Amazer Investment & Finance Ltd, New Delhi V. DCIT Circle 1 (1), New Delhi

MA 161/DEL/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7168 (ITAT-DELHI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 09-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK SENIOR
• Assessee Lawyers: MANU K GIRI
• Keywords: Capital asset

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) SHRI R.P. TOLANI, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER MA NO.161/DEL/2011 (ARISING OUT OF ITA NO.2478/DEL./2007) (ASSESSMENT YEAR : 2003-04) M/S. AMAZER INVESTMENT & FINANCE LTD., VS. DCIT, CI RCLE 1 (1), 107, BHARAT CHAMBER, NEW DELHI. 70, SCINDIA HOUSE, NEW DELHI. (PAN : AAACA5424A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANU K. GIRI, ADVOCATE REVENUE BY : MS. PRATIMA KAUSHIK, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS MISC. APPLICATION IS FILED BY THE ASSESSEE. T HE ASSESSEE HAS SUBMITTED IN THE APPLICATION U/S 254(2) AS UNDER :- 1. THE TRIBUNAL WHILE DECIDING THE ONLY ISSUE IN T HIS APPEAL IS PARAS (4) & (5) IN TOTO FOLLOWED THE ORDER OF THE JURISDI CTIONAL HIGH COURT IN THE CASE OF SPLENDOR CONSTRUCTION PVT. LTD. COPY OF THE TRIBUNAL ORDER DT: 13.10.2010 IS ENCLOSED HEREWITH AS ANNEXURE A-I. 2. THAT THE FACTS AND CIRCUMSTANCES AND THE ISSUE I N THE ABOVE WERE SIMILAR TO THE PRESENT APPEAL EXCEPT THAT THE SURPL US IN SPLENDOR CONSTRUCTION PVT. LTD. CASE WAS TREATED AS BUSINESS PROFIT BUT THE CIT (A) AND ITAT TREATED THE SAME AS SHORT TERM CAPITAL GAI N. 3. THAT HOWEVER IN THE PRESENT CASE THE A. O. AS WE LL AS THE CIT (AO) TREATED THE SURPLUS AS BUSINESS PROFITS. THE I TAT FOLLOWING THE MA NO.161/DEL/2011 2 HIGH COURT'S ORDER SHOULD HAVE TREATED THE SURPLUS IN THE PRESENT CASE AS SHORT TERM CAPITAL GAIN. 4. SINCE AS HIGH COURT ORDER THE SURPLUS TO BE REGA RDED AS SHORT TERM CAPITAL GAIN. THE ITA T SHOULD HAVE HELD SO WH ILE DISMISSING THE ASSESSEE'S APPEAL AND NOT BUSINESS PROFIT. TO THIS EXTENT THE ORDER OF THE TRIBUNAL PARAS (4) & ( 5) MAY BE RECTIFIED ACCORDIN GLY. 2. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. IN T HIS CASE, THE ITAT HAS DECIDED THE ISSUE BY FOLLOWING THE DECISION OF HON'BLE JURISDIC TIONAL HIGH COURT IN THE CASE OF SPLENDOR CONSTRUCTION P. LTD. VS. ITO IN ITA NO.662 /2009 DATED 16 TH SEPTEMBER, 2009 IN TOTO. IN THAT CASE, THE PROPERTY WAS ACQUIRED AND SHOWN AS A STOCK-IN-TRADE UP TO 31.03.2002 AND THEREAFTER IT WAS CONVERTED INTO CAP ITAL ASSET AND THE SAME WAS SOLD AFTER AROUND 81/2 MONTHS. THE BONAFIDES OF CONVERSION WE RE NOT IN QUESTION. IN THAT CASE, THE HON'BLE HIGH COURT HELD THAT SINCE THE CONVERSION O F THE PROPERTY INTO THE CAPITAL ASSET WAS W.E.F. 1.4.2002 AND ON THAT DAY, THE ASSET CEASED T O BE STOCK-IN-TRADE AND FROM THAT DATE ONLY, THE ASSET WAS TREATED AS CAPITAL ASSET AND TH E SURPLUS AS SHORT TERM CAPITAL GAIN. IN THE ASSESSEES CASE, ASSESSING OFFICER AS WELL AS CIT ( A) TREATED THE PROFIT ARISING ON SALE OF SHARES AS BUSINESS PROFIT WHILE THE ASSESSEE CLAIME D IT TO BE INCOME AS LONG TERM CAPITAL GAIN. THE ISSUE REGARDING PERIOD OF HOLDING COULD HAVE BEEN COVERED BY THE DECISION OF SPLENDOR CONSTRUCTION P. LTD. BUT THE CONVERSION O F SHARES FROM STOCK-IN-TRADE TO INVESTMENT WAS HELD BY AUTHORITIES BELOW AS MALAFID E. NO FINDINGS ON THIS ISSUE HAVE BEEN MADE BY ITAT AND WITHOUT DECIDING THE SAME, THE DEC ISION OF SPLENDOR CONSTRUCTION P. LTD. COULD NOT BE APPLIED IN TOTO. IN VIEW OF THES E FACTS, THERE IS AN APPARENT MISTAKE IN THE ORDER. IN THE INTEREST OF JUSTICE, WE RECALL WHOLE OF THE ORDER. WE DIRECT THE REGISTRY TO FIX THE APPEAL FOR REGULAR HEARING IN DUE COURSE. 5. IN THE RESULT, THE M.A. FILED BY THE ASSESSEE ST ANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 9 TH DAY OF NOVEMBER, 2011. SD/- SD/- (R.P. TOLANI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 9 TH DAY OF NOVEMBER, 2011 TS MA NO.161/DEL/2011 3 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-IV, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.