE FEATURES FOR BOTH AND THERE IS NO ITA 7788/M/10 7 INTERMINGLING OF HOLDINGS IN THE TWO PORTFOLIOS. (1 1) NOT ONE OR TWO FACTORS OUT OF ABOVE ALONE WILL BE SUFFICIENT TO CO ME TO A DEFINITE CONCLUSION BUT THE CUMULATIVE EFFECT OF SEVERAL FAC TORS HAS TO BE SEEN. A PERUSAL OF THE ORDERS PASSED BY THE AUTHORITIES B ELOW IN THE PRESENT CASE SHOWS THAT NEITHER THE AO NOR THE LEARNED CIT(APPEA LS) HAS DONE THE EXERCISE TO FIND OUT THE EXACT NATURE OF SHARE TRANSACTIONS CARRIED ON BY THE ASSESSEE IN A PROPER MANNER BY APPLYING THE RELEVANT CRITERI AS/PRINCIPLES TO THE FACTS OF THE CASE. WE, THEREFORE, CONSIDER IT FAIR AND PROPE R AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE AO WITH A DIR ECTION TO DECIDE THE SAME AFRESH AFTER APPLYING THE PRINCIPLES/CRITERIAS LAID DOWN BY THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF SARNATH INFRASTRUCTU RE (SUPRA) TO THE FACTS OF THE CASE. NEEDLESS TO OBSERVE THAT THE AO SHALL AFFORD PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. 6. IN THE RESULT, APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JUNE, 2014 . . / 0 06#06#2014 SD/- SD/- (SANJAY GARG) (P.M. JAGTAP ) .3 JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 0 DATED 06#06#2014 [ ITA 7788/M/10 8 \ .3../ RK , SR. PS , -&./ 0/ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 6 () / THE CIT(A)22 MUMBAI. 4. 6 / CIT 10, MUMBAI 5. 9 33; , ; , / DR, ITAT, MUMBAI D BENCH 6. > / GUARD FILE. / BY ORDER, 9 3 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI