M/s. Tecee Investments, Ahmedabad V. The ACIT.,(OSD)Circle-10, Ahmedabad

MA 113/AHD/2012

• Counselvise Citation: [2013] 123 COUNSELVISE.COM (IT) 9758 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 20-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Assessee Lawyers: S N DIVETIA
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH BEFORE: SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARA T, JUDICIAL MEMBER M/S. TECEE INVESTMENTS 702, SHIKHAR COMPLEX MITHAKHALI SIX ROADS, NAVARANGPURA, AHMEDABAD(APPELLANT) VS. ASSTT. COMMISSIONER OF INCOME-TAX (OSD) CIRCLE-10, AHMEDABAD (RESPONDENT) REVENUE BY : SRI D.K. SINGH, SR. D.R. ASSESSEE BY : SRI S.N. DIVETIA, A.R. DATE OF HEARING : 04-01-2013 DATE OF PRONOUNCEMENT : 18-01-2013 / ORDER PER : KUL BHARAT, JUDICIAL MEMBER:- PRESENT MISCELLANEOUS APPLICATION HAS BEEN FILED B Y THE ASSESSEE ON THE GROUND THAT THE CONCLUSION REACHED BY THE TRIBU NAL IN PARA 5 OF THE ORDER DATED 23-03-2012 IS NOT THE CORRECT FINDING ON FACT S AND IN ACCORDANCE WITH LAW. M.A. NO. 113 /AHD/2012 (ARISING OUT OF ITA NO. 2866/A/2009) A.Y.:-2006-07 M.A. NO. 113/AHD/2012 A.Y. 2006-07 PAGE NO M/S. TECEE INVESTMENTS VS. ASSTT. COMMISSIONER OF I NCOME-TAX 2 2. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MATTER WAS REMITTED TO THE LD. CIT(A) BY THE TRIBUNAL ON THE B ASIS THAT THE LD. CIT(A) FAILED TO ADVERT ANYTHING QUA THE APPLICABILITY OF THE JUDGMENT CITED BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER AND ALSO ON THE BASIS THAT THE LD. CIT(A) DID NOT PASS A SPEAKING ORDER. LEARNED COUN SEL FOR THE ASSESSEE SUBMITTED THAT THE ORDER OF THE LD. CIT(A) IS SPEAK ING AS HE HAS CONSIDERED ALL THE ASPECTS OF THE MATTER. HE FURTHER SUBMITTE D THAT WITHOUT PREJUDICE TO AFORESAID SUBMISSION THAT THE ORDER MAY BE MODIFIED AND AN OBSERVATION MAY BE MADE TO THE FACT THAT THE LD. CIT(A) WOULD PASS A SPEAKING ORDER ON MERIT WITHOUT BEING INFLUENCED BY THE OBSERVATION I N PARA 5 OF THE IMPUGNED ORDER OF THE TRIBUNAL. ON THE CONTRARY, LD. SR. D. R. SUBMITTED THAT THERE IS NO APPARENT MISTAKE ON THE ORDER OF THE TRIBUNAL. HE SUBMITTED THAT NO ERROR IS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSES SEE. HE SUBMITTED THAT LEARNED COUNSEL FOR THE ASSESSEE IS TRYING TO PRAY FOR REVIEW OF THE ORDER WHICH IS NOT PERMISSIBLE UNDER LAW. 3. WE HAVE HEARD THE RIVAL SUBMISSION PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER HAS REJECTED THE SUBMISSION OF THE ASSESSEE IN PARA 6.2 OF HIS ORDER. THE ASSESSING OFFICER RELIED ON THE DECISION OF THE HON BLE HIGH COURT OF GUJRAT RENDERED IN THE CASE OF H MOHMED & COMPANY VS. CIT (1977) 107 ITR 637 (GUJ), THE JUDGMENT OF HONBLE SUPREME COURT RENDER ED IN THE CASE OF SARDAR INDRA SINGH & SONS LTD VS. CIT 24 ITR 415 A ND ALSO THE JUDGMENT OF HONBLE SUPREME COURT RENDERED IN THE CASE OF CI T VS. ASSOCIATED INDUSTRIAL DEVELOPMENT CO. (P) LTD. (1971) 82 ITR 586 (SC). THE LD. CIT(A) HAS DECIDED THE ISSUE AS UNDER:- M.A. NO. 113/AHD/2012 A.Y. 2006-07 PAGE NO M/S. TECEE INVESTMENTS VS. ASSTT. COMMISSIONER OF I NCOME-TAX 3 3.1 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT. THE CASE OF THE APPELLANT IS THAT (I) IN THE BOOKS OF ACCOUNTS THE APPELLANT HAS SHOWN PURCHASE OF SHARES AS INVESTMENTS & NOT AS STOCK-IN-TRADE. (II) THE PARTNERS HAVE ANOTHER FIRM M/S. HARCHE M DYELEX WHEREIN THE PURCHASE OF SHARES IS SHOWN AS STOCK-IN-TRADE. IN T HE HANDS OF THE APPELLANT FIRM THE PURCHASE IS ALWAYS SHOWN AS INVE STMENT. (III) THE APPELLANT HAS USED ITS OWN FUNDS FOR PURCHASE OF SHARES (IV) THE INTENTION OF THE APPELLANT WAS INVESTMEN T & NOT TRADING IN SHARES. THE CLOSING STOCK OF SHARES OF RS. 90,78,23 9/- INCLUDED SHARES OF RS. 61,67,249/- WHICH ARE HELD FOR MORE THAN 6 MON THS AS ON 31 -3-5006. (V) THE REPETITIVE TRANSACTIONS OF PURCHASE AN D SAID IN THE SAME SCRIPTS ARE VERY LIMITED. (VI) IN THE PAST THE APPELLANT HAS HELD THE SHA RES AS INVESTMENT AND IN A. Y 2004-05 & 2005-06, THE PROFIT THEREON HAS BEEN ASSESSED AS CAPITAL GAIN BY ASSESSING OFFICER U/S. 143(3). (VII) SINCE THE INCEPTION OF THE FIRM IN 1999 TH E APPELLANT HAS SHOWN PURCHASE OF SHARES UNDER THE HEAD OF INVESTMENTS AN D THE PROFIT IS TAXED AS CAPITAL GAIN SINCE A Y 2000-01 TO A Y 2005-06. (VIII) THE FIRM WAS INCORPORATED ON 18-1-1999 WI TH THE OBJECT MAKING INVESTMENT IN SHARES, DEBENTURES AND GOVT SECURITIE S. 3.2 RIGHT FROM THE DATE OF ITS INCEPTION, THE PROFI T ON SHARES IS BEING ASSESSED AS CAPITAL GAINS BY THE ASSESSING OFFICER TILL A Y 2005-06. THE ASSESSING OFFICER HAS NOT MENTIONED ANY REASONS AS TO WHY HE HAS DIFFERENT STAND IN A.Y. 2006-07. IN FACT IN A Y 2004-05 AND A Y 2005-06 THE ASSESSMENT ORDER WAS PASSED U/S 143(3) AND THE PROFIT ON SALE OF SHARES WAS ASSESSED BY HIM AS CAPITAL GAINS. FUR THER THE APPELLANT HAS SHOWN LONG TERM CAPITAL GAIN OF RS. 29 LACS APPROX, WHEREAS THE SHORT TERM CAPITAL GAIN IS OF RS, 14 LACS (APPROX). THIS SHOWS THAT THE APPELLANT HAS HELD MOST OF THE SHARES FOR MORE THAN ONE YEAR. ONCE IN A Y 2004-05 2005-06, THE ASSESSING OFFICER HAS HELD SUCH SHARES AS INVESTMENT ARE SOLD DURING THE YEAR TO CLAIM LONG TERM CAPITAL GAI N, THE PROFIT THEREON CANNOT BE TAXED AS BUSINESS INCOME. FURTHER THE DEED OF PARTNERSHIP ALSO DOES NOT INDICATE THAT THE SHARES ARE PURCHASE D BY THE APPELLANT FOR TRADING PURPOSE. I THEREFORE, AGREE WITH THE APPELL ANT THAT PROFIT ON SALE OF SHARES IS TO BE ASSESSED AS CAPITAL GAIN AS HAS BEE N DONE BY THE ASSESSING OFFICER IN EARLIER YEARS. 4. FROM THE AFORESAID FINDING THERE IS NO WHISPER A BOUT THE JUDGMENTS AS RELIED BY THE ASSESSING OFFICER. LD. CIT(A) HAS DE CIDED THE ISSUE IN FAVOUR OF THE ASSESSEE ON THE BASIS THAT ONCE IN ASSESSMEN T YEAR 2004-05 AND 2005- 06, THE ASSESSING OFFICER HAS HELD SUCH SHARES AS I NVESTMENT WHICH ARE SOLD M.A. NO. 113/AHD/2012 A.Y. 2006-07 PAGE NO M/S. TECEE INVESTMENTS VS. ASSTT. COMMISSIONER OF I NCOME-TAX 4 DURING THE YEAR TO CLAIM LONG TERM CAPITAL GAIN ABO UT THE PROFIT THEIR OWN CANNOT BE TAXED AS BUSINESS INCOME. IN THIS VIEW O F THE MATTER, WE DO NOT FIND ANY MERIT INTO THE CONTENTION OF THE LEARNED C OUNSEL FOR THE ASSESSEE. WE FIND THAT THE ORDER OF THE LD. CIT(A) IS NOT SPEAKI NG AND HAS NOT CONSIDERED ALL THE OBJECTIONS OF THE ASSESSING OFFICER, THEREF ORE, WE DECLINED TO RECALL OUR ORDER DATED 23-03-2012. HOWEVER, IN THE INTERE ST OF JUSTICE, IT IS CLARIFIED THAT LD. CIT(A) WOULD DECIDE THE APPEAL O N MERIT, BY GIVING FAIR CHANCE OF HEARING TO THE PARTIES AS PER LAW. 5. IN THE RESULT, THE APPLICATION IS DISPOSED OF AS INDICATED ABOVE. SD/- SD/- (A.K. GARODIA) (KUL BHARAT ) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 18/01/2013 AK / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '#