M/s R.K Somani Family Trust, Kanpur V. DY. Commissioner of Income Tax-1, Kanpur

MA 78/LKW/2016

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6264 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 14-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Maximum Marginal Rate

Judgement Text

M.A. NO.78/LKW/2016 ASSESSMENT YEAR:2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER MISC. APPLICATION NO.78/LKW/2016 (ARISING OUT OF I.T.A. NO.936/LKW/2014) ASSESSMENT YEAR:2006-07 M/S R. K. SOMAN I FAMILY TRUST, 63/2, CITY CENTRE, 4 TH FLOOR, THE MALL, KANPUR. PAN:AAAA 1246 G VS. D.C.I.T. - 1, KANPUR. (APPLICANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS MISC. APPLICATION HAS BEEN FILED BY THE ASSES SEE AGAINST THE ORDER OF THE TRIBUNAL DATED 15/03/2016 PASSED IN I. T.A. NO.936/LKW/2014. 2. AT THE OUTSET, LEARNED A. R. SUBMITTED THAT THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING INCOME FROM TRADING IN S HARES AS INCOME FROM OTHER SOURCES WHICH THE ASSESSING OFFICER HAD ASSES SED AS INCOME FROM BUSINESS AND LEARNED CIT(A) HAD ALSO UPHELD THE ASS ESSMENT ORDER AND THEREFORE, THE ASSESSEE HAD FILED APPEAL BEFORE THE HON'BLE TRIBUNAL AND HON'BLE TRIBUNAL HAD HELD THAT THE INCOME WAS NOT A SSESSABLE IN THE HANDS OF THE ASSESSEE AND WAS ASSESSABLE IN THE HANDS OF THE BENEFICIARIES AS THE SHARES OF THE BENEFICIARIES WERE DETERMINATIVE. IT WAS SUBMITTED THAT WHILE DECIDING THE APPEAL OF THE ASSESSEE THE HON'BLE TRI BUNAL HAD RELIED ON THE APPLICANT BY SHRI R. R. JAIN, F.C.A. RESPONDENT BY SHRI RAJIV MOHAN, D. R. DATE OF HEARING 09/03/2018 DATE OF PRONOUNCEMENT 12 / 03 /201 8 M.A. NO.78/LKW/2016 ASSESSMENT YEAR:2006-07 2 CASE LAW OF SRI LAKSHMI TRUST VS. CIT WHICH WAS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. LEARNED A. R. FURTH ER SUBMITTED THAT THE FINDINGS OF THE HON'BLE TRIBUNAL THAT THE SHARES OF THE BENEFICIARIES WERE DETERMINATIVE IS NOT CORRECT IN VIEW OF THE FACT TH AT THE SHARES WERE MENTIONED IN THE TRUST DEED AND WHICH WAS TO BECOME OPERATIONAL ONLY IN CASE OF WINDING UP OF THE TRUST. THEREFORE, IT WAS ARGUED THAT THERE HAD OCCURRED A MISTAKE IN THE ORDER OF THE TRIBUNAL AS IT HAS NOT DECIDED THE ISSUE REGARDING TAXABILITY OF INCOME AS INCOME FROM OTHER SOURCES INSTEAD OF BUSINESS INCOME IN THE HANDS OF THE ASSESSEE ITS ELF. 3. LEARNED D. R., ON THE OTHER HAND, HEAVILY SUPPOR TED THE ORDER OF THE TRIBUNAL AND SUBMITTED THAT THERE IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL WHICH IS RECTIFIABLE U/S 254(2) OF THE ACT. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSEE FILED ITS RETURN OF INCOME AS AOP AND UNDER THE HEAD INCOME FROM OTHER SOURCES AL SO DECLARED PROFIT ON SHARE DEALING. THE ASSESSING OFFICER HELD THAT SUC H INCOME HAS TO BE ASSESSED AS BUSINESS INCOME AND THEREFORE, CHARGED THE TAX AT THE MAXIMUM MARGINAL RATE. ON APPEAL LEARNED CIT(A) AL SO UPHELD THE ACTION OF THE ASSESSING OFFICER AS HE HELD THAT PROFIT FRO M SHARE DEALING CANNOT BE TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES. BE FORE THE TRIBUNAL THE ASSESSEE RAISED THREE EFFECTIVE GROUNDS. GROUND NO. 1 REGARDING CHALLENGING THE REOPENING WAS NOT PRESSED. GROUND NO. 2 RELATED TO THE ACTION OF LEARNED CIT(A) BY WHICH HE HAS UPHELD THE APPLICABILITY OF SECTION 164(1) READ WITH SECTION 161(1) AND GROUND NO. 3 RE LATED TO THE EFFECT THAT DURING ASSESSMENT YEAR 2008-09 AND 2011-12, UNDER S IMILAR CIRCUMSTANCES, THE DEPARTMENT HAD ACCEPTED THE SIMILAR ISSUE IN FA VOUR OF THE ASSESSEE. HON'BLE TRIBUNAL IN ITS ORDER HAS DISMISSED GROUND NO. 1 AS NOT PRESSED AND REGARDING APPLICABILITY OF SECTION 164 READ WITH SE CTION 161, DECIDED THE M.A. NO.78/LKW/2016 ASSESSMENT YEAR:2006-07 3 ISSUE IN FAVOUR OF THE ASSESSEE AND DIRECTED THE AS SESSING OFFICER TO ASSESS THE INCOME IN THE HANDS OF THE BENEFICIARIES. NOW LEARNED A. R. HAS ARGUED THAT INCOME SHOULD HAVE BEEN ASSESSED IN THE HANDS OF THE TRUST ITSELF BUT UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF INCOME FROM BUSINESS WHEREAS IN THE GROUND OF APPEAL BEFORE THE TRIBUNAL THIS ISSUE WAS NEVER RAISED AND THEREFORE, WE DO NOT SEE ANY M ISTAKE IN THE ORDER OF THE TRIBUNAL. THEREFORE, THIS MISC. APPLICATION OF THE ASSESSEE IS DISMISSED. 5. IN THE RESULT, THE MISC. APPLICATION OF THE ASSE SSEE IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 12/03/2018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:12/03/2018 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR