Soma Textiles & Industries Ltd.,, v. The Addl.CIT, Circle-8,,

ITA 1115/AHD/2007 | 1993-1994
Pronouncement Date: 30-09-2011 | Result: Dismissed

Appeal Details

RSA Number 111520514 RSA 2007
Assessee PAN AADCS0405R
Bench Ahmedabad
Appeal Number ITA 1115/AHD/2007
Duration Of Justice 4 year(s) 6 month(s) 15 day(s)
Appellant Soma Textiles & Industries Ltd.,,
Respondent The Addl.CIT, Circle-8,,
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 30-09-2011
Date Of Final Hearing 28-09-2011
Next Hearing Date 28-09-2011
Assessment Year 1993-1994
Appeal Filed On 15-03-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI G. D. AGARWAL VP AND SHRI BHAVNESH SA INI JM) ITA NO.1115/AHD/2007 A. Y.: 1993-94 SOMA TEXTILES & INDUSTRIES LTD. RAKHIAL ROAD AHMEDABAD 380 001 VS THE ADDL. C. I. T. RANGE-8 AJANTA COMMERCIAL BUILDING ASHRAM ROAD AHMEDABAD PA NO. AADCS 0405 R (APPELLANT) (RESPONDENT) ITA NO.210/AHD/2009 A.Y.: 1993-94 THE A. C. I. T. (OSD) CIR-8 4 TH FLOOR AJANTA COMMERCIAL CENTRES A WING ASHRAM ROAD AHMEDABAD VS SOMA TEXTILES & INDUSTRIES LTD. RAKHIAL ROAD AHMEDABAD 380 001 PA NO. AADCS 0405 R (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI PAUMIL SHAH AR DEPARTMENT BY SHRI VINOD TANWANI SR. DR DATE OF HEARING: 28-09-2011 DATE OF PRONOUNCEMENT: 30-09-2011 O R D E R PER BHAVNESH SAINI: THE APPEAL IN ITA NO.1115/AHD/2007 BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF TH E LEARNED CIT(A)- XIV AHMEDABAD DATED 05-01-2007 FOR THE ASSESSMENT YEAR 1993- 94 ON THE FOLLOWING GROUNDS: ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 2 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN CONFIRMING THE ACTION OF THE A. O. DISALLOWING THE CLAIM FOR SET-OFF OF CARRIED FORWARD SHORT TERM CAP ITAL LOSS OF RS.20 30 000/- FOR A. Y. 1992-93 AGAINST SHORT TERM CAPITAL GAIN OF RS.20 25 000/- FOR THE Y EAR UNDER CONSIDERATION I.E. A. Y. 1993-94 WITHOUT PROPER APPRECIATION AND UNDERSTANDING OF THE FACTS OF THE CASE. IN VIEW OF THE FACTS DETAILS SUBMISSIONS AND EVIDENCES FILED THE APPELLANTS CLAIM FOR SET-OFF OF THE SAID LOSS OF RS.20 30 000/ - REQUIRES TO BE ALLOWED. 2. THE LEARNED CIT(A) FURTHER FAILED TO APPRECIATE AND CONSIDER THE FACT THAT SINCE THE LOSS ON SALE OF UN ITS OF UTI HAVE BEEN CONSIDERED BY THE DEPARTMENT AS SPECULATIVE IN NATURE IN A. Y. 1991-92 THE LOSS ARISING ON SALE OF UNITS OF UTI IN A. Y. 1991-92 REQUIRES TO BE ADJUSTED AGAINST SIMILAR GAIN ON SAL E OF UNITS OF ITI IN THE YEAR UNDER CONSIDERATION I.E . A. Y. 1993-94. 2. THE APPEAL IN ITA NO.210/AHD/2009 IS FILED BY TH E REVENUE DEPARTMENT AGAINST THE ORDER OF THE LEARNED CIT(A)- XIV AHMEDABAD DATED 14-11-2008 FOR ASSESSMENT YEAR 1993-94 CHALLE NGING THE IMPUGNED ORDER IN CANCELING THE PENALTY U/S 271 (1) (C ) OF THE IT ACT. 3. THE DETAILED FACTS OF THE CASE ARE NOTED I N THE PENALTY ORDER OF THE LEARNED CIT(A) DATED 14-11-2008. THE SAME ARE T HAT THE AO LEVIED PENALTY OF RS.15 13 190/- U/S. 271(L) (C) OF THE ACT ON THE GROUND THAT THE SET OFF OF SHORT TERM CAPITAL LOSS OF EARLIER YEARS I.E. OF ASSESSMENT YEAR 1991-92 AND 1992-93 WITH THE SHORT TERM CAPITAL GAIN OF RS.20 25 000/- OF THE CURRENT YEAR WAS NOT GIVEN. THE LEARNED CIT(A) HAD CONFIRMED THE ACTION OF THE AO IN NOT GI VING THIS SET OFF BY ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 3 OBSERVING THAT WHILE DECIDING THE APPEAL FOR THIS Y EAR THE FINDING OF EARLIER YEARS IN ASSESSMENT ORDERS CAN NOT BE DISTU RBED AND THAT THE FINDINGS OF THE AO GIVEN FOR ASSESSMENT YEAR 1991-9 2 AND 1992-93 CAN BE DECIDED IN APPEALS IN THOSE YEARS ONLY BUT IN THOSE YEARS THE FINDINGS OF AO HAVE BEEN CONFIRMED BY THE ITAT. THE REFORE ACCORDING TO THE LEARNED CIT (A) IT IS BEYOND THE S COPE OF APPELLATE PROCEEDINGS IN THIS YEAR TO CHANGE THE FINDING AND NATURE OF INCOME DECIDED IN EARLIER YEARS. HE ACCORDINGLY HELD THAT IT IS A FACT THAT IN THIS YEAR THE ASSESSEE HAS SHOWN SHORT TERM CAPITA L GAIN WHICH HAS BEEN DULY ACCEPTED BY THE AO AND NO GRIEVANCE EXIST S FOR THIS YEAR ALSO REGARDING CARRY FORWARD OF SHORT TERM CAPITAL LOSS OF EARLIER YEARS THAT HAS BEEN DECIDED AGAINST THE ASSESSEE AND THAT CANNOT BE DECIDED IN THE PRESENT APPELLATE PROCEEDINGS. HENCE THE LEARNED CIT(A) WAS OF THE OPINION THAT THE AO WAS JUSTIFIED IN NOT GIVING THE BENEFIT OF SET OFF WITH REGARD TO THE LOSS OF EARLI ER YEARS. DURING THE YEAR THE ASSESSEE HAD SHOWN SHORT TERM CAPITAL GAI N OF RS.20 25 000/- AND CLAIMED THE BENEFIT OF SET OFF S HORT TERM CAPITAL LOSS OF RS.18 30 000/- AND RS.20 30 000/- FOR ASSES SMENT YEAR 1991- 92 AND 1992-93 RESPECTIVELY. THE AO THEREFORE OBS ERVED THAT THE ASSESSEE WAS FOUND TO HAVE FURNISHED INACCURATE PAR TICULARS OF ITS INCOME TO THE EXTENT OF RS.20 25 000/- AS IT DID NO T HAVE CARRIED FORWARD SHORT TERM CAPITAL LOSS OF EARLIER YEARS BE SET OFF AGAINST THE SHORT TERM CAPITAL GAIN DURING THE YEAR UNDER CONSI DERATION. IN RESPONSE TO SHOW CAUSE NOTICE FOR LEVY OF PENALTY I SSUED BY THE AO IT WAS EXPLAINED BY THE ASSESSEE THAT THIS WAS NOT A C ASE OF FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME BUT ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 4 MERELY A DIFFERENCE OF OPINION BETWEEN THE DEPARTME NT AND THE ASSESSEE AND AN ADDITION MADE ON ACCOUNT OF SUCH DI FFERENCE CERTAINLY COULD NOT BRING THE ASSESSEE'S CASE WITHI N THE SCOPE AND AMBIT OF THE PROVISIONS OF SEC. 271(1) (C) OF THE A CT. FURTHER THERE WAS NO REVENUE EFFECT ON ACCOUNT OF STAND TAKEN BY THE DEPARTMENT IN THE ASSESSMENT ORDER WHICH WAS CONFIRMED BY THE LEARNED CIT (A) AS THE DEMAND WAS NIL EVEN AFTER THE SAID ORDE R AND IT COULD NOT BE SAID THAT THERE WAS ANY CONCEALMENT OR FURNISHIN G OF INACCURATE PARTICULARS OF INCOME IN VIEW OF THE FACT THAT NO TAX WAS PAYABLE AND ACCORDINGLY NO TAX WAS SOUGHT TO BE EVADED. THE AO AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE HELD T HAT THE ISSUE WAS DISCUSSED BY THE LEARNED CIT(A) AND THE ASSESSEE HA D FURNISHED INACCURATE PARTICULARS OF ITS INCOME IN RESPECT OF SHORT TERM CAPITAL GAIN OF RS.20 25 000/- AND THEREBY COMMITTED A DEFA ULT PUNISHABLE UNDER SECTION 271(L) (C) OF THE IT ACT AND ACCORDIN GLY LEVIED PENALTY U/S 271(L) (C) OF THE IT ACT. IT WAS SUBMITTED BEFO RE THE LEARNED CIT(A) THAT THE ASSESSEE PREFERRED AN APPEAL AGAINST THE O RDER OF LEARNED CIT (A) AND THE SAID QUANTUM APPEAL IN RESPECT OF A DDITIONS ON WHICH PENALTY HAS BEEN IMPOSED IS PENDING FOR DISPOSAL BE FORE THE ITAT. IT WAS FURTHER SUBMITTED BY THE LEARNED COUNSEL FOR TH E ASSESSEE THAT THE ONLY ISSUE UNDER DISPUTE WAS THAT THE AO DISALL OWED THE CLAIM FOR SET OFF OF CARRIED FORWARD SHORT TERM CAPITAL LOSS OF RS.20 30 000/- FOR ASSESSMENT YEAR 1992-93 AGAINST SHORT TERM CAPITAL GAIN OF RS.20 25 000/- FOR THE YEAR UNDER CONSIDERATION AND SHORT TERM LOSS AS WELL AS GAIN BEING OF IDENTICAL NATURE I. E. ON SALE OF UNITS OF UTI AND THE SAME HAVING BEEN CONSIDERED BY THE DEPARTME NT AS ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 5 SPECULATIVE NATURE THE LOSS SHOULD HAVE BEEN ADJUD ICATE AGAINST SIMILAR GAIN IN THE SUBSEQUENT YEAR. FURTHER THE A SSESSEE COMPANY HAD FURNISHED COMPLETE DETAILS AND EVIDENCES IN SUP PORT OF CLAIM FOR SET OFF OF CARRIED FORWARD SHORT TERM CAPITAL LOSS OF RS.20 30 000/- FOR ASSESSMENT YEAR 1992-93 AGAINST SIMILAR SHORT TERM CAPITAL GAIN OF RS.20 25 000/- AND IT WAS NOT A CASE OF FURNISHING OF EITHER INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME BUT MERELY A DIFFERENCE OF OPINION BETWEEN THE DEPARTMENT AND TH E ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT AN ADDITION MADE ON ACCOUNT OF SUCH DIFFERENCE OF OPINION CERTA INLY COULD NOT BRING THE CASE OF THE ASSESSEE WITHIN THE SCOPE AND AMBIT OF PROVISIONS OF SECTION 271(1) ( C ) OF THE IT ACT. T HE LEARNED COUNSEL FOR THE ASSESSEE ALSO FURNISHED THE FACTS AND CIRCU MSTANCES UNDER WHICH IT CLAIMED THE SET OFF OF THIS SHORT TERM CAP ITAL LOSS. THE ASSESSEE THEREFORE SUBMITTED THAT SINCE THE LOSS OF RS.18 30 000/- FOR ASSESSMENT YEAR 1991-92 AND RS.20 30 000/- FOR ASSESSMENT YEAR 1992-93 WHICH HAVE ARISEN ON ACCOUNT OF SALE O F UNITS OF UTI HAVE BEEN TREATED BY THE AO AS SPECULATION LOSS BY THE DEPARTMENT GAIN OF RS.20 25 000/- IN ASSESSMENT 1993-94 ON SIM ILAR TRANSACTION I. E. SALE OF UNITS OF UTI BECOMES SPECULATION PROF IT IN THE EYES OF THE DEPARTMENT. ACCORDINGLY THE SPECULATION LOSS OF RS .18 30 000/- AND RS.20 30 000/- IS REQUIRED TO BE SET OFF AGAINST SI MILAR SPECULATION GAIN OF RS.20 25 000/- FOR ASSESSMENT YEAR 1993-94. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT MER E REJECTION OF PLAUSIBLE EXPLANATION FURNISHED BY THE ASSESSEE DOE S NOT WARRANT PENALTY WHICH VIEW FINDS SUPPORT FROM THE DECISION OF HON'BLE ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 6 RAJASTHAN HIGH COURT IN THE CASE OF SHIV LAL TAK VS CIT (2001) 251 ITR 373 (RAJ). THE ASSESSEE FURTHER PLACED RELIANCE ON THE DECISION OF ITAT AHMEDABAD BENCH IN THE CASE OF GUJARAT CRE DIT CORPORATION LTD. VS ACIT (2008) 113 ITD 133 (AHD). FURTHER REL IANCE HAS BEEN PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ON T HE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS SHADIRAM BALMUKUND (1972) 84 ITR 183 (ALL) AND SEVERAL OTHE R CASE LAWS AND IT WAS CONTENDED THAT THE PENALTY U/S 271(1) (C) OF THE IT ACT IS NOT IMPOSABLE ON THE BASIS OF FINDINGS IN APPEAL. IT WA S ALSO SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT PENALTY I S NOT LEVIABLE WHERE THE ISSUE IS DEBATABLE AND TWO OPINIONS ARE P OSSIBLE AND THE BURDEN WAS ON THE DEPARTMENT TO PROVE THAT THE EXPL ANATION OFFERED BY THE ASSESSEE WAS FALSE AND THEREFORE THE LEARN ED COUNSEL FOR THE ASSESSEE CONTENDED THAT THERE WAS NEITHER A CASE OF CONCEALMENT NOR FURNISHING INACCURATE PARTICULARS OF ITS INCOME . IT WAS ALSO SUBMITTED THAT AS PER ORDER U/S 154 OF THE IT ACT D ATED 27-6-1993 REVISING INTIMATION U/S !43(L) (A) OF THE IT ACT FO R ASSESSMENT YEAR 1991-92 AND FILED AS ANNEXURE-4 TO PAPER BOOK FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE AND ALSO ORDER U/S 154 OF THE IT ACT DATED 27-07-1995 REVISING ASSESSMENT ORDER FOR ASSESSMENT YEAR 1991-92 AND FILED AS ANNEXURE -7 TO PAPER BOOK THE AO HAS ALLOWED CARRY FORWARD OF LOSS OF RS.18 30 OOO/- OF ASSESSMENT YEA R 1992-92 TO BE SET OFF AGAINST SPECULATIVE BUSINESS INCOME THUS T O THE SAID EXTENT THE SET OFF WAS AVAILABLE AND THUS NO PENALTY COULD BE IMPOSED. ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 7 4. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION O F THE ASSESSEE CANCELLED THE PENALTY. HIS FINDINGS IN PAR A 2.3 OF THE IMPUGNED ORDER ARE REPRODUCED AS UNDER: 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE AS WEL L AS THE SUBMISSIONS AS ADVANCED BY THE A.R OF THE APPEL LANT. IT IS SEEN THAT THAT THE A.O. LEVIED THE PENALTY ON THE GROUND THAT THE A.O. DID NOT GIVE THE BENEFIT OF SE T OFF OF SHORT TERM CAPITAL LOSS OF EARLIER YEARS AGAINST TH E SHORT TERM CAPITAL GAIN OF CURRENT YEAR. IT IS ALSO SEEN THAT BOTH THE BENEFIT OF SET OFF HAS BEEN DENIED BY REJECTING THE EXPLANATION OFFERED BY THE APPELLANT AND IT IS NOT THE CASE THAT THERE WAS ANY CONSCIOUS/DELIBERATE ATTEMPT TO CONCEAL ANY INCOME ON THE PART OF THE APPELLANT. I FIND FORCE IN THE CONTENTION OF A.R. THAT THAT BY REJECT ION OF APPELLANTS CLAIM BY RELYING ON DIFFERENT INTERPRET ATION IT COULD NOT BE SAID THAT PARTICULARS OF INCOME HAD BE EN CONCEALED. THE DECISION OF DELHI HIGH COURT IN CIT VS. EICHER GOODEARTH LTD. REPORTED IN 170 TAXMAN 27 (D EL) WHEREIN IT WAS HELD THAT THERE IS NO JUSTIFICATION TO LEVY PENALTY WHEN THE AO HAD NOT FOUND PARTICULARS FURNI SHED BY THE ASSESSEE TO BE FALSE AND HAD ALSO NOT UNEART HED ANY MATERIAL FACTS OR PARTICULARS WHICH ASSESSEE HA D NOT DISCLOSED IS SQUARELY APPLICABLE TO THE FACTS OF TH E CASE OF THE APPELLANT AS THE PARTICULARS FURNISHED BY THE APPELLANT HAVE NOT BEEN FOUND TO BE FALSE BY THE A.O. FURTHER I AM OF THE VIEW THAT DENYING THE BENEFIT OF SET OFF SHO RT TERM CAPITAL LOSS WAS MERELY BASED ON DIFFERENCE OF OPIN ION AND NO MENS REA WAS ESTABLISHED ON THE PART OF THE APPELLANT THAT THERE WAS DELIBERATE ATTEMPT MADE TO EITHER CONCEAL INCOME OR FURNISH INACCURATE PARTICULARS OF INCOME AS THE APPELLANT HAD FURNISHED FULL DETAILS BEFORE THE A.O. WHICH WERE NECESSARY FOR FINALIZATION OF ASSESSMENT. WHEN THE APPEALS FILED AGAINST THE ORDE R OF CIT (APPEALS) AS WELL AS APPEAL AGAINST QUANTUM APP EAL ARE STILL PENDING FOR DISPOSAL BEFORE THE HON'BLE I TAT THE ISSUE ITSELF BECOMES HIGHLY DEBATABLE. FURTHER RELYING ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 8 ON CASE LAWS CITED BY THE A.R. I AM OF THE VIEW THAT MERE CONFIRMATION OF ADDITIONS AT THE FIRST APPELLATE ST AGE WOULD NOT ITSELF AMOUNT TO CONCEALMENT OF INCOME WHICH ULTIMATELY ATTRACTS THE PROVISIONS OF SEC. 271(1) ( C ) OF THE IT. ACT. I HAVE ALSO GONE THROUGH THE ORDER U/S.154 DATED 27-05-1993 AND ORDER U/S. 154 OF THE IT. ACT DATED 27-07-1995 FOR A.Y. 1991-92 WHEREIN THE A.O. HAS ALLOWED LOSS OF AN AMOUNT OF RS.18 30 000/- TO BE C ARRIED FORWARD FOR THE PURPOSE OF SETOFF AGAINST SPECULATI VE PROFIT. THE A.R HAS CONTENDED THAT THE NATURE OF TRANSACTIONS FOR AY. 1991-92 AND A.Y. 1993-94 ARE SIMILAR SO IF THE LOSS FOR A.Y. 1991-92 IS HELD AS SPECULATIVE LOSS THEN GAIN FOR AY. 1993-94 SHOULD ALSO BE HELD AS SPECULATIVE PROFIT AND LOSS OF AY. 1991- 92 SHOULD BE SET OFF AGAINST THE GAIN OF A.Y. 1993-94. THIS CONTENTION OF THE AR. SEEMS PLAUSIBLE AS IT IS SEEN FROM THE ASSESSMENT ORDER U/S. 143(3) R. W. S. 254 FOR A .Y. 1993-94 DATED 31-03-2006 AT PAGE 4 WHEREIN THE A.O. OBSERVED THAT THE ASSESSEE HAS FOLLOWED THE SAME PATTERN OF PURCHASING SHARES-CUM-DIVIDEND AND SELLI NG THE SAME IMMEDIATELY AFTER THE .ANNOUNCEMENT OF DIVIDEN D AT EX-DIVIDEND RATES AND HAS SUFFERED LOSS. CONSIDERIN G THE ABOVE FACTS OF THE CASE AND THE DETAILED SUBMISSION ALONG WITH VARIOUS JUDGMENTS AS RELIED UPON BY THE A.R I HOLD THAT THERE IS NO MALAFIDE INTENTION ON THE PART OF THE APPELLANT IN CLAIMING THE BENEFIT OF SET OFF OF SHO RT TERM CAPITAL LOSS AGAINST THE SHORT TERM CAPITAL GAIN OF CURRENT YEAR HENCE PENALTY FOR CONCEALMENT CANNOT BE LEVIE D IN THE CASE OF THE APPELLANT. I THEREFORE DIRECT THE AO. TO DELETE THE PENALTY LEVIED IN THIS CASE TO THE TUNE OF RS.15 13 I5O/- ON SUCH DISALLOWANCE OF SET OFF OF RS.20 25 000/-. 3. IN THE RESULT THE APPEAL IS ALLOWED. 5. SIMILARLY IN THE APPEAL IN ITA NO.1115/AHD/2007 THE LEARNED CIT(A) NOTED THAT THE RETURN OF INCOME WAS FILED ON 31-12-1993 DECLARING TOTAL INCOME OF RS.2 23 32 260/-. THE ASS ESSMENT WAS ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 9 MADE U/S 143 (3) OF THE IT ACT ON 27-03-1996 DETERM INING TOTAL INCOME AT RS.2 63 86 148/-. THE ASSESSEE WENT IN AP PEAL BEFORE THE TRIBUNAL WHO PASSED HT E ORDER IN ITA NO.904/AHD/19 97 DATED 29-04-2004 AND THE TRIBUNAL SET ASIDE THE ISSUE OF CARRY FORWARD AND SET OFF OF SHORT TERM CAPITAL LOSS OF ASSESSMENT YE AR 1991-92 AND 1992-93 AS AGAINST SHORT TERM CAPITAL GAIN IN ASSES SMENT YEAR 1993- 94 TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH . IT IS FURTHER NOTED IN THE IMPUGNED ORDER THAT THE ASSESSEE HAS SHOWN SHOR T TERM CAPITAL GAIN OF RS.20 25 000/- IN THIS ASSESSMENT YEAR WHIC H THE AO HAS ACCEPTED AS SUCH. THE SHORT TERM CAPITAL GAIN WAS I N RESPECT OF SALE OF UNITS OF UTI. THE ASSESSEE CLAIMED THAT THIS CAP ITAL GAIN SHOULD BE GIVEN SET OFF OF CARRY FORWARD SHORT TERM CAPITAL L OSS OF RS.20 30 000/- FOR ASSESSMENT YEAR 1991-92 AND 1992-93. THE AO HAS DISCUSSED THE FACTS IN DETAIL IN THE ASSESSMENT ORDER AND THE OUTCOME OF THE APPELLATE ORDER FOR ASSESSMENT YEAR 1991-92 AND 199 2-93 AND PASSED THE ASSESSMENT ORDER ON DATED 31-03-2006 WHI CH WAS SUBJECT MATTER IN APPEAL BEFORE THE LEARNED CIT(A). THE AO HAS DISCUSSED THE ISSUE IN DETAIL AND POINTED THAT IN A SSESSMENT YEAR 1991-92 THE AO DISALLOWED THE LOSS OF RS.18 30 000/ - WHICH HAS BEEN CONFIRMED BY THE TRIBUNAL VIDE ORDER DATED 21- 05-2002. IN ASSESSMENT YEAR 1992-93 THE ASSESSEE CLAIMED SHORT TERM CAPITAL LOSS OF RS.20 30 000/-. IN THAT YEAR DIVIDEND WAS ASSESSED ON PROTECTIVE BASIS IN THE CASE OF THE ASSESSEE AND ON SUBSTANTIVE BASIS ON M/S. PEERLESS GENERAL FINANCE & INVESTMENT CO. CALCUTTA. THE LEARNED CIT(A) HAS HELD THAT THE ASSESSMENT OF DIVI DEND INCOME ON PROTECTIVE BASIS WILL BE DECIDED AFTER THE ASSESSME NT ON SUBSTANTIVE ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 10 BASIS IN THE CASE OF M/S. PEERLESS GENERAL FINANCE & INVESTMENT CO. THE LEARNED CIT(A) HAS FURTHER GIVEN RELIEF OF RS.2 0 40 000/- IN RESPECT OF ADDITION MADE U/S 68 OF THE IT ACT WHIC H WAS WITHDRAWN BY THE TRIBUNAL. THERE WAS NO FINDING IN RESPECT OF CARRY FORWARD OF SHORT TERM CAPITAL LOSS AND THIS ISSUE HAS BECOME F INAL AS THE ORDER OF THE AO WAS NOT DISTURBED BY THE LEARNED CIT(A) AND THE TRIBUNAL. THE ASSESSEE HAS HOWEVER CLAIMED BEFORE THE LEARNED CI T(A) THAT THE NATURE OF THE TRANSACTION IS SAME AND THE CARRY FOR WARD SHORT TERM CAPITAL LOSS OF ASSESSMENT YEAR 1991-92 AND 1992-93 SHOULD BE GIVEN SET OFF AGAINST THIS YEARS SHORT TERM CAPIT AL GAIN. THE LEARNED CIT(A) HOWEVER DID NOT ACCEPT THE CONTENTION OF TH E ASSESSEE BECAUSE WHILE DECIDING THE APPEAL FOR THE PRESENT A SSESSMENT YEAR THE FINDING GIVEN IN THE EARLIER ASSESSMENT YEARS C ANNOT BE DISTURBED. THE LEARNED CIT(A) ALSO NOTED THAT THE ORDER OF THE AO FOR ASSESSMENT YEAR 1991-92 AND 1992-93 CAN BE DECIDED IN THE APPEAL IN THOSE YEARS ONLY. SINCE THE FINDING OF THE AO HA VE BEEN CONFIRMED BY THE LEARNED CIT(A) THEREFORE IT WAS BEYOND THE SCOPE OF THE APPELLATE PROCEEDINGS IN THIS ASSESSMENT YEAR TO CH ANGE THE FINDINGS AND NATURE OF INCOME DECIDED IN THE EARLIER YEARS. IT WAS FOUND THAT IT IS A FACT THAT IN THE ASSESSMENT YEAR UNDER APPEAL THE ASSESSEE HAS SHOWN SHORT TERM CAPITAL GAIN WHICH IS DULY ACCEPTE D BY THE AO AND NO GRIEVANCE IS LEFT IN THE ASSESSMENT YEAR UNDER A PPEAL REGARDING CARRY FORWARD OF SHORT TERM CAPITAL LOSS OF EARLIER YEARS THAT HAS BEEN DECIDED AGAINST THE ASSESSEE. THEREFORE ACCORDING TO THE LEARNED CIT(A) THE SAME CANNOT BE DECIDED IN THE IMPUGNED ORDER. THE LEARNED CIT(A) WAS THEREFORE OF THE OPINION THAT THE AO WAS JUSTIFIED ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 11 IN NOT GIVING BENEFIT OF SET OFF WITH REGARD TO LOS S OF THE EARLIER YEARS. APPEAL OF THE ASSESSEE WAS ACCORDINGLY DISMISSED. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS BEFORE THE AUTHORITIES BELOW AND SUBMIT TED THAT IN THE ASSESSMENT YEAR 1991-92 THE SHORT TERM CAPITAL LOS S WAS TREATED AS SPECULATIVE LOSS THEREFORE THE TRANSACTION BEING THE SAME THE CARRY FORWARD OF THE LOSS SHOULD BE GIVEN TO THE ASSESSEE IN THE ASSESSMENT YEAR UNDER APPEAL. ON THE PENALTY MATTE R HE HAS REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED CIT(A) AND SUBMITTED THAT THE CLAIM OF SET OFF OF THE BROUGHT FORWARD LOSSES WAS ON ACCOUNT OF DIFFERENCE OF OPINION THEREFORE IT IS NOT A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME THEREFORE PENALTY WAS RIGHTLY CANCELLED BY THE LEARNED CIT(A). HE HAS FILED PAPER BOOK OF 127 PAGES BUT NO NE OF THE PAGES FROM THE PAPER BOOK HAS BEEN REFERRED TO DURING THE COURSE OF ARGUMENTS. 7. ON THE OTHER HAND THE LEARNED DR SUBMITTED THAT THE ADDITION ON MERIT HAS BEEN RIGHTLY CONFIRMED BY THE LEARNED CIT(A) BECAUSE THE FINDING IN THE EARLIER YEARS CANNOT BE DISTURBE D IN THE ASSESSMENT YEAR UNDER APPEAL. HE HAS SUBMITTED THAT EVEN ACCOR DING TO THE ORDER OF THE AO THE NATURE OF TRANSACTION WAS DIFFERENT; THEREFORE NO SET OFF OF LOSSES CAN BE GIVEN. ON PENALTY THE LEARNED DR SUBMITTED THAT SINCE THE ASSESSEE MADE WRONG CLAIM IN THE RETURN O F INCOME THEREFORE PENALTY SHOULD NOT BE CANCELLED IN THE M ATTER. ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 12 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE FINDINGS OF THE AUTHORITIES BELOW. THE FACTS NOTED IN THE APPELLATE ORDER DATED 05-01-2007 ON QUANTUM HAVE NOT BEEN DIS PUTED BY THE LEARNED COUNSEL FOR THE ASSESSEE. THE AO DISCUSSED THE ISSUE IN DETAIL IN THE SET ASIDE PROCEEDINGS AND THE FINDING S OF ASSESSMENT YEAR 1991-92 HAVE BEEN CONFIRMED. SIMILAR IS THE PO SITION IN ASSESSMENT YEAR 1992-93 IN WHICH THE AO NOTED THAT THE ORDER OF THE LEARNED CIT(A) DID NOT CONTAIN ANY DIRECTION REGARD ING CARRY FORWARD OF CAPITAL LOSS. THEREFORE NO SET OFF COULD BE GIV EN TO THE ASSESSEE. THE FINDINGS OF THE AO HAVE NOT BEEN CHALLENGED BY THE LEARNED COUNSEL FOR THE ASSESSEE THROUGH ANY EVIDENCE OR MA TERIAL. NO INFIRMITY HAS BEEN POINTED OUT IN THE ORDER OF THE AO IN HOLDING SO. THUS IT BECOMES CLEAR THAT THERE WAS NO FINDING IN THE EARLIER YEARS IN RESPECT OF CARRY FORWARD OF SHORT TERM CAPITAL LOSS BECAUSE THE FINDINGS OF THE AO HAVE BECOME FINAL AS WAS NOT DIS TURBED BY THE APPELLATE AUTHORITIES. THE LEARNED COUNSEL FOR THE ASSESSEE ON SECOND GROUND OF APPEAL SUBMITTED THAT SINCE IN ASS ESSMENT YEAR 1991-92 THE TRANSACTIONS WERE CONSIDERED TO BE SPEC ULATIVE IN NATURE THEREFORE IN SUBSEQUENT ASSESSMENT YEAR UNDER APPE AL THE SAME SHOULD BE TREATED AS SPECULATIVE IN NATURE. HOWEVER HE COULD NOT POINT OUT ANY INFIRMITY IN THE ORDERS OF THE AUTHOR ITIES BELOW THAT THERE WAS NO DIRECTION IN THE EARLIER YEARS ASSESSMENT O RDER FOR GIVING ANY SET OFF AGAINST SHORT TERM CAPITAL GAIN CLAIMED IN THE ASSESSMENT YEAR UNDER APPEAL. IN THE PRESENT APPEAL BEFORE THE LEAR NED CIT(A) THE FINDINGS OF EARLIER YEARS CANNOT BE DISTURBED THER EFORE THE LEARNED CIT(A) RIGHTLY NOTED THAT IT WAS BEYOND HIS SCOPE A ND POWER TO ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 13 CHANGE THE FINDINGS OF EARLIER YEARS WHILE DECIDING THE APPEAL FOR THE PRESENT ASSESSMENT YEAR. SINCE THOSE WERE THE SET A SIDE PROCEEDINGS BEFORE THE LEARNED CIT(A) THEREFORE T HE AUTHORITIES BELOW WERE BOUND TO PASS THE ORDER AS PER DIRECTION OF THE TRIBUNAL. THE SCOPE OF THE SAME CANNOT BE WIDENED ON THE CLAI M ON THE BASIS OF EARLIER YEARS FINDINGS. SINCE IN EARLIER YEARS THE ORDERS HAVE BECOME FINAL THEREFORE THE ASSESSEE WOULD NOT BE ENTITLED FOR ANY FURTHER RELIEF. CONSIDERING THE ABOVE DISCUSSIONS WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LE ARNED CIT(A) ON QUANTUM. BOTH THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ACCORDINGLY DISMISSED. 9. IN THE RESULT THE APPEAL IN ITA NO.1115/AHD/200 7 IS DISMISSED. 10. REGARDING THE PENALTY IN THE SAME ASSESSMENT YE AR THE FACTS NOTED ABOVE ARE NOT IN DISPUTE. IT IS A FACT THAT T HE ASSESSEE DISCLOSED ALL THE PARTICULARS OF INCOME BEFORE THE AUTHORITIE S BELOW. THE CLAIM OF SET OFF OF SHORT TERM CAPITAL LOSS WAS MADE ON THE BASIS OF THE EARLIER YEARS FINDINGS GIVEN BY THE AO. THERE WERE SEVERAL ROUNDS OF PROCEEDINGS BETWEEN THE ASSESSEE AND THE REVENUE DE PARTMENT AT DIFFERENT APPELLATE FORUM. ACCORDING TO THE REVENUE THE ASSESSEE WOULD NOT BE ENTITLED FOR SET OFF OF SHORT TERM CAP ITAL LOSS BUT THE ASSESSEE MADE A CLAIM ON THE BASIS OF THE EARLIER Y EARS ORDER. THEREFORE THE ENTIRE FACTS WERE WITHIN THE KNOWLED GE OF THE REVENUE DEPARTMENT. THUS THE ASSESSEE HAS NOT FURNISHED AN Y INACCURATE PARTICULARS AND HAS NOT CONCEALED ANY PARTICULARS O F INCOME FROM THE ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 14 REVENUE DEPARTMENT. THE DISPUTE ARISES ON ACCOUNT O F DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE REVENUE DEPART MENT AND ULTIMATELY IN THE QUANTUM PROCEEDINGS THE LEARNED CIT(A) NOTED IN THE APPELLATE ORDER THAT THERE WAS NIL DEMAND AGAIN ST THE ASSESSEE AND THERE WAS NO REVENUE EFFECT. THE LEARNED CIT(A) ON PROPER APPRECIATION OF FACTS AND MATERIAL ON RECORD RIGHTL Y CONCLUDED THAT IT IS NOT A CASE OF CONCEALMENT OF INCOME OR FILING OF IN ACCURATE PARTICULARS OF INCOME. PENALTY ON SUCH A MATTER WAS THEREFORE RIGHTLY CANCELLED BY THE LEARNED CIT(A). WE THEREFORE DO NOT FIND A NY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) IN CANCELING THE PENAL TY. IN THE RESULT DEPARTMENTAL APPEAL IN ITA NO.210/AHD/2009 HAS NO M ERIT AND IS ACCORDINGLY DISMISSED. 11. NO OTHER POINT IS ARGUED OR PRESSED. 12. IN THE RESULT APPEAL OF THE ASSESSEE AND THE D EPARTMENTAL APPEAL BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- ITA NO. 1115/AHD/2007 SOMA TEXTILES & INDUSTRIES LTD VS ADDL. CIT RANGE- 8 AHMEDABAD ITA NO.210/AHD/2009 THE ACIT (OSD) CIRCLE-8 AHMEDABAD VS SOMA TEXTILE S & INDUSTRIES LTD. 15 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR ITAT AHMEDABAD