K.A. MALANI, V. ITO 22(2)1,

MA 539/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7834 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 16-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A L SHARMA
• Keywords: Gift; Business income

Judgement Text

MA 539/MUM/2011 ARISING OUT OF ITA NO. 1586/MUM/2008 (ASST YEAR 2004-05 ) IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI A AA A BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI R S SYAL R S SYAL R S SYAL R S SYAL, ,, , AM AMAM AM & & & & SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM MISCELLANEOUS APPLICATION MISCELLANEOUS APPLICATION MISCELLANEOUS APPLICATION MISCELLANEOUS APPLICATION NO. 539/MUM/2011 NO. 539/MUM/2011 NO. 539/MUM/2011 NO. 539/MUM/2011 ARISING OUT OF ITA NO. 1586/MUM/2008 (ASST YEAR 2004-05 ) K A MALANI 17 JAYASHREE 65 PESTOM SAGAR ROAD NO.2 CHEMBUR MUMBAI 89 VS THE INCOME TAX OFFICER WARD 22(2)( 1),, VASHI NAVI MUMBAI (APPLICANT) (RESPONDENT) PAN NO. AABPM7979B ASSESSEE BY SHRI A L SHARMA REVENUE BY SHRI A K NYAK DT.OF HEARING 2 ND MARCH 2012 DT OF PRONOUNCEMENT 2 ND MARCH, 2012 ORDER ORDER ORDER ORDER PER PER PER PER VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO, , , , JM JMJM JM THIS MISCELLANEOUS APPLICATION FILED BY THE ASSESS EE IS DIRECTED AGAINST THE ORDER DATED 7 TH SEPT 2011 OF THE TRIBUNAL IN ITA NO. 1586/MUM/2008 WHEREBY THE APPEAL OF THE ASSESSEE WAS DISPOSED OFF. 2 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD AR OF THE ASSESSEE HAS POINTED OUT THAT WHILE DECIDING THE APPEAL OF THE A SSESSEE, THE TRIBUNAL HAS NOT ADJUDICATED THE GROUND NO.2 RAISED IN THE APPEAL WI TH RESPECT TO THE LONG TERM CAPITAL GAINS TREATED BY THE ASSESSING OFFICER A S BUSINESS INCOME WHICH WAS CONFIRMED BY THE CIT(A). THE LD AR HAS SUBMITTED T HAT THOUGH THE TRIBUNAL HAS MA 539/MUM/2011 ARISING OUT OF ITA NO. 1586/MUM/2008 (ASST YEAR 2004-05 ) 2 ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF THE SHORT TERM CAPITAL GAINS, WHICH WAS ALSO TREATED BY THE LOWER AUTHORITIES AS BUSINESS INCOME. 3 WE HAVE CONSIDERED THE RIVAL CONTENTION AND CAREF ULLY PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE TRIBU NAL WHILE DECIDING THE APPEAL VIDE IMPUGNED ORDER DATED 7.9.2011 HAD ADJUDICATED TWO ISSUES I.E. (I) REGARDING THE TAXATION OF SHORT TERM CAPITAL GAINS AS BUSINESS INCOME ARISING FROM SALE AND PURCHASE OF SHARES AND (II) TAXATIO N OF GIFT OF RS. 4 LACS U/S 68. AS IT IS CLEAR FROM THE GROUND RAISED BY THE ASSESS EE THAT THE ASSESSEE HAS CLAIMED SHORT TERM CAPITAL AS WELL AS LONG TERM CAP ITAL GAINS DURING THE YEAR UNDER CONSIDERATION AND THE LOWER AUTHORITIES HAVE TREATED BOTH SHORT TERM CAPITAL AND LONG TERM CAPITAL GAINS AS BUSINESS INC OME ARISING FROM SALE AND PURCHASE OF SHARES. 3.1 IT IS APPARENT FROM THE IMPUGNED ORDER THAT THE ISSUE REGARDING LONG TERM CAPITAL GAINS TREATED AS BUSINESS INCOME, AS RAISED BY THE ASSESSEE IN GROUND NO.2, HAS LEFT UN-ADJUDICATED. FOR THE SAKE OF REA DY REFERENCE, WE REPRODUCE THE GROUND NO.2 AS UNDER; THE LD CIT(A) ERRED IN CONFIRMING THE TAXATION OF LONG TERM CAPITAL GAIN AS BUSINESS INCOME NOTWITHSTANDING THE FACT THAT HE H AS ALLOWED THE CLAIM OF INTEREST U/S 48(1) OF I T ACT 1961 AND THAT THE SHA RES WERE HELD FOR MORE THAN 5 TO 6 YEARS AS INVESTMENT AND NOT STOCK IN TRADE, 4 SINCE THE GROUND NO.2 IS LEFT UN-ADJUDICATED; THE REFORE, THERE IS AN APPARENT ERROR/MISTAKE IN THE IMPUGNED ORDER OF THE TRIBUNAL WHICH REQUIRES TO BE RECTIFIED UNDER THE PROVISIONS OF SEC. 254(2) OF THE IT ACT. ACCORDINGLY, WE RECALL THE IMPUGNED ORDER OF THE TRIBUNAL FOR THE L IMITED PURPOSE OF ADJUDICATION OF THE GROUND NO.2 OF THE ASSESSEES APPEAL. MA 539/MUM/2011 ARISING OUT OF ITA NO. 1586/MUM/2008 (ASST YEAR 2004-05 ) 3 5 THE APPEAL OF THE ASSESSEE IS FIXED FOR HEARING O N 3 RD APRIL 2012 FOR HEARING OF GROUND NO.2. SINCE THE NEXT DATE OF HEA RING IS GIVEN IN THE ORDER SHEET AND BOTH THE PARTIES HAVE NOTED THE SAME; THE REFORE, NO SEPARATE NOTICE FOR THE DATE OF HEARING IS TO BE ISSUED. 6 IN THE RESULT, THE MISCELLANEOUS APPLICATION FILE D BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 ND DAY OF MAR 2012 SD/ SD/ SD/ SD/ SD/ SD/ SD/ SD/- -- - ( (( ( R S SYAL R S SYAL R S SYAL R S SYAL ) )) ) ACCOUNTANT MEMBER ( (( ( VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO ) )) ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 2 ND MAR 2012 RAJ* RAJ* RAJ* RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI