DCIT,Circle-9, Kolkata, Kolkata V. M/s. Sruya Shakri Advisory Pvt. Ltd., Kolkata

ITA 918/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75038 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 12-06-2012
• Court: TRIBUNAL
• Department Lawyers: AMIT KUMAR MAITRA
• Keywords: Business income; Speculation loss; Difference of opinion; Change of opinion
• Section: 115JB; 147; 154; 15

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 918/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2008-09 DEPUTY COMMISSIONER OF INCOME-TAX, VS. M/S. SURYAS AKTI ADVISORY PVT. LTD. CIRCLE-9, KOLKATA (PAN:AADCS5838C) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 28.01.2014 DATE OF PRONOUNCEMENT: 30.01.2014 FOR THE APPELLANT: SHRI AMIT KUMAR MAITRA, JCIT, SR . DR FOR THE RESPONDENT: SHRI SUBHAS AGARWAL, ADVOCAT E $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-VIII, KOLKATA IN APPEAL NO.22/CIT(A)-VIII/KOL/10-11DATED 05.03.2012. ASSES SMENT WAS FRAMED BY DCIT, CIRCLE-9, KOLKATA U/S. 147 R.W.S. 143(1) OF THE INCOME-TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008-09 VIDE HIS ORDER DATED 17 .05.2010. 2. THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) IN ALLOWING SETTING OFF OF SPECULATION LOSS OF EARLIER YEARS AG AINST THE PROFIT OF THE SAME BUSINESS. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING SET OFF OF SPECULATION LOSS OF EARLIER YEA R AGAINST PROFIT OF THE SAME BUSINESS DURING THE CURRENT YEAR WHEREAS THE ACT CLEARLY SPE CIFIED THAT SUCH LOSS CAN BE SET OFF AGAINST ANY OTHER SPECULATION BUSINESS. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE AO NOTED IN HIS ASSESSMENT ORDER THAT THIS LOSS PERTAINS TO AY 2006-07 AND IN AY 2006-07 IT WAS TREATED AS SPECULATION LOSS AND ACCORDING TO HIM, THIS LOSS CANNOT BE SET OFF FROM THE BUSINESS INCOME OF AY 2008-09 AND HE DISALLOWED BY INVOKING THE PROVISIONS OF SECTION 73 OF THE ACT. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFO RE CIT(A), WHO ALLOWED THE CLAIM OF ASSESSEE BY OBSERVING AS UNDER: 2 ITA NO. 918/K/2012 M/S. SURYASAKTI ADVISORY PVT. LTD. , AY:2008-09 IT IS ALSO BROUGHT TO MY NOTICE THAT THE APPELLANT HAD SPECULATION LOSS AS PER EXPLANATION TO SECTION 73 FOR THE ASSESSMENT YEAR 2 006-2007 AMOUNTING TO RS.1 ,52,52,380/- WHICH WAS CARRIED FORWARD TO BE SET-OF F IN THE SUBSEQUENT YEARS I.E. ASSESSMENT YEAR 2007-2008 THE APPELLANT HAD PROFIT FROM SHARE TRADING AMOUNTING TO RS.90,08,664/- AND IN A.Y-2008-2009 PROFIT AMOUNTI NG TO RS 51,71 ,250/-. IT IS STATED THAT IN THE ASSESSMENT YEAR 2007-2008 THE PROFIT OF RS.90,08,664/- WAS SET-OFF AGAINST THE BROUGHT FORWARD LOSSES OF ASSESSMENT YEAR 2006- 2007, BUT, HOWEVER IN THE YEAR UNDER APPEAL I.E. 2008-2009 THE ASSESSING OFFICER D ID NOT ALLOW THE PROFIT TO BE SET OFF AGAINST BROUGHT FORWARD LOSS LOSSES OF A.Y-2006-200 7. THE APPELLANT ALSO BRINGS IT TO MY NOTICE THAT IN T HE ASSESSMENT YEAR 2007-2008 A RECTIFICATION PETITION WAS ALSO FILED BY THE APPELL ANT IN REGARD TO NON ALLOWANCE OF CLAIM OF STT AGAINST MAT. AN ORDER WAS ALSO PASSED U/S 15 4 OF THE INCOME TAX ACT 1961 AND WHILE PASSING THE ORDER U/S 154 OF THE INCOME TAX A CT 1961 IT WAS OPEN FOR THE ASSESSING OFFICER TO DISALLOW THE SET OFF OF CARRIE D FORWARD LOSSES. BUT, THE ASSESSING OFFICER ALLOWED THE SET OFF. HOWEVER IN THE YEAR U NDER APPEAL THE SAME SET OFF OF BROUGHT FORWARD LOSSES WAS NOT ALLOWED, ACCORDING T O THE APPELLANT, THERE IS A CLEAR CHANGE OF OPINION BY THE ASSESSING OFFICER. THUS, I T IS CONTENDED THAT WHEN THE SET OFF OF CARRIED FORWARD/ BROUGHT FORWARD LOSSES IS ALLOWED IN THE ASSESSMENT YEAR 2007-2008, THE SAME SHOULD BE ALLOWED IN THE ASSESSMENT YEAR 2 008-2009 ALSO. I HAVE CONSIDERED THE SUBMISSIONS AND PERUSED THE M ATERIAL PLACED ON RECORD. FROM THE FACTS AS BROUGHT ON RECORD, IT IS APPARENT THAT THE RE HAS NOT BEEN ANY CHANGE IN THE NATURE OF THE TRANSACTIONS DURING THE YEAR UNDER CO NSIDERATION AS COMPARED TO THE PRECEDING YEAR. THE NATURE OF TRANSACTIONS IN SHARE S AND SECURITES AS CARRIED OUT BY THE APPELLANT COMPANY IS ADMITTEDLY SPECULATIVE. LN CIT V. SOORAJMALL BAIJNATH AGENCIES (P) LTD.[2005]272 ITR 325, IT HAS BEEN OBSERVED THAT SE CTION 73(2) PRESCRIBES THAT LOSS OF THE SPECULATION BUSINESS OF A PARTICULAR YEAR CAN B E CARRIED FORWARD TO THE SUBSEQUENT PREVIOUS YEAR AND BE SET OFF OR BE ADJUSTED AGAINST THE INCOME OF ANY SPECULATION BUSINESS OF THE SAID PREVIOUS YEAR. THE WORD ANY IS INCLUSIVE. THE SAID LOSS CAN BE SET OFF OR ADJUSTED AGAINST THE INCOME OF THE SAME SPECULAT ON BUSINESS OR AGAINST THE INCOME OF ANY OTHER SPECULATION BUSINESS CARRIED ON BY THE ASSESSEE IN FOLLOWING ASSESSMENT YEAR. IT WOULD NOT BE CORRECT TO SAY THAT SUCH LOSS CAN BE SET OFF OR ADJUSTED ONLY AGAINST INCOME FROM ANY OTHER SPECULATION BUSINESS BUT NOT AGAINST THE INCOME FROM THE SAME SPECULATION BUSINESS. HAVING REGARD TO THE SUBMISSI ONS ON BEHALF OF THE APPELLANT, THE PAST HISTORY OF THE CASE, AND ALSO THE EXP1ANATION UNDER SECTON 73(2) OF THE ACT, I FND MERIT N THE SUBMISSIONS OF THE APPELLANT. THE ACTI ON OF THE ASSESSING OFFICER IN REJECTING THE CLAIM OF SET OFF OF BROUGHT FORWARD SPECULATION LOSS AGAINST SIMILAR TRANSACTIONS DURING THE YEAR UNDER CONSIDERATION IS NOT JUSTIFIE D. THEREFORE, THE ASSESSING OFFICER IS HEREBY DIRECTED TO ALLOW THE SET OFF OF THE CARRIED FORWARD SPECULATION LOSS AGAINST INCOME FROM SPECULATION BUSINESS AS CLAIMED BY THE APPELLANT. THE APPELLANT THUS GETS A RELIEF OF RS.51,71,250/- ON THIS GROUND. AGGRIEVED, REVENUE CAME IN APPEAL BEFORE US. 4. WE FIND THAT THIS LOSS OF AY 2006-07 AMOUNTING T O RS.1,52,52,380/- WAS ALLOWED TO BE CARRIED FORWARD TO BE SET OFF OF SUBSEQUENT YEARS SPECULATION BUSINESS PROFIT AGAINST THIS SPECULATION LOSS. THE ASSESSEE HAS CLAIMED THIS SP ECULATION LOSS AMOUNTING TO RS.90,08,664/- FOR AY 2007-08 AGAINST ITS PROFITS AND BALANCE SUM OF RS.51,71,250/- WAS CLAIMED IN THE RELEVANT AY 2008-09. IN AY 2007-08, THERE IS NO OB JECTION ON THE PART OF THE REVENUE. IT IS 3 ITA NO. 918/K/2012 M/S. SURYASAKTI ADVISORY PVT. LTD. , AY:2008-09 ALSO A FACT THAT REVENUE HAS TREATED THIS LOSS IN A Y 2006-07 AS SPECULATION LOSS ARISING OUT OF THE SAME BUSINESS. IN THIS YEAR ALSO THE ASSESSEE IS C ARRYING ON SHARE TRADING ACTIVITY IN SHARE BUSINESS WHICH IS A SPECULATION BUSINESS IN TERM OF EXPLANATION TO SECTION 73 OF THE ACT. ONCE THIS IS THE POSITION, WE FIND NO INFIRMITY IN THE O RDER OF CIT(A) AND WE CONFIRM THE SAME. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 5. COMING TO NEXT ISSUE IN THIS APPEAL OF REVENUE A GAINST THE ORDER OF CIT(A) ALLOWING REBATE ON ACCOUNT STT FROM THE TAX CALCULATED U/S. 115JB OF THE ACT I.E. MAT TAX. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NOS. 2 AND 3: 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING REBATE ON ACCOUNT OF STT (SECURITY TRANSAC TION TAX) FROM THE TAX (MAT) CALCULATED U/S. 115JB WITHOUT CONSIDERING THAT THE REBATE U/S. 88E IS ONLY ALLOWABLE FROM TAX ON NORMAL TOTAL INCOME. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING REBATE U/S. 88E ON ACCOUNT OF STT (SECURIT Y TRANSACTION TAX) FROM TAX (MAT) CALCULATED U/S. 115JB WITHOUT CONSIDERING THE FACT THAT THE REBATE UNDER THIS SECTION IS ONLY DEDUCTIBLE FROM INCOME-TAX ARISES FOR TAXABLE SECURITIES UPTO THAT EXTENT BY APPLYING AVERAGE RATE OF INCOME TAX ON SUCH INCOME AS SPECIF IED IN SEC. 88E(2). 6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVO UR OF ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. M/S. WINRO COMMERCIAL INDIA LTD. IN GA NO.274 OF 2013 IN ITAT NO. 25 OF 2013 AN D CIT VS. M/S. TODI SECURITIES (P) LTD. IN GA NO.425 OF 2013 IN ITAT NO.32 OF 2013 DATED 25 .03.2013, WHEREIN THE HONBLE HIGH COURT HAS HELD AS UNDER: THE COURT: THE QUESTION FOR CONSIDERATION IN BOTH THE APPEALS IS WHETHER REBATE UNDER SECTION 88E IN RESPECT OF SECURITIES TRANSACTION TA X IS ADMISSIBLE IN A CASE WHERE THE INCOME IS ASSESSED UNDER THE CONCEPT OF MINIMUM ALT ERNATIVE TAX UNDER SECTION 115JB OF THE INCOME TAX ACT. MR. KHAITAN, LEARNED SENIOR ADVOCATE HAPPENED TO BE PRESENT WHEN THE MATTER WAS TAKEN UP FOR HEARING. HE POINTED OUT THAT THIS QUE STION IS ALREADY COVERED BY A JUDGMENT OF THE KARNATAKA HIGH COURT. HE PRODUCED A COPY OF THE JUDGMENT IN THE CASE OF THE COMMISSIONER OF INCOME TAX VS. M/S. HORIZON CAPITAL LTD. WHEREIN THE FOLLOWING VIEW WAS TAKEN: 17. THEREFORE, THE CONTENTION THAT THIS BENEFIT I S NOT AVAILABLE TO THE ASSESSEE WHOSE TOTAL INCOME IS ASSESSED UNDER SECTI ON 115JB HAS NO SUBSTANCE. IN OTHER WORDS, WHEN THE TOTAL INCOME I S ASSESSED AND THE TAX CHARGEABLE IS COMPUTED, IT IS FROM THAT TAX WHICH I S CHARGEABLE, THE TAX PAID UNDER SECTION 88E IS GIVEN DEDUCTION, BY WAY O F REBATE, UNDER SECTION 87 OF THE ACT. THIS IS THE LEGISLATIVE INTENT. TH IS IS A PROMISE TO GIVE 4 ITA NO. 918/K/2012 M/S. SURYASAKTI ADVISORY PVT. LTD. , AY:2008-09 DEDUCTION OF THE TAX ALREADY PAID. THIS IS THE MOD E IN WHICH TAX ALREADY PAID IS HANDED BACK AT THE TIME OF FINAL COMPUTATIO N. WE ARE OF THE OPINION THAT THE VIEWS EXPRESSED BY T HE KARNATAKA HIGH COURT ARE REASONABLE AND ARE ALSO ADOPTED BY US. THE QUESTIO NS ARE ACCORDINGLY ANSWERED. BOTH THE APPEALS ARE THUS DISPOSED OF. SINCE THE ISSUE IS SQUARELY COVERED IN FAVOUR OF AS SESSEE AND RESPECTFULLY FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT CITED SUPRA, WE UPHOLD THE ORDER OF CIT(A). THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 7. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30.01.2 014 SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30TH JANUARY, 2013 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT DCIT, CIRCLE-9, KOLKATA. 2 ./,- / RESPONDENT M/S. SURYASAKTI ADVISORY PVT. LTD. 2 5/97, PRINE GOLAM MOHHAMMAD SAHA ROAD, KOLKATA-700 045. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .