The Income Tax Office, Ward-1(3), RAJKOT-GUJARAT V. SKSE Securities Ltd., RAJKOT-GUJARAT

MA 7/RJT/2013

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3894 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 5 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 05-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: USHA N SHROTE
• Keywords: Capital receipt; Benefit of exemption
• Section: 12A; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT L LL LK KK KOZJH OZJH OZJH OZJH OLHE OLHE OLHE OLHE VGEN VGEN VGEN VGEN] YS[KK ] YS[KK ] YS[KK ] YS[KK LNL; ,O LNL; ,O LNL; ,O LNL; ,O EK/ EK/EK/ EK/KQFERK KQFERK KQFERK KQFERK JKW; JKW;JKW; JKW;] U; ] U;] U; ] U;KF KFKF KF;D ;D;D ;D LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER MISC. APPLICATION NOS. 06 & 07/RJT/2013 (ARISING IN I.T.A. NOS. 04 & 05/RJT/2006) ( / ASSESSMENT YEARS : 2003-04 & 2004-05) INCOME TAX OFFICER, WARD 1(3), RAJKOT. / VS. SKSE SECURITIES LTD., SADAR BAZAR, RAJKOT. ./ ./ PAN/GIR NO. : AAFCS 1539 J ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SMT. USHA N. SHROTE, SR. D.R. ! / RESPONDENT BY : SHRI M. J. RANPURA, A.R. ' #$ % ! & / DATE OF HEARING 03/07/2018 '( ! & / DATE OF PRONOUNCEMENT 27/09/2018 )* / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE REVENUE BY WAY OF THESE MISCELLANEOUS APPLICATI ON IS SEEKING TO RECTIFY THE APPARENT MISTAKE CREPT IN THE ORDER OF HONBLE TRIBUNAL IN ITA NOS.04/RJT/2006 & 05/RJT/2006 VIDE ORDER DATED 26/02/2010 PERTAINING TO THE AYS 2003-04 & 2004-05. MA NOS.6 & 7/RJT/2013 (IN ITA NOS. 4 & 5/RJT/2006) A.Y. 2003-04 & 2004-05 - 2 - 2. FIRST WE TAKE UP MISC. APPLICATION NO.06/RJT/201 3 FILED BY THE REVENUE. THE REVENUE BEFORE US HAS SUBMITTED AS UND ER: MAY IT PLEASE YOUR HONOUR. 2. IN THIS CASE, THE REVENUE HAD FILED AN APPEAL BE FORE THE HON'BLE GUJARAT HIGH COURT AGAINST THE ORDER OF THE HON'BLE ITAT, ITA NO. 4/RJT/2006 FOR A.Y. 2003-04. THE FOLLOWING QUESTIONS WERE RAISED BY THE REVENUE BEFORE HON'BLE GUJARAT HIGH COURT. (A) 'WHETHER THE APPELLATE TRIBUNAL IS RIGHT IN LAW AND ON FACTS IN DIRECTING THE DEPARTMENT TO ALLOW REGISTRA TION U/S 12A AS WELL AS THE BENEFIT OF EXEMPTION U/S 11 OF T HE ACT.?' (B) 'WHETHER THE APPELLATE TRIBUNAL IS RIGHT IN LA W AND ON FACTS IN GRANTING REDUCTION OF RS. 1,30,18,141/- MA DE ON ACCOUNT OF CAPITAL RECEIPTS FROM TOTAL ASSESSED INC OME OF RS. 1,40,95,052/-?' 3. THE HON'BLE GUJARAT HIGH COURT VIDE ITS ORDE R DTD. 13.02.2013 HAS DISPOSED OF THE APPEAL OF THE REVENUE OBSERVING AS UNDER: 'HAVING PERUSED THE IMPUGNED ORDER OF THE TRIBUNAL WITH THE ASSISTANCE OF LEARNED COUNSEL FOR THE REVENUE, WE N OTICE THAT QUESTIONS WHICH ARE POSED BEFORE US, FIND NO DISCUSSION IN TH E IMPUGNED ORDER. IT WOULD THEREFORE, BE OPEN FOR THE REVENUE TO APPROAC H THE TRIBUNAL IN RECTIFICATION SEEKING DECISION ON SUCH QUESTIONS RA ISED IN THEIR APPEALS FILED BEFORE THE TRIBUNAL. WITH ABOVE OBSERVATIONS TAX APPEALS ARE DISPOSED OF AT THIS STAGE. PRAYER IN VIEW OF THE ABOVE, IT IS KINDLY REQUESTED TO REC TIFY THE ORDER DATED 26.02.2010 BY CLARIFYING THE POSITION WITH RE GARDS 'THE ISSUE OF NATURE OF RECEIPT OF 'HARDWARE FUND' AND 'TRADE FUN D' IN A.Y. MA NOS.6 & 7/RJT/2013 (IN ITA NOS. 4 & 5/RJT/2006) A.Y. 2003-04 & 2004-05 - 3 - 2003-04 AND A.Y. 2004-05 CANNOT BE DECIDED ON THE B ASIS OF NATURE OF RECEIPT OF 'SHARE CAPITAL' FOR A.Y. 2002-03' AS OBSERVED BY THE HON'BLE GUJARAT HIGH COURT. 3. ON THE OTHER HAND THE ASSESSEE HAS SUBMITTED AS UNDER: 1. THE DEPARTMENT HAS FILED THIS MA PLEADING THAT , THE HON'BLE BENCH HAD NOT ADJUDICATED UPON THE FOLLOWING GROUND RAISED IN APPEAL ARISING OUT OF ITA NO.5/RJT/2006. THE HON'BLE ITAT RAJKOT BENCH IS REQUESTED TO RECTI FY THE ORDER DATED 26.2.2010 BY CLARIFYING THE POSITION WI TH REGARDS TO THE ISSUE OF NATURE OF RECEIPT OF 'HARDWARE FUND' A ND 'TRADE FUND' AS THE SAME CANNOT BE DECIDED ON THE BASIS OF NATURE OF RECEIPT OF SHARE CAPITAL' FOR A Y 2002-03. 2. IN THIS CONNECTION, THE RESPONDENT BEGS TO SUBM IT THAT, THE ABOVE GROUND HAS BEEN ADJUDICATED BY THE HON'BLE ITAT. FO R THE SAKE OF CONVENIENCE OF THE HON'BLE MEMBERS, THE GROUND RAIS ED IN FORM NO. 36, BY THE REVENUE IS REPRODUCED HEREUNDER- THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN GR ANTING REDUCTION OF RS 75,70,000/- ON ACCOUNT OF CAPITAL R ECEIPTS FROM TOTAL INCOME OF RS 1,68,38,536/-. 3. THIS AMOUNT OF RS 75,70,000/- INCLUDES HARDWARE FUNDS AND TRADE FUNDS. IN FACT, THE HON'BLE TRIBUNAL, IN ITS ORDER UNDER ITA NO 3, 4 & 5 / RJT /2006 DATED 26.2.2010 VIDE PARA 2, HAD TAKEN UP APPEALS FOR THREE YEARS TOGETHER AS 'THE GROUNDS TAKEN BY THE REVENUE IN ALL THESE APPEALS ARE SAME EXCEPT FIGURES' PRIMARILY TO AVOID REPETITION OF FINDING. THE BASIC QUESTION ARISING FROM THE GROUND S OF ALL THE THREE YEARS WAS WHETHER THE RECEIPTS TAXED BY THE DEPARTM ENT WAS CAPITAL IN NATURE OR REVENUE IN NATURE, ALTHOUGH BY ANY NAME C ALLED VIZ., SHARE CAPITAL OR HARD WARE FUND OR TRADE FUND. THE REVENU E'S APPEAL WAS MA NOS.6 & 7/RJT/2013 (IN ITA NOS. 4 & 5/RJT/2006) A.Y. 2003-04 & 2004-05 - 4 - DISMISSED AND IT HAS BEEN HELD THAT, 'IN OTHER TWO APPEALS FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05, THE GROUNDS A RE SAME AND BEING THE SET OF FACTS, WE MAINTAIN THE CONSISTENCY WITH OUR ORDER PASSED FOR THE ASSESSMENT YEAR 2002-03 AND ACCORDIN GLY, DISMISS THESE APPEALS ALSO'. 4. IN VIEW OF THE ABOVE, IT IS PRAYED THAT THE MA IS NOT TECHNICALLY TENABLE AND HENCE, THE SAME MAY BE QUASHED. 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ITAT IN THIS CASE HAS PASSED THE CONSOLIDATED ORDER FOR THE APPEALS FILED BY THE REVENUE BEARING ITA NOS. 3/RJT/2006, 4/RJT/2006 AND 5/RJT/2 006 PERTAINING TO THE AYS 2002-03, 2003-04 AND 2004-05 VIDE ORDER DATED 2 6-02-2010. 5. THE ITAT HAS TAKEN THE ITA NO. 3/RJT/2006 AS THE LEAD CASE PERTAINING TO THE AY 2002-03 AND ACCORDINGLY HELD T HAT THE FINDING OF THIS GROUND OF APPEAL SHALL BE APPLIED TO THE REMAI NING APPEALS OF REVENUE AS THE ISSUE IS IDENTICAL. 6. THE RELEVANT OBSERVATION OF THE ITAT IN ITA NO. 3/RJT/2006 PERTAINING TO THE AY 2002-03 READS AS UNDER: 2. GROUNDS TAKEN BY THE REVENUE IN ALL THESE THREE APPEALS ARE SAME EXCEPT FIGURES, THEREFORE WE ARE REPRODUCING THE GR OUNDS OF APPEAL FOR THE ASSESSMENT YEAR 2002-03 AND DEALING WITH THIS A PPEAL SO AS TO REPEAT REPETITION OF FINDING. MA NOS.6 & 7/RJT/2013 (IN ITA NOS. 4 & 5/RJT/2006) A.Y. 2003-04 & 2004-05 - 5 - 1. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN GRANTING REDUCTION OF RS.3,01,60,000/- ON ACCOUNT OF CAPITAL RECEIPTS FROM TOTAL ASSESSED INCOME OF RS.3,29,51,982/- FROM THE ABOVE IT IS CLEAR THAT THE ISSUE RAISED BY THE REVENUE IN ITA NO. 3/RJT/2006 PERTAINING TO THE AY 2002-03 WAS DULY AD JUDICATED BY THE ITAT IN ITS ORDER DATED 26-2-2010. 7. WE FURTHER NOTE THAT THE ISSUE RAISED BY THE REV ENUE IN OTHER APPEALS I.E. ITA NOS.4/RJT/2006 AND 5/RJT/2006 PERT AINING TO THE AYS 2003-04 AND 2004-05 ARE IDENTICAL TO THE ISSUE RAIS ED IN ITA NO.3/RJT/2006. FOR BETTER UNDERSTANDING THE FACTS O F THE CASE WE FIND IMPORTANT TO REPRODUCE GROUNDS OF APPEAL RAISED BY THE REVENUE IN ITA NOS. 4/RJT/2006 AND 5/RJT/2006 PERTAINING TO THE AY S 2003-04 AND 2004- 05 AS DETAILED UNDER: 8. GROUND OF APPEAL OF THE REVENUE IN ITA NO.4/RJT/ 2006 PERTAINING TO THE AY 2003-04 READS AS UNDER: 1. LD CIT(A) HAS ERRED IN LAW & ON FACTS IN GRANTI NG REDUCTION OF RS.1,30,18,141/- ON ACCOUNT OF CAPITAL RECEIPTS FRO M TOTAL ASSESSED INCOME OF RS.1,40,95,052/- 9. GROUND OF APPEAL OF THE REVENUE IN ITA NO.5/RJT/ 2006 PERTAINING TO THE AY 2004-05 READS AS UNDER: MA NOS.6 & 7/RJT/2013 (IN ITA NOS. 4 & 5/RJT/2006) A.Y. 2003-04 & 2004-05 - 6 - 1. LD CIT(A) HAS ERRED IN LAW & ON FACTS IN GRANTI NG REDUCTION OF RS.75,70,000/- ON ACCOUNT OF CAPITAL RECEIPTS FROM TOTAL ASSESSED INCOME OF RS.1,68,38,536/- ON PERUSAL OF THE ABOVE, THERE REMAINS NO AMBIGUITY THAT THERE WERE IDENTICAL ISSUES IN ALL THE YEARS AS DISCUSSED ABOV E AND THE ITAT INSTEAD OF ADJUDICATING THE ISSUE SEPARATELY FOR THE INDIVI DUALS YEARS HAS PASSED THE CONSOLIDATED ORDER. 10. IN VIEW OF ABOVE, WE HOLD THAT THE MA FILED BY THE REVENUE ALLEGING THAT THE ISSUE RAISED BY IT WAS NOT ADJUDI CATED BY THE ITAT IS NOT CORRECT. RATHER WE NOTE THAT THE ITAT HAS PASSED DE TAILED AND SPEAKING ORDER FOR THE AY 2002-03 WHICH WILL BE EQUALLY APPL ICABLE TO OTHER GROUNDS OF APPEAL IN REMAINING YEARS. THUS WE HOLD THAT THERE IS NO APPARENT MISTAKE IN THE ORDER OF ITAT AS ALLEGED BY THE REVENUE IN ITS MISCELLANEOUS APPLICATION AS DISCUSSED ABOVE. HENCE THE GROUND RAISED BY THE REVENUE IN ITS MA IS DISMISSED. 11. NOW WE COMING IN MISC APPLICATION NO.07/RJT/201 3: 12. THE ISSUE RAISED BY THE REVENUE IN THIS MA IS I DENTICAL TO THE ISSUE RAISED IN MA 06/RJT/2006 WHICH HAS ALREADY BEEN DIS MISSED BY US IN MA NOS.6 & 7/RJT/2013 (IN ITA NOS. 4 & 5/RJT/2006) A.Y. 2003-04 & 2004-05 - 7 - PARA NO. 4 TO 10 OF THIS ORDER. RESPECTFULLY FOLLOW ING THE SAME WE DISMISS THE GROUND RAISED BY THE REVENUE IN THIS MA . 13. IN THE RESULT, BOTH THE MISC. APPLICATIONS ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 27/09/2018 SD/- SD/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; YK S[KK LNL; U;KF;D LNL; YK S[KK LNL; U;KF;D LNL; YK S[KK LNL; U;KF;D LNL; YK S[KK LNL; (MADHUMITA ROY) (WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 27/09/2018 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. + & ' ,& / CONCERNED CIT 4. ' ,& () / THE CIT(A). 5. /$0 1 2&2# , , 45) + ) / DR, ITAT, AHMEDABAD. 6. 1 67 8 % / GUARD FILE. / BY ORDER, /& 2& //TRUE COPY// / ! '#$ ( DY./ASSTT.REGISTRAR) ! $%! &, / ITAT, AHMEDABAD