The ACIT, Circle-2(2), Baroda V. Shri Nachiket B.Bajaria, Baroda

ITA 864/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72980 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 17-02-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 28-03-2013
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: M J SHAH
• Keywords: Reopening of assessment; Business income; Difference of opinion; Change of opinion
• Section: 143(3); 142(1); 147; 148; 154

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , ,, , . .. . . . . . , , , , !' ! # !' ! # !' ! # !' ! # BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SH. N.S. SAINI, ACCOUNTANT MEMBER ./ ././ ./ ITA NO. 864/AHD/2013 % &% % &% % &% % &% / // / ASSESSMENT YEAR 2005-06 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-2(2), BARODA. VS SHRI NACHIKET B. BAJARIA, 18-19, SUVARNAPURI SOCIETY, CHIKUVADI, JETALPUR ROAD, BARODA-390007. PAN: AHGPB5822J '(/ APPELLANT )*'( / RESPONDENT REVENUE BY : SH. O.P. BATHEJA, SR. D.R. ASSESSEE(S) BY : SH. M.J. SHAH, AR + , -'/ // / DATE OF HEARING : 17/02/2014 ./& , -' / DATE OF PRONOUNCEMENT : 21/02/2014 !0 !0 !0 !0/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-II, BARODA DATED 07.12.2012. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(APPEALS) ERRED IN HOLDING THAT THE ASSESSMENT W AS REOPENED MERELY ON THE BASIS OF CHANGE OF OPINION, IGNORING THAT ON ACCOUN T OF FREQUENCY AND REGULARITY OF TRANSACTION AND HOLDING PERIOD OF TWO WEEKS AND LESS AND CBDT CIRCULAR NO. 4 OF 2007, THE INCOME WAS BUSINESS INC OME AND NOT TAXING IT AS SUCH HAD RESULTED INTO TAXING THE INCOME AT LOWER R ATE. ITA NO.864/AHD/2013 SHRI NACHIKET B. BAJARIA VS. ACIT, CIRCLE-2(2), BAR ODA FOR A.Y. 2005-06 - 2 - 2. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR ALTE R THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. RELIEF CLAIMED IN APPEAL IT IS PRAYED THAT THE ORDER OF THE CIT(APPEALS) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED.. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT C ASE, THE ASSESSEE FILED HIS RETURN OF INCOME ORIGINALLY ON 28.10.2005 DISCLOSING THEREIN SHORT TERM CAPITAL GAINS AT RS 27,05,017/-. THE SAID RETURN WAS TAKEN UP FOR SCRU TINY BY THE DEPARTMENT AND ASSESSMENT U/S 143(3) WAS COMPLETED ON 29.09.2007 WHEREIN SHOR T TERM CAPITAL GAINS WAS ASSESSED AT RS 22,72,328/-. THE ASSESSING OFFICER PASSED ORDER U/S 154 ON 25.02.2008 DETERMINING SHORT TERM CAPITAL GAINS AT RS 27,05,017/- IN PLACE OF RS 22,72,328/- DETERMINED U/S 143(3) ON 29.09.2007. THEREAFTER, NOTICE U/S 148 W AS ISSUED ON 04.08.2009 FOR THE REASON THAT INCOME ASSESSED AS SHORT TERM CAPITAL G AINS OUGHT TO HAVE BEEN ASSESSED AS BUSINESS INCOME. 4. ON APPEAL, THE LD. CIT(A) ACCEPTED THE CONTENTIO N OF THE ASSESSEE THAT THE REOPENING OF ASSESSMENT ON THE ABOVE GROUND WAS NOT PERMISSIBLE BEING BASED ON CHANGE OF OPINION AND THEREFORE, THE LD. CIT(A) QUASHED TH E ASSESSMENT FRAMED U/S 147 OF THE ACT. 5. THE REVENUE IS IN APPEAL BEFORE US AGAINST THE A BOVE ORDER OF THE LD. CIT(A) BY RAISING ABOVE GROUNDS OF APPEAL. 6. THE LD. DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 7. WE FIND THAT NO SPECIFIC ERROR IN THE ORDER OF T HE LD. CIT(A) COULD BE POINTED OUT BY THE LD. DR. WE FIND FROM COPY OF NOTICE ISSUED U/S 142(1) DURING THE COURSE OF THE ITA NO.864/AHD/2013 SHRI NACHIKET B. BAJARIA VS. ACIT, CIRCLE-2(2), BAR ODA FOR A.Y. 2005-06 - 3 - ORIGINAL ASSESSMENT PROCEEDINGS WHICH IS PLACED AT PAGE NOS. 50A TO 53 OF THE PAPER BOOK FILED BY THE ASSESSEE THAT THE ASSESSING OFFIC ER BEFORE ACCEPTING SHORT TERM CAPITAL GAINS HAS ASKED THE ASSESSEE TO FURNISH DETAILS OF SHORT TERM CAPITAL GAINS AND JUSTIFICATION FOR CLAIMING BROKERAGE AND INTEREST EXPENSES AGAINS T THE SAID INCOME. THE ASSESSING OFFICER AFTER GOING THROUGH THESE DETAILS IN THE OR IGINAL ASSESSMENT ACCEPTED THE PROFIT ON SALE OF SHARES AS SHORT TERM CAPITAL GAINS BY DISAL LOWING EXPENSES CLAIMED FOR BROKERAGE AND INTEREST. WE FIND THAT ON THE VERY SAME FACTS WHICH WERE AVAILABLE BEFORE THE ASSESSING OFFICER, NOTICE U/S 148 WAS ISSUED TO TAK E A DIFFERENT VIEW THAT THE INCOME FROM SALE OF SHARES WAS TO BE ASSESSED AS BUSINESS INCOM E IN PLACE OF SHORT TERM CAPITAL GAINS. THUS, IN THE INSTANT CASE, IT IS FOUND THAT REOPENI NG OF ASSESSMENT WAS DONE TO TAKE A DIFFERENT VIEW AND IT IS AN ESTABLISHED POSITION OF LAW THAT ON MERE CHANGE OF OPINION, AN ASSESSMENT MADE U/S 143(3) CANNOT BE REOPENED. OUR ABOVE VIEW FINDS SUPPORT FROM THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CIT VS. KELVINATOR OF INDIA LIMITED (2010) 320 ITR 561 (SC) AND IN THE CASE OF CIT VS. FORAMER FRANCE (2003) 264 ITR 566 (SC). 8. THE DECISION OF THE HONBLE GUJARAT HIGH COURT I N THE CASE OF SIDDHI VINAYAK TRANSPORT VS. ACIT (2013) 35 TAXMANN.COM 84 (GUJ.) ALSO SUPPORTS THE VIEW OF THE LD. CIT(A). WE, THEREFORE, DO NOT FIND ANY INFIRMITY I N THE ORDER OF THE LD. CIT(A) WHICH IS HEREBY CONFIRMED AND THE APPEAL OF THE REVENUE IS D ISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 21 ST OF FEBRUARY, 2014 AT AHMEDABAD. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 21/02/2014 GHANSHYAM MAURYA GHANSHYAM MAURYA GHANSHYAM MAURYA GHANSHYAM MAURYA, SR. P , SR. P , SR. P , SR. P. .. .S SS S. .. .