M/s Kemfin Services Pvt. Ltd., Bangalore V. ACIT, Bangalore

ITA 82/BANG/2011

• Counselvise Citation: 8221114 RSA 2011
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 31-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUSAN THOMAS JOSE
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE SHRI N.K SAINI, ACCOUNTANT MEMBER AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER ITA NO.82/BANG/2011 (ASST. YEAR - 2007-08) M/S KEMFIN SERVICES PVT. LTD., KEMWELL HOUSE, 11, TUMKUR ROAD, BANGALORE-560 022. . APPELLANT VS. THE ASTT. COMMISSIONER OF INCOME-TAX, CIRCLE-11(5), BANGALORE. . RESPONDENT PAN NO.AAACK 6926E. APPELLANT BY : SHRI TATA KRISHNA RESPONDENT BY : SMT. SUSAN THOMAS JOSE DATE OF HEARING : 16-01-2012 DATE OF PRONOUNCEMENT : -01-2012 O R D E R PER P MADHAVI DEVI, JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) I AT ITA NO.82/B/11 2 BANGALORE DATED 20.12.2010. THE APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME-TAX ACT, 1961. 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN CONFIRMING THE ORDER OF THE AO IN TREATIN G THE TRANSACTIONS OF THE ASSESSEE AS EMANATING FROM BUSINESS AND CONS IDERING THE SAME AS BUSINESS INCOME AS AGAINST THE CAPITAL GAIN OFFE RED BY THE ASSESSEE. 3. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE FAIRLY ADMITTED THAT THIS ISSUE HAS ARISEN IN THE A SSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07, WHEREIN I T HAS BEEN HELD THAT THE CONVERSION OF SHARES FROM STOCK-IN-TRADE T O INVESTMENT HAS TO BE TREATED AS BUSINESS INCOME. HE HAS FILED THE CO PIES OF THE SAID ORDERS BEFORE US. HE HAS ALSO FILED THE APPLICATIO N FOR ADMISSION OF ADDITIONAL GROUND TO THE EFFECT THAT THE CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE ACTION OF THE AO IN NOT ALLOWING THE REBATE U/S 88E ON THE BASIS THAT THE ASSESSEE DID NOT FILE FORM 10DB WITHOUT ALLOWING AN OPPORTUNITY TO THE ASSESSEE TO FURNISH THE SAME. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS ALL ALONG BEEN TAKING THE GROUND THAT THE GAIN FROM CONVERSION OF ITA NO.82/B/11 3 SHARES HELD AS STOCK-IN-TRADE IN THE INVESTMENT HAS TO BE TREATED AS SHORT-TERM CAPITAL GAIN BUT THE REVENUE HAS TREATED IT AS BUSINESS INCOME AND THE REVENUES STAND HAS BEEN UPHELD BY T HE TRIBUNAL. HE SUBMITTED THAT SINCE THE ASSESSEE WAS TREATING THE INCOME AS SHORT- TERM CAPITAL GAIN, THE ASSESSEE NEVER CLAIMED THE R EBATE U/S 88E BEFORE THE AO. HOWEVER, HE HAD RAISED THIS GROUND BEFORE THE CIT(A) BUT THE CIT(A) WITHOUT GIVING ANY OPPORTUNITY TO THE AS SESSEE TO FILE FORM 10DB AND WITHOUT CALLING FOR THE SAME HAS REJECTED THE ASSESSEES CLAIM. HE SUBMITTED THAT THIS GROUND OF APPEAL WAS INADVERTENTLY NOT RAISED BEFORE THE TRIBUNAL AND PRAYED THAT THE ADDI TIONAL GROUND MAY BE ADMITTED. 5. THE LEARNED DR HOWEVER, STRONGLY OPPOSED THE ADMISSION OF THE ADDITIONAL GROUND OF APPEAL STATING THAT THE AS SESSEE HAS NOT FILED FROM NO.10DB EITHER BEFORE THE AO OR THE CIT(A). SHE SUBMITTED THAT THE ASSESSEE HAS TAKEN A SPECIFIC GROUND OF AP PEAL BEFORE THE CIT(A) AND, THEREFORE, IT WAS INCUMBENT FOR HIM TO FILE FROM NO.10DB BEFORE THE CIT(A) AND AS IT HAS FAILED TO DO SO, TH E SAME CANNOT BE ADMITTED AT THIS STAGE. ITA NO.82/B/11 4 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE RIVAL CONTENTIONS, WE FIND THAT THE ASSESSEE HAS RAISED T HE ADDITIONAL GROUND OF APPEAL BEFORE THIS TRIBUNAL AT THE LATER STAGE O F HEARING OF APPEAL. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS RAISED T HIS GROUND BEFORE THE CIT(A), BUT, BEFORE CIT(A) ALSO THE ASSESSEE HAS FA ILED TO PRODUCE FORM NO.10DB. THE CASE OF THE ASSESSEE IS THAT THE CIT(A) HAS NOT CALLED FOR THE SAID DETAILS. IN FACT, IT IS THE DU TY OF THE ASSESSEE TO FURNISH ALL THE DOCUMENTS IN SUPPORT OF HIS CONTENT IONS. AFTER SUBMITTING THE DETAILS, IF ANY FURTHER DETAILS ARE REQUIRED, THE CIT(A) MAY CALL/ASK FOR THE SAME. HOWEVER, IT IS ALSO TO BE SEEN THAT TAXES CAN BE COLLECTED ONLY IN ACCORDANCE WITH LAW. IF T HE ASSESSEE IS ENTITLED TO THE REBATE, HE SHOULD BE GIVEN THE SAME PROVIDED HE SATISFIES ALL THE CONDITIONS. THEREFORE, IN THE IN TEREST OF JUSTICE, WE DEEM IT FIT AND PROPER TO ADMIT THE ADDITIONAL GROU ND OF APPEAL AND REMIT THE ISSUE TO THE FILE OF THE AO WITH A DIRECT ION TO VERIFY THE GENUINENESS OF THE ASSESSEES CLAIM AND IF IT IS FO UND TO BE IN ACCORDANCE WITH LAW, THE SAME MAY BE ALLOWED. 7. AS REGARDS THE MAIN ISSUE OF THE INCOME BEING B USINESS OR CAPITAL GAIN, WE FIND THAT THE ISSUE IS COVERED AG AINST THE ASSESSEE BY THE DECISION OF THE TRIBUNAL FOR THE ASSESSMENT YEA RS 2005-06 AND ITA NO.82/B/11 5 2006-07. RESPECTFULLY FOLLOWING THE DECISION OF TH E COORDINATE BENCH TO WHICH ONE OF US (I.E J.M) IS A PARTY, THE GROUND IS ACCORDINGLY DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31ST JAN, 2012. SD/- SD/- (N.K SAINI) (P MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER VMS. BANGALORE DATED : 31/01/2012 COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTRAR, I TAT, BANGALORE.